Legislative changes on hiring-in – The Norwegian Government's response to ESA

New amendments in the Working Environment Act entered into force as of 1 April 2023, greatly restricting the possibility of hiring-in employees from temporary work agencies.

Earlier this year, the EFTA Surveillance Authority ("ESA") made a request for information to the Norwegian Ministry of Labour and Social Inclusion regarding the assessments made for EEA compliance before introducing the new legislation. For context, restrictions in the free movement of services are not permitted under the EEA agreement unless such restrictions pursue a legitimate interest. ESA's request is primarily directed towards information on the assessments and reasons provided by Norwegian authority as part of the legislative process.

The Ministry of Labour and Social Inclusion delivered an extensive response to ESA in Mid-May detailing the Norwegian Government's position on the matters raised in ESA's request for information. In the letter, the Ministry of Labour and Social Inclusion argues that:

• The previous regulation did not adequately promote the Norwegian aim of permanent and direct employment, and the changes are necessary to achieve this aim.
• The protection of employees is a legitimate aim under the EEA agreement which the Norwegian State may weigh heavier than the interest of ensuring flexibility in the labour market as provided by temporary work agencies.
• Stricter regulation is required to ensure a well-functioning worklife and prevent abuse of the rules on hiring-in. As evidence to support this claim, the Ministry disclosed research reports from Fafo (an independent social science research foundations that gathers and develops knowledge about the conditions for participation in the working life in Norway) and Statsbygg discussing lack of compliance with the rules on hiring-in of labour from temporary work agencies.
• Permanent employees generally enjoy better workplace safety, stronger health and safety measures and a healthier working environment.
• Employers may still cover temporary needs by direct temporary employment or by hiring in from production companies.

ESA will now consider the response from the Ministry of Labour and Social Inclusion. If ESA is not satisfied with the response from and assessments made by Norwegian authorities, further proceedings could be instigated. If the restrictions are considered to be a violation of the EEA agreement, the rules must be changed to avoid legal proceedings for breach of treaty.

It's safe to say that the final word has not been said in this matter. Several temporary work agencies are preparing to fight the regulations in court, and the outcome of ESA's assessments will be watched carefully by participants across both sides of the work life in Norway. We will monitor developments closely and update when something happens.