August 15, 2023
Since the beginning of the year, we have been closely monitoring legislative changes in the employee leasing