Changes in the Norwegian working environment act as of 1 January 2024

In the following, we will summarize the most important upcoming changes, and briefly explain how they can have an impact on employment relationships in an undertaking.

In short, the main changes in the WEA which will enter into force on 1 January 2024, can be summarized as follows:

For undertakings that are member of a corporate group, the rules regulating how to reorganize and downsize the organization will be extended. These changes will have significant impact in larger corporations in case of downsizing processes. The extension entails, amongst others:

• When downsizing, employers will be obligated to investigate whether there is "other suitable work" (vacant positions) in all the Norwegian undertakings of the company group that the redundant employee(s) may be offered. Traditionally, this obligation has only applied to the undertaking where the employee has an employment relationship.
• The preferential right to a new employment is also extended to the whole company group. This has also traditionally applied only to the employer company.
  
• The duty of information and consultation will be more comprehensive. Groups with undertakings that together employ at least 50 employees must establish a framework for cooperation, information and consultation with employee representatives across the undertakings.

From 1 January 2024, all companies who hires 30 employees or more will be obliged to establish a working environment committee (NO: "AMU"). Earlier, this obligation has only applied to companies with 50 employees.

Furthermore, all undertakings with more than five employees will be obliged to elect a safety representative. The safety representative's tasks will also be extended to including hired in employees and independent contractors who perform work in close connection with the employees of the undertaking.

The legal definition of the term "employee" is decisive for who can invoke employee rights under the WEA. As of 1 January 2024, the legal definition will be clarified and somewhat more comprehensive than today's definition. The purpose is to make it easier to understand who is considered an employee. The change might lead to more workers being covered by the WEA, such as some of the digital platform workers etc.

Furthermore, the change includes a principle whereby a worker shall be considered as an "employee". In situations where a company purchases services from an independent contractor, the company has the burden of proving that it is highly probable that the consultancy relationship is in fact that of an independent contractor and not an employee.

As of 1 April 2023, changes entered into force that limited the possibility of hiring employees from temporary work agencies (staffing companies). As part of this legislative change, the Norwegian Parliament adopted a new approval scheme for the temporary work agencies (staffing companies), to be administered by the Labour Inspection Authority. The terms and conditions in order for a temporary work agency to be approved, has since been clarified in a separate Regulation. This Regulation will enter into force as of 1 January 2024. From this date up until 31 March 2024, there will be a transitional arrangement, in which it is possible to hire employees from a temporary working agency that has a pending application for approval with the Labour Inspection Authority. After the end of the transitional period, any hiring of employees from an unapproved temporary work agency is considered illegal.

A new Section 14-14a will be introduced in the WEA, whereby the employer is obliged to consult at least once a year, or when either party requires consultation, regarding use of part-time employment and temporary employment, and also hire-in of employees, use of consultants and consulting services from third parties where this has an impact on the employment in the undertaking. The new provision will be subject to the Labour Inspection Authority's supervisory competence. The Labour Inspection Authority can therefore give use their general sanctions upon any employer not following the obligation.

Today, temporary employees are entitled to a permanent employment after either three or four years, depending on the basis for the temporary employment. From 1 January 2024, temporary employees, regardless of the basis for employment, are entitled to a permanent employment after three years of continuous employment. The same applies for those who have been hired for three consecutive years. The purpose of the adjustment is to strengthen the main rule on permanent employment, and to simplify the regulations.

The Board of Directors of the joint scheme for AFP has decided to increase the premium rate for AFP in the private sector from 2.6% to 2.7% of all salary between 1G and 7.1G. The premium is calculated for all employees between the ages of 13 and 61 years of age.