Norway: Equal treatment of temporary agency workers
An evaluation of the implementation of Norwegian regulations transposing the directive on temporary agency work, concluded that the ‘equal treatment’ principle had led to more equality, in practice, but that challenges remained in smaller temporary work agencies and where agencies were hiring out workers to the construction and shipbuilding industries.
The study evaluated the implementation of the regulations on the equal treatment of temporary agency workers introduced in 2013 to transpose the EU Directive on Temporary Agency Work (2008/104/EC) into Norwegian law.
Transposition of the EU Directive on Temporary Agency Work into Norwegian law in January 2013 introduced the principle of ‘equal treatment’ to the temporary agency work industry. In order to ensure compliance, the Parliament established mechanisms to make it easier to monitor and enforce the regulations. These mechanisms include the right to get information about wages and working conditions from the hiring company, the temporary work agency and the local trade union representative in the hiring company. The hiring company can also be held jointly liable if the agency does not comply with the ‘equal treatment’ principle, as laid down in Sections 14-12a to 14.21c of the Working Environment Act (PDF).
The research, commissioned by the Ministry of Labour and Social Affairs, was carried out in 2015 and 2016 by researchers at the Fafo Institute for Labour and Social Research in Oslo, Norway. The main research questions were:
- Do temporary agency workers have wages and working conditions in line with the principle of equal treatment?
- Is temporary agency work organised as fictitious subcontracting work in order to bypass the regulations?
- How are the regulations controlled and enforced?
- Is there a need for new regulations or new measures to ensure compliance?
The evaluation was based on qualitative data and included 31 semi-structured interviews with social partners, management and local trade union representatives in temporary work agencies and inspectors at the Norwegian Labour Inspection Authority. The researchers also carried out 89 structured interviews with management and local trade union representatives in hiring companies in the following sectors:
- construction and electrical work;
- office work;
- ship building;
- food industry.
Some 85 of the interviews were with representatives from companies bound by collective agreements, and the researchers felt they probably interviewed companies among the better half when it comes to knowledge of, and compliance with, the equal treatment regulations. The researchers also made use of data from a survey among local trade union representations affiliated to trade unions in the Norwegian Confederation of Trade Unions (LO).
At the time of the evaluation, none of the exemptions to the equal treatment principle, as laid down in the directive, were in use in Norway.
The main conclusion from the evaluation (PDF) was that the equal treatment principle seemed to have indeed led to more equality, in practice, between temporary agency workers and other employees in client companies. Awareness of the regulations appeared to be high among both temporary work agencies and companies hiring employees. In particular, those agencies that already had good systems and routines in place before the new regulations were applied had been able to adapt and improve them such that the new rules are followed. These agencies are responsible for the majority of temporary worker services in many of the sectors studied. In smaller temporary agencies, however, these systems and routines appeared to be lacking.
Hiring companies are not obliged to check on the wages and working conditions at temporary work agencies, but can be held jointly liable for non-compliance with the regulations. However, this liability seems to have had little effect so far and cannot be seen as a sufficient threat to push hiring companies to check on the agencies. Many customers rarely carry out thorough inspections of the agencies they use and this, combined with a lack of systems in the agency, carries the risk that in some cases the rules are not being obeyed.
Whether companies complied with the regulations or not seemed, to some degree, to reflect the situation in the industry they were hiring to. The researchers therefore found differences in how temporary work agencies and their customers relate to the regulations when looking at office work, healthcare, construction work, and so on. They also questioned whether the equal treatment principle was being respected in the industries such as construction and shipbuilding where companies use a high volume of temporary agency workers and where many of those are labour immigrants.
Differences in the way wages were calculated between temporary and regular employees, as well as unequal practices relating to the reimbursement of expenses and work-related travel costs, meant there were significant differences in remuneration levels between temporary and permanent employees in the hiring companies. The researchers found evidence that hiring companies had adjusted their local wage agreements, leading to hiring workers being compared to the minimum wage level, while those employed directly by the company had higher wages. No evidence was found of fictitious subcontracting, but as many of the temporary agency workers in the construction and shipbuilding industries are paid the minimum wage, or just above, there is little to gain in trying to bypass the equal treatment regulations.
The interviews did not lead to suggested alterations to the regulations or the introduction of new measures. Many of those interviewed asked for the Labour Inspectorate to carry out more inspections. However, the Inspectorate has no authority to monitor the equal treatment regulations and has limited resources.
The Confederation of Norwegian Service Industries (NHO Service), which organises temporary work agencies that account for 80% of the turnover in the industry, has established an authorisation regime that places requirements on its members. Requirements include a duty to document, through external audits, that they act in accordance with obligations under the Working Environment Act. The regime will be fully in place from 2017, so it is therefore too early to say what effect this will have.
The evaluation gives a first assessment of the functioning of the new regulations. The regulations met with much resistance from trade unions prior to their implementation, but many trade union representatives argue that the use of temporary agency workers should be reduced.
The evaluation used a qualitative methodical design and does not claim to be representative. Nevertheless, it shows that there is, at least among the most established companies within the five sectors covered, a high awareness of the regulations and a high degree of compliance. However, companies seem to be seeking ways to adjust to the regulations in order to minimise the cost of hiring personnel, and it could be said that these adjustments are actually a way of bypassing the regulations.
The use of temporary work agencies has been hotly debated and the results of the evaluation suggest there will be more heated discussions in the years to come.