Minister proposes lifting the ban on private employment agencies

In January 1998, the Norwegian Minister of Labour and Government Administration, Eldbjørg Løwer, called for the lifting of the country's ban on private employment agencies. This followed a similar proposal to reform the Directorate of Employment put forward in December 1997 by its Director.

In an interview on national Norwegian television in January 1998, the Minister of Labour and Government Administration, Eldbjørg Løwer, called for the lifting of the ban on private employment agencies (reported in Aftenposten on 9 January 1998). Speaking in general terms about the contemporary labour market situation in Norway, she recognised the need to modernise the present system of regulations on private employment agencies as well as on the temporary secondment of employees from one firm to another (NO9708118F). Ms Løwer envisages a reversal of the present legal arrangements in both areas. The prohibitions on private employment agencies and on the temporary secondment of employees from one company to another should be abolished, while alternative restrictions may be put on certain types of occupational groups, and on the quota of workers on "lease" in any given firm or company.

Present labour market policy, according to the Minister, needs to be brought up to date, in order for it to deal properly with the new and changing requirements of the modern labour market. These reforms will, according to the Minister, also enable Norway to meet the criteria incorporated into the 1997 ILO Convention on private employment agencies (C181), in which private employment agencies are seen as important for the flexible "functioning of labour markets". Norway has yet to decide whether to ratify this Convention or not. Ms Løwer points out that her proposal does not imply the end of public control as we know it, but rather that the opening up of private employment agencies and temporary secondment of labour should be seen as a healthy supplement. The Minister of Labour's intention is to set up a committee to consider carefully the whole issue in depth.

Director of Employment's proposals

The Minister of Labour's initiative follows a proposal put forward by the Director of Employment, Ted Hanisch, on the 19 December 1997, in which he repeated a wish for the abolition of the general ban on private employment agencies (NO9711135N). He also proposed a new and groundbreaking reform of the Directorate of Employment itself, which calls for the creation of a joint-stock company in charge of the "leasing" of labour. The new agency would compete on the same basis as its equivalent private companies, but would be subject to the control of the Directorate. No major changes would take place in the existing restrictions on the private "leasing" of labour, but the proposal would enable the Directorate to gain access to, and better control of, the limited areas of such labour market activity. The proposal also suggests the transfer of the statutory provisions regulating the leasing of labour from the National Employment Act to the Working Environment Act.

Mr Hanisch justifies these reforms on the grounds of the changing nature of the labour market both nationally and internationally. The need for so called "temping services" is expected to increase in the years to come, and there are already signs of an imbalance between supply and demand in the Norwegian labour market. This need will be further fuelled, according to Mr Hanisch, by the introduction of new reforms generating improved rights on leave of absence.

Commentary

The rise in the number of private employment agencies agencies, as well as other more pressing factors have contributed to intensifying the labour market debate in Norway. The contemporary situation in the Norwegian labour market is an important reason for the rise on the agenda of questions concerning regulations on private employment agencies and the temporary secondment of employees from one firm to another. In recent years the scale of "leased" labour has increased, and the Directorate of Employment estimates that subcontracted labour constitutes approximately 1% of the total labour force.

At present the Directorate of Employment holds a monopoly of employment exchanges, and both private employment agencies and the allocation of the temporary assignment of employees from one organisation to another are prohibited according to the Employment Act. Despite the prohibition on the leasing of labour certain exceptions are provided for, which is the case in relation to some private temporary employment agencies. The Directorate's monopoly on employment exchanges has also come under a certain amount of pressure in recent years. Private agencies today provide services that could be defined as a form of labour exchange, such as those services concerning recruitment. At the same time the pressing situation in the Norwegian labour market, in which many sectors are witnessing shortages in human resources, calls for a more flexible policy approach in order to satisfy this demand for labour. It is especially the need for qualified doctors and nurses which has brought the issue to the top of the agenda.

The liberalisation of private employment agencies and the "leasing" of labour has been an issue on the political agenda for some time. The Conservative Party (Høyre) and the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO) have for a long time worked to reform the present restrictive system of regulation, and the former has expressed satisfaction with the proposal put forward by the Minister of Labour. The Conservative Party has also put two motions before Parliament, in which it is suggested that private employment agencies and the temporary secondment of employees to other firms should be permitted. The previous Labour Government was reluctant to see any changes in the present legal framework, and has yet to officially comment on the proposal by the new Minister. The response of the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) has been lukewarm to the idea of reform in most respects, but although it is opposed to the idea of private employment agencies, it is willing to consider the suggestion of a public labour "leasing" agency. The three parties presently in government have been divided on these issues, and the Center Party (Senterpartiet) especially has expressed support for the legal framework to remain as it is. It is not clear whether the proposal of the Minister of Labour, who represents the Liberal Party (Venstre), has the backing of the other two political parties in the coalition government. Hence, the proposals put forward by the Minister of Labour, the Director of Employment and the Conservative Party implies that questions concerning private employment agencies and the temporary secondment of employees will continue to be on the political agenda for some time. (Kristine Nergaard, FAFO Institute for Applied Social Science)

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