New rules introduced on private employment services

In December 1999, the Norwegian parliament approved new regulations on private employment agencies and the "leasing" of labour. The new provisions constitute a liberalisation of existing rules on the leasing of labour, while the general ban on private employment agencies is abolished.

The Norwegian parliament (Stortinget) approved in December 1999 new regulations on private employment agencies and the leasing of labour, which liberalise existing rules (NO9904128N). The ban on private employment agencies is abolished, while there are significant alterations to the provisions regulating the "leasing" of labour. The date from which the new provisions will come into force has been left to the government to decide. The governing centrist coalition parties managed to obtain a majority through a compromise solution with the Norwegian Labour Party (Arbeiderpartiet), with minor adjustments to the original proposal.

Ban on private employment agencies abolished

Private employment agencies are not allowed according to existing law in Norway, but this will change once the new provisions come into force. However, enterprises providing such services will not be allowed to charge employees for them. Parliament's decision also indicates that the maintenance of a substantial public labour exchange service will still be important in the future. The main reason for introducing new provisions is that the existing legal system is no longer in tune with the present labour market situation. There has been a growth in new recruitment services and in alternative channels of communication between job-seekers and employers, which fall outside the scope of the present legal framework.

Leasing of labour

The provisions regulating the activities of private temporary work agencies, and other means whereby labour is "leased" from one company to another, have also been amended. There is at present a general ban on the leasing out of labour in Norway, although with a wide range of exemptions (NO9809186F). This ban has now been abolished. However, stricter provisions have been introduced limiting enterprise's opportunities for leasing (ie hiring in) labour. The new regulations draw a distinction between the leasing of staff from professional agencies (eg temporary work agencies) and the leasing of labour from manufacturing enterprises, meaning enterprises whose main purpose is not to hire out labour.

Temporary work agencies

There are currently significant restrictions on the type of work which stand-ins from temporary work agencies may perform, but the new provisions will mean that agencies are free to hire out any category of staff. The new rules stipulate that the hiring in of manpower from temporary work agencies should be allowed to the same degree as it is permissible to use temporary employment generally. The existing regulations concerning temporary employment are relatively strict, and were indeed further tightened in 1996. Temporary employment is regulated by the Act relating to Workers' Protection and Working Environment (AWPWE), which permits temporary employment in the event of an apparent need for stand-ins (eg owing to absence in relation to holidays/leave/illness etc), and in the case of seasonal cycles and unpredictable, short-term stoppages in labour activity. The new regulations also allow the social partners to agree on extended utilisation of leased labour. Local trade unions and employers bound by local collective agreements may enter into agreements on the use of leased labour beyond those cases stipulated in the AWPWE.

Manufacturing enterprises

The leasing of labour from enterprises not established for the purpose of hiring out workers is subject to a different type of regulation. It has not been regarded as appropriate to include this type of leased labour under the provisions on temporary employment. Instead, the new provisions require that employees being leased out must be in a permanent employment relationship with the employer from which they are being leased. Furthermore, the leasing of labour from such enterprises can take place only after prior consultations between management and employee representatives. There are also restrictions set on the percentage of leased labour allowed in the total workforce of an enterprise. A collective agreement is required if leased labour is to make up more than 10% of the workforce over a period of one year. Exemptions to this rule are made in cases were leased labour involves fewer than three employees, with the implication that the requirement of a collective agreement is not applicable to small companies.

New responsibilities for public labour exchange

The new proposal will allow the Directorate of Labour (Arbeidsmarkedsetaten), which is a public service, to introduce fee-based employment services, and to create a state-owned temporary work agency. It is still not clear how such a company is to be organised and for which type of services the Directorate may introduce charges.

The parliamentary process

The new regulations concerning private employment services and the leasing of labour very much follow the main principles of the public committee report submitted in autumn 1998 (NO9809186F). Some minor alterations to the government's original proposal were made, however, in order to get it through parliament. The 10%/one year requirement with regard to the number of employees leased from manufacturing companies allowed in an enterprise without a collective agreement being necessary, was the result of a compromise between the three government parties and the Labour Party. The government's original proposal was 15% and two years. The government also wanted to see a general ban on the leasing of healthcare personnel, but did not manage to muster a majority in favour of this proposal. However, the government was given the authority to exempt certain groups by decree, and may therefore also exempt healthcare staff.

Commentary

The parliamentary debate, and indeed the committee's work, seems to indicate that there is a general consensus about the main principles of change to the present legal framework. This may be explained partly by a wish for more flexibility in working life, and partly because the present legal framework is difficult to interpret. There has also been a significant growth in the activities and number of temporary work agencies. Today the government estimates that approximately 1% of the total labour force is made up of leased labour of some kind. There is also growth in new channels of labour market mediation that do not fall within the scope of the existing legal framework.

There has been some opposition to the legal alterations, especially from the employee side. Several trade unions have opposed changes to the provisions concerning the leasing of labour between manufacturing enterprises. This form of hiring labour has mainly been utilised in some parts of manufacturing industry, the oil sector and the building sector. Trade unions for healthcare personnel, especially nurses, have also wanted to see their sector exempted from the general rule that temporary agencies may hire out any type of staff. Furthermore, it has been claimed that the bodies overseeing the regulatory framework are not sufficiently fulfilling their purpose, and that trade unions must possess the right to take legal action in cases where the rules concerning leased labour are broken. The Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO) is disappointed with the government's decision to cooperate with the Labour Party in order to obtain a parliamentary majority in favour of the legal changes. (Kristine Nergaard, FAFO Institute for Applied Social Science)