Thematic feature - posted workers

This article examines the Norwegian situation, as of June 2003, with regard to: legislation and collective bargaining on the pay and conditions of posted workers (ie workers from one EU Member State posted by their employer to work in another); the number of such posted workers; and the views of the social partners and government on the issue.

EU Directive 96/71/EC concerning the posting of workers in the framework of the provision of services seeks to avoid 'social dumping' by ensuring that a minimum set of rights is guaranteed for workers posted by their employer to work in another country. The basic principle is that the working conditions and pay in effect in a Member State should be applicable both to workers from that State, and those from other EU countries posted to work there. The Directive covers undertakings established in a Member State, which, in the framework of the transnational provision of services, post workers to the territory of another Member State.

The Directive establishes a core of essential regulations aimed at ensuring employees' minimum protection in the country in which their work is performed. It guarantees the application of the host country's statutory and regulatory provisions relating to:

  • maximum work periods and minimum rest periods;
  • minimum paid annual holidays;
  • minimum rates of pay, including overtime rates (excluding supplementary occupational retirement pension schemes);
  • the conditions of hiring-out of workers, in particular the supply of workers by temporary employment agencies;
  • health, safety and hygiene at work;
  • protective measures with regard to the terms and conditions of employment of pregnant women or women who have recently given birth, of children and of young people; and
  • equality of treatment between men and women and other provisions on non-discrimination.

As well as these generally applicable statutory and regulatory provisions, a Member State's collectively agreed provisions on these issues must also be applied to workers in the construction sector (where these are based on 'collective agreements or arbitration awards which have been declared universally applicable').

The Directive allows for a number of exceptions to all or some of these 'minimum provisions' for: the crew of merchant ships; staff involved in the initial assembly and/or first installation of equipment; postings lasting less than a month; and where 'the amount of work to be done is not significant'. The Member States were obliged to transpose the Directive by 16 December 1999.

In 1999, the European Industrial Relations Observatory (EIRO) conducted a comparative study on posted workers and the implementation of the Directive. In June 2003, the EIRO national centres in each EU Member State (plus Norway), have updated the basic information in the earlier comparative study, four years on, in response to a questionnaire. The Norwegian responses are set out below (along with the questions asked).

The regulatory framework

What changes were made to national legislation in your country in order to implement the Directive? And have there been any further changes to the relevant legislation since then?

Although Norway is not an EU Member State, the European Economic Area (EEA) agreement placed an obligation on it to implement the EU Directive on the posting of workers. To this end, on 5 November 1999 the government issued a white paper, in which it proposed alterations to the existing legal framework. Thus new rules were approved by parliament (Stortinget) and came into effect from January 2000 (NO0001170N).

The general view was that the national legal framework already covered almost all areas subject to regulation by the Directive. Furthermore, most of these legal provisions are automatically made applicable to all employees working in Norway, including posted workers from other countries. However, some minor changes and efforts to clarify the legal framework were seen as necessary. These changes were drawn together into a new Section XII B of the Act relating to Worker Protection and the Working Environment (AML), on the posting of employees.

Please outline very briefly the current legal position of posted workers in your country - are they covered by specific or general employment legislation, what is their position with regard to social security (are they covered under the social security system in their country of origin or the host country?) etc. Also, have any specific measures been taken to prevent abuses arising from the posting of temporary agency workers (eg an agency hiring temporary workers through a subsidiary in a low labour cost country and sending them to work for a user company in a higher labour cost country)?

The new section of the AML has made a number of provisions of the Norwegian legal framework applicable to posted workers, although in most cases it has not involved significant changes to the content of existing provisions and previous interpretations of these rules. One exception, however, are the provisions relating to leave entitlements (the right to leave and leave allowances), where the new regulations have led to a strengthening of the rights of posted workers in Norway.

The new provisions have been made applicable to all foreign employees in Norway, not just employees from the EU/EEA area.

A clause was also included to make similar rules applicable to Norwegian employees posted abroad by their Norwegian employers. In this regard it was further stipulated that employment contracts requiring employees to work abroad must contain information about the duration of assignment, the currency in which wage is paid, the nature of wage compensation for assignments abroad (if such is given), as well as opportunities for visits home (if such are given).

The role of liaison or cooperative body, as stipulated in Article 4 of the Directive, has been given to the Norwegian Labour Inspectorate (Arbeidstilsynet).

Have there been any collective agreements concluded on the issues covered by the Directive? Have the social partners been consulted as part of the legislative and policy-making process and, if so, in what way? Have the social partners taken any other initiatives related to posted workers?

No collective agreements or initiatives by the social partners specifically concerning posted workers have been reported in Norway. However, an issue discussed in connection with the implementation of the Directive was how to avoid 'social dumping'- ie foreign workers being offered poorer wages than are the norm in Norway. There is no minimum wage legislation in Norway, and there is no practice of extending collective agreements (TN0212102S). The Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) thus called for the inclusion of provisions making wage conditions in nationwide collective agreements applicable to posted workers, despite the fact that these agreements are not 'universally applicable' (as referred to in the Directive's Article 3(8)). The relevant Ministry drew attention to difficulties connected to the introduction of such provisions. There is notably some uncertainty as to whether or not the coverage rate of Norwegian collective agreements is broad enough to fall within the scope of the Directive’s provisions with regards to this type of extension. Thus provisions extending wage conditions in collective agreements to posted workers were not included.

The workers affected

Please provide the latest figures available on the number of employees who are posted from your country to other EU Member States.

There are no data available on the number of Norwegian employees posted to EU/EEA countries.

