EMCC European Monitoring Centre on Change

Norway: Young people and temporary employment in Europe

  • Observatory: EMCC
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  • Published on: 08 December 2013



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In Norway, the share of temporary employees has been relatively stable during the 2000s, with no noticeable changes over the last 4–5 years. The most common types of temporary contracts among young people are as substitute workers and extra helps. Regulations by collective agreements and legislation do not differentiate between permanent and temporary employees, but social security benefits will normally be dependent on previous income over a period of 1-3 years, and thereby benefit employees with stable labour market affiliation.

Questionnaire

1. Importance of temporary employment for young people

1.1. Do the figures shown in the attached tables (on the number of temporary employed as a % of total employees based on Eurostat LFS data) give a reliable indication of the scale of temporary employment among the young in your country and the way that it has changed over recent years? Are there young people employed in temporary jobs who do not show up in the Eurostat figures? Are there national statistics which show a different picture from the Eurostat data? If so, please indicate what they show and give the source of the data.

The data attached give a reliable indication of the scale and changes in the share of temporary employees in Norway during the period 2004 to 2011. There are no other national statistical sources that show another picture of the size of the share of temporary jobs amongst youth. There is no reason to suspect that the statistics to not cover the entire range of young person’s holding a temporary position.

Norway has had a substantial inflow of migrant workers from the East-European EU-member countries. Some of these workers are posted workers while others are employed by a company established in Norway. In addition unregistered work is seen (NO0908039Q; NO0704019I). Among such groups, temporary employment will be common, but these groups will be underrepresented in or not covered by the LFS statistics. Even though young people are present, this group of migrant workers is not dominated by young people under the age of 25 years.

1.2. Is there any evidence that other forms of employment are used as a substitute for temporary contracts, such as bogus self-employment where young people are contracted to provide services to a single work provider in a continuous manner so acting de facto as employees? If so, please give the source of the evidence and indicate the scale of the phenomenon in terms of the number of people concerned.

There is no evidence indicating that other types of employment are used as a substitute for temporary contracts for young people. The rules and regulations related to temporary employment are the same for agency work and temporary work, reducing the possibility for such forms of substitutions. Bogus self-employment is known, but does not play any significant role among young employees.

1.3. Please list (and give summary details, i.e. purpose and duration of the contract) the most common contract types or contractual arrangements under which young people are employed on a temporary basis (such as for traineeships, apprenticeships, probationary periods, replacement of workers on leave or projects of a fixed duration). What is the relative importance of each type of contract or arrangement in terms of the number of young people employed under them?

According to Statistics Norway’s labour force survey (LFS) the most common temporary position in Norwegian working life is to substitute workers while they are on leave, whether maternity leave, on sick leave or while temporary holding another position (leave of absence) (table 1). On-call employment is the second most common type of contract, while contract work is the second most common.

Table 1 Contract type
Temporary employed, by contract type. Per cent. 15-64 years of age.
 

2004

2007

2009

2011

Labour market program

0

0

1

1

Appointment on contract

21

19

18

19

Extra help (On-call employment/Seasonal work etc)

23

24

26

23

Substitute workers

39

39

38

40

Apprenticeship/internship

8

8

7

9

Other

9

7

8

7

Unanswered

0

2

2

1

Total

100

100

100

100

Source: LSF

As there are no published data available concerning the contract type of those aged 15 to 24 years of age, we have made such analysis based on the more recent LFS. Most temporary employed in this age group, more than 55 percent, combine temporary work with attending school or higher level studies.

Compared to the figures for the whole population holding a temporary contract, employment on contract work are less common in the age group 15-24 years. Further, a higher number, around 15 percent is in some kind of apprenticeship/internship. Finally, those in this age group have temporary contracts related to on-call employment or seasonal work to a higher degree than the total group of temporary employed.

Table 2 Contract type
Temporary employed, by contract type. Per cent. 15-24 years of age.
 

2009, 4rd qv

2012, 4rd qv

Labour market program

2

3

Appointment on contract

10

6

Extra help (On-call employment/Seasonal work etc)

38

32

Substitute workers

25

38

Apprenticeship/internship

18

13

Other

7

7

Unanswered

0

1

Total

100

100

Source: Labour Force Surveys, figures provided by Fafo

There are no data available on the average duration of temporary contracts in Norway. Studies suggest that contracts often are of limited duration, but that the period as temporary employed often are longer due to several contracts.

1.4. Please indicate the main reasons for the emergence and development of the different types of temporary contract which you have listed in response to question 1.3. To what extent are they linked to particular conditions in the labour market or employment protection legislation/regulation in your country? What is the main attraction of such contracts to employers? What effect has the crisis had on the use of such contracts?

