In its response to the consultation from 19 January 2022, the Ministry of Labor and Social Inclusion in Norway has proposed amendments to the Working Environment Act in regard to hired labour from staffing companies.
Among other things, the proposal is to tighten the regulations when hiring from staffing companies in order to strengthen the government’s goal of more permanent employments. The Ministry is in favor of both targeted and general measures. It is proposed that the provision on hiring for work of a temporary nature be repealed, and to ban hiring of labour in the construction sector in the Oslo-area.
In the interest of our existing and future clients, it important for Magnus Legal to be proactive when it comes to changes that are important to our clients.
Therefore, we have submitted a consultation response where we focus on a number of key issues that we believe can raise challenges if the government's proposal becomes statutory.
Among other things, we have emphasized that if the opportunity to use staffing companies becomes stricter, companies will need to acquire the cutting-edge expertise via contract-based assignments. This can lead to a direct responsibility for self-employed persons to fulfill contractual obligations and will make them more vulnerable for legal disputes.
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It can also lead to a loss of cutting-edge skills and foreign labor since much of the need for labor supply is covered by hired foreign workers.
The alternative of concluding a consulting agreement will also lead to more bureaucratic challenges: VAT registration, national social security membership, required tax reports etc. These challenges are not attractive for foreigners. We believe that there is a qualified risk that the proposal may lead to a lack of correct and important expertise for various sectors in Norway, for example the oil and gas sector, which we often assist. We believe the proposal may lead to less competitiveness in Norway and more redundancies and downsizing processes.
We have submitted our response and are waiting for the final decision from the government.