Please provide similar figures, if available, for employees posted to your country from other EU Member States.

Foreign companies commissioned for work in Norway must report on their activities to the Norwegian tax authorities, which includes providing information about the number of employees. In some sectors (building and construction and offshore oil activities) those parties commissioning work from foreign companies are also obliged to make such information available to the tax authorities. On the basis of the information provided by these companies, the number of posted workers working in Norway may be discerned. Inadequate reporting is a problem, though the authorities do not know the extent of this under-reporting.

Figures from the tax authorities (Sentralskattekontoret for utenlandsselskaper)s how that approximately 16,600 foreign employees employed by 1,400 non-Norwegian companies were working in Norway in 2002 (ie posted workers) - compared with 13,200 in 2001 and 14,400 in 2000. One third of these were working offshore (in oil production and other oil-related activity). Most of the other employees were employed in the building and construction sector, but other types of activity also featured. Posted workers (as defined above) come from a variety of countries. However, 70%-80% come from the other Nordic countries or the UK (the latter group mainly works offshore).

Workers in the construction industry

The EU Directive, although of general application, is aimed particularly at workers in the construction industry (building and public works), in which discrepancies between practice and legal standards are often observed. Has any special action been taken by the social partners or the state to address the situation of posted workers in this industry?

In the building and construction industry there is a long-standing tradition of using foreign labour, in particular from the other Nordic countries. There has in recent years been a significant focus on the substandard working and employment conditions that many foreign employees experience in this industry, as well as in associated branches such as shipbuilding and oil-related offshore yards. Such concerns are mainly directed at workers from eastern and central Europe, rather than workers from the EU/EEA area. The trade unions argue that there has been an increase in this kind of employment lately, and worry that this trend will continue in the coming years.

Trade unions, led by the Norwegian United Federation of Trade Unions (Fellesforbundet), maintain that they have seen a growth in the number of substandard companies. The implication of this is an increase in the number of foreign employees subject to less satisfactory pay, employment and working conditions, which do not comply with rules and regulations. Examples of such companies have also been referred to in the media. It is, however, difficult to gain an impression of the magnitude of substandard employment conditions. Poor registration is one problem, because control is made difficult by the fact that many employees and companies are operating in the country illegally. Another problem, emphasised by the unions, is that wage conditions as they are presented in official documents may often differ (and be better than) those under which the employees concerned actually work. Such deviations are often difficult for trade union representatives or regulatory authorities to expose. Finally, although there are rules in the Immigration Act guaranteeing foreign workers the same pay and conditions as nationals, trade unions claim that these rules are insufficiently enforced and monitored.

Positions of the social partners and the government

Please outline the stances adopted by the social partners and the public authorities/government on this issue. Particular attention should be given to unions and employers in the construction industry.

The debate on posted workers in Norway (but also on foreign workers working for Norwegian employers) is first and foremost concerned with foreign companies operating in the Norwegian building and construction sector, and in shipbuilding and other yards. This may involve both foreign entrepreneurs commissioned to work in Norway as well as foreign labour-hiring firms. The discussion has also to a certain degree evolved around posted workers in the form of foreign healthcare workers from labour-hiring firms (mainly nurses), but Norwegian labour-hiring firms now largely run this activity. In the latter case the main argument against has been that these groups tend to work more than allowed for by the regulatory framework.

The issue of regulating Norwegian employees working in other EU/EEA countries has not been a significant issue. The Labour Inspectorate receives some inquiries about this part of the legal framework, but mostly from employers that want to know more about the existing rules in force.

Fellesforbundet has initiated a research project on substandard firms in building and construction and offshore yards, looking at matters such as the activities of foreign companies (labour-hiring firms and entrepreneurs operating as subcontractors). Fellesforbundet and LO are also considering raising again the issue of the extension of the wage provisions in collective agreements. This measure is not directly connected to posted workers, but would also apply to this group if successful.

The trade unions in building and construction (mainly Fellesforbundet) also try to clamp down on flawed employment contracts by means of monitoring by employee representatives at company level. It is, however, difficult to obtain information about the real pay and conditions of this type of worker - ie the gap between what is stipulated in formal employment contracts and actual working conditions.

In the Nordic countries, trade unions in the building and construction sector cooperate to protect the rights of employees when work is carried out in another Nordic country.

Substandard companies (in particular foreign and national companies employing underpaid foreign labour) are also regarded as a problem by Norwegian employers' organisations, since their existence puts companies complying with collective agreement and legal regulations at a competitive disadvantage. The employers' organisation for the building and construction sector, the Federation of Norwegian Construction Industries (Byggenæringens Landsforening, BNL), has placed 'ethics' (including these issues) on the agenda.

The public authorities and the social partners pursue extensive monitoring activity in areas such as the working environment, working conditions and tax evasion within the building and construction industry. Regular health and safety campaigns are carried out, and recently efforts to prevent tax evasion have also been stepped up. Such campaigns are often founded on cooperation between the social partners and the authorities.

In spring 2003, Fellesforbundet, BNL, the tax authorities and the labour inspectorate initiated a pilot scheme whereby a large building project is to be completed in full compliance with all standards laid down in the legal framework. Among the new measures being put to the test in this scheme are routines to monitor the legality of the employment and tax conditions of employees working for different subcontractors.

Most of the measures referred above are not directly aimed at posted workers and foreign subcontractors as such, but this group has received significant attention since some of these businesses allegedly provide their employees with poorer working conditions than required by law. (Kristine Nergaard, FAFO Institute for Applied Social Science)

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