The most common type of temporary contract in Norway is as replacements for employees on leave (parental leave, sick leave etc.). Temporary contracts are also used in situations where the employer needs extra manpower on non-permanent basis, for instance connected to high-season etc. The different types of contracts listed in table 1 reflect “common use” of terms, not terms used by the legislation.

Both “extra helps” and “substitute workers” may fill in for employees on leave. However, extra helps will often be on-call workers, also filling in in situations where the employers need extra manpower (week-ends, afternoons, high season, and short-term sick leave).

Among young people, part-time jobs as “extra helps” are common, meeting a demand from the labour market and at the same time enabling them to combine studies and work. Such jobs are common in retail, hotels and restaurants and the health and social services sector.

Substitute workers are the most common type of temporary employment, and the legislation opens up for using temporary employment in such situations. Substitute workers (“vikar”) will normally be filling in for employees on leave, for instance parental leave or time-limited leave in order to take up another job (i.e. longer vacancies and often full-time jobs). Young people who have been finishing their training/education – but with limited work experience - will often be offered such positions. Such jobs may be seen as an informal trial period, as the substitute workers might be offered a permanent job if the person they are filling in for does not return or if the employer finds another vacancy. However, it is not allowed to use temporary employment (only) as a trial period.

“Appointment on contract” (for instance on a specific project) is less common among young people. This type of appointment (prosjekt/engasjement) is rather strictly regulated, and in principle only allowed when the type of work is different from what is normally done in the enterprise (i.e. it is obvious that the employer will not require the employee after the work/project period is finished). Such jobs will normally be requiring some type of special competence, and therefore less relevant for young people.

Apprenticeships are an integrated part of the vocational training system, and are not regarded as temporary employment contracts as such. The system of apprenticeships is seen as a positive feature of the labour market.

The employer are looking for temporary workers in order to deal with seasonal shifts in labour demand, as well as sick leave, parental leave and inconvenient working hours (week-ends or evenings, when fewer permanent employees are on work). The comparatively generous parental leaves arrangement in Norway, providing the possibility of 57 weeks of leave with 80 percent wage after child birth, increase the demand for temporary workers during such leaves. As the health and social services, as well as parts of the educational and service sector, is female dominated, maternity leave may explain the high level of temporary contract in those sectors.

In the state, the regulation of temporary contracts is laxer (see 3.1). This does also contribute to the use of temporary employment contracts.

The unemployment rate is low in Norway, and has been for some years, and there have not been any changes in the use of temporary contracts among young people since 2008/2009 (i.e. due to the crisis).

1.5. To what extent are temporary contracts a ‘stepping stone’ to ‘permanent’ jobs (or those with standard contracts of employment of undefined duration)? Are apprentices and trainees typically taken on by the companies or other organisations concerned on standard permanent contracts once they complete their training? Has the situation changed over the crisis period? Please summarise any relevant studies which have been carried out in your country or other evidence at the national level which exists and give the reference to them.

Studies using data from the years prior to the crisis and studying the whole employed population (Nergaard 2004, Skollerud 1997, Rasmussen 2010, Svalund 2013), show that temporary employment to a relatively high degree is a stepping stone into typical, permanent employment contracts in Norway. Skollerud (1997), studying temporary employees transitions into permanent contracts in Norway during an economic downturn (1989-1993) shows that more than half of those temporary employed in 1989 had a permanent contract four years later. Nergaard (2004), studying Norway during 1996-2002, found that a majority of temporary employees who stayed employed ended up in a permanent contract during a two year period. Further, an analysis of the labour force survey panel in the years 2000-2007 show that of those holding a temporary contract at time t, 50 percent had moved into a permanent contract one year later (t+1), while 28 percent were still temporary employed (Rasmussen 2010). There are no indications that suggest that the situation has changed after the crisis. The employment levels are still high, as are labour demand. The analyses by Rasmussen (2013) did not find any age differences in mobility rates from temporary to permanent jobs, when controlled for other factors.

There are two types of apprentices connected to both companies/organizations and the school/educational system in Norway; apprentices and practice candidates. The practice candidates are adults with enough practice in the profession/occupation to take the apprenticeship exams without apprentice time within the company.

Of the 14 044 apprentices in the school year 2009/2010, 77 percent were employed in the following fall. In comparison, most of the 6 676 practice candidates did already have a job when performing their practice exams, thus 93 percent had a job the following fall (Utdanningdirektoratet 2012: 83). While these figures indicate the employment level, they do not show whether the apprentices or practice candidates have been employed in the firm where they were apprentices or practice candidates. Such data does not exist, but usually a high share does get employment in the company they work in during their apprenticeship.

Unfortunately, there exists no data about the employment level of apprentices and practice candidates prior to the crisis of mid- 2008, but there are no indications suggesting that fewer apprentices are transferring to employment after the crisis. On the other hand, the number of new apprentices’ seem to have been somewhat influenced by the crisis, as the number of new apprentices fell during 2009 and 2010.

2. Access to social benefits

2.1. Does entitlement of young people to (contributory) unemployment insurance benefits and (non-contributory) unemployment assistance (i.e. benefits, usually means-tested, which provide a minimum level of income) differ if they are employed on temporary contracts as opposed to permanent ones? If so, please indicate briefly the differences in eligibility conditions and any differences between types of temporary contract (including those working as self-employed for a single employer). Have there been any changes over the period of the crisis?

Contribution to the unemployment benefit system is mandatory in Norway, and is part of the National Social Insurance Scheme. Unemployed persons get unemployment benefits as a replacement for loss of work income. However, young people on temporary contracts, especially short-term contracts or part-time work, will often not fill the income requirements or end up with rather low compensation since unemployment benefits are related to income over the last 1-3 years.

There are special regulations for self-employed persons, but these are not related to whether the self-employed person is working for one employer or not.

There have not been any changes to these systems during the crisis period.

2.2. Does entitlement of young people to sickness benefits and maternity benefits differ if they are employed on temporary contracts as opposed to permanent ones? If so, please indicate briefly the differences in eligibility conditions and any differences between types of temporary contract (including those working as self-employed for a single employer). Have there been any changes over the period of the crisis?

Contribution to and compensation from the sick benefit system and maternity leave system are mandatory in Norway, and not based on type of contract.

Sickness benefits (100 % of your wages) are paid if the employee has been employed by the employer for 4 weeks or more. Sick pay is normally based on working hours in the contract. The implication is that some types of temporary employees (especially extra helps/on-call contracts) may face problems since this group is overrepresented among those without scheduled working-hours.

Maternity (parental) benefits are paid if the mother has to have been in work (or on unemployment benefits or similar schemes) 6 months over the last 10 months before the birth. Employees who have just entered the labour market - or have worked in small part-time jobs - may not be eligible for paid parental leave.

There are special regulations for self-employed persons, but these are not related to whether the self-employed person is working for one employer or not.

There have not been any changes to these systems during the crisis period.

2.3. Are there any differences in the entitlement of young people to old-age pensions between those employed in temporary jobs as opposed to permanent ones? If so, please indicate what these are. Have conditions of eligibility to pensions changed over the period of the crisis (including through pension reforms introduced as part of a long-term strategy to improve the financial sustainability of the system)?

There are no differences in the entitlements between those holding a temporary and those holding a permanent contract. However, employer payments to occupational pension schemes are only done if the employment period is 1 year or longer, and payments are not done for small part-time jobs. Temporary employed persons will be overrepresented in jobs that do not qualify for employer contributions to occupational pension schemes since this group often have part-time jobs (students with small part-time jobs) or have short-term contracts.

Over the last ten years or so, a major reform of the pension system has gradually been implemented in Norway. The reform is unrelated to the crises, but the aim of the reform is partly to link pension payments closer to contributions (i.e. making pension more income related) as well as to encourage people to stay longer in work or to combine early retirement and part-time work.

2.4. Are there any differences in entitlement of young people to health care between those employed in temporary jobs as opposed to permanent ones? If so, please indicate what these are. Have conditions of eligibility to health care changed over the period of the crisis?

The rights to health care are unrelated to labour market participation or type of contract.

3. Regulation of temporary contracts and policies to support transitions into permanent contracts

3.1. Please describe briefly the regulations applying to the main types of temporary contract in your country. Do restrictions exist on the maximum duration of the different types of temporary contract for young workers or the number of times they can be renewed? Do these regulations differ by age (i.e. between young people and older workers) and/or by type of temporary contract (as mentioned in question 1.3), by occupation, or by sector of activity? Do special regulations exist for those completing apprenticeships or traineeships? Have the regulations changed over the period of the crisis – i.e. has there been a tendency for them to have been tightened or relaxed?

The Work Environment Act (§14-9) regulate the use of temporary contracts in the labour market, except for those employed by the state. When the state is the employer, the use of temporary contracts is regulated by the Civil Servants Act.

The main rule in the Work Environment Act (§14-9) is that employees are to be given a permanent contract. Still, there are exceptions to this general rule

  1. when warranted by the nature of the work and the work differs from that which is ordinarily performed in the undertaking,
  2. for work as a temporary replacement for another person or persons,
  3. for work as a trainee,
  4. for participants in labour market schemes under the auspices of or in cooperation with the Labour and Welfare Service,
  5. for athletes, trainers, referees and other leaders within organised sports,

The maximum duration of temporary contracts is four consecutive years for the same employer (for a) and b) above). After four consecutive years, the employee is entitled to a permanent position. There are no restrictions on the number of renewals.

The Civil Servants Act – covering state employees - provide the State with more possibilities to use temporary contracts, especially when the civil servant is only needed for a limited period of time or a specific assignment, and during projects, for instance within research in the universities. Further, the Civil Servants Act opens up for temporary contracts when the work tasks are not yet permanently organized, and the need for employees are uncertain.

The regulations do not differ by age, and the regulations have not changed over the period of the crisis.

3.2. Do incentives exists in your country to encourage employers to opt for standard rather than temporary contracts of employment, to convert temporary contracts into permanent ones or to make it easier for employees to move from temporary to permanent contracts? If so, please briefly describe the form that these incentives take. Do they apply equally to young people as well as to older workers? Are any incentives in place to encourage employers to take on young people who have completed an apprenticeship or traineeship on permanent contracts? Have there been any changes to incentives over the period of the crisis? Are any such changes being proposed or being actively discussed at present in your country?

The legislation states that permanent employment is the general rule, and there are few openings for using a temporary contract. Further, the trade unions are usually, with some exceptions, against the use of temporary contracts unless this is a replacement. There are no further incentives for employers to opt for standard rather than temporary contracts, unless rather general statements in some collective agreements.

There are no special incentives in order to encourage employers to take on those who have completed an apprenticeship or traineeships on permanent contracts.

There has not been discussed any changes regarding incentives to encourage employers to opt for standard rather than temporary contracts, and such changes are not being actively discussed.

3.3. Is the employment of young people on temporary contracts an important issue of concern for the social partners? Are there strong differences in attitudes and policies between employers and trade unions towards the use of temporary contracts? Have any initiatives been taken by the social partners, either jointly or separately, to encourage the use of permanent rather than temporary contracts? Have any specific initiatives been taken in respect of young people completing apprenticeships or traineeships over the types of job they are offered when their temporary position comes to an end?

The regulation of temporary employment contracts has been an important issue amongst the social partners, as well as the political parties. This was especially the case around 2005, when a deregulation was discussed and even passed through parliament (but never implemented due to a change of government (NO0506102F; NO0512103N). Regulations on temporary employment are strict in an international context, the ratio of temporary contracts has been stable and in periods decreasing and no deregulation has taken place. This might be the reason that over the last years, the social partners have been more concerned with other types of flexible employment such as temporary agency work and subcontracting (especially involving migrant workers/posted workers), and these type of employment relationships have been higher on the agenda than “traditional” temporary employment (fixed term contracts). Some exceptions exist, for instance have the high ratio of temporary contracts among university employees been put on the agenda by the relevant unions.

However, the social partners disagree on the present regulation of temporary employment. The employer organizations argue in favour of easier access to temporary employment contracts, claiming this will have positive effects on the labour market situations by making it easier to employ people with limited labour market experience, e.g. youth, disabled and immigrants. Most trade unions oppose this view, stating that opening up for more temporary work contracts may lead to a dual labour market with temporary employees who will move between temporary jobs and unemployment.

There have not been made any particular initiative in respect of apprentices finishing their training period.

References

  • Nergaard K. (2004) Atypisk arbeid. Midlertidige ansettelser og deltidsarbeid i Norge [Atypical
  • work. Temporary employment and part time work in Norway]. Oslo: FAFO, Rapport 430.
  • Skollerud K. (1997) Er midlertidig ansatte og deltidsansatte marginalisert på arbeidsmarkedet?
  • [Is temporary employees and part-time workers marginalized on the labour
  • market?]. Søkelys på arbeidsmarkedet 14: 107–111.
  • Rasmussen, Stine. (2010), Transitions into and out of temporary employment. In Berglund T, Aho S, Furåker B, et al. (2010) Labour market mobility in Nordic welfare states. TemaNord. 2010: 515 Copenhagen: Nordic Council of Ministers.
  • Svalund, Jørgen (2013), “Labor Market Institutions, Mobility, and Dualization in the Nordic Countries”. Nordic Journal of working life studies 3 (1): 1-22.
  • Utdanningsdirektoratet (2012), Utdanningsspeilet: tall og analyse av grunnopplæringen i Norge [The educational mirror: Figures and analyses of the basic training in Norway]. Utdanningsdirektoratet. Oslo. http://www.udir.no/Upload/Rapporter/Utdanningsspeilet_2012.pdf?epslanguage=no

Jørgen Svalund, Fafo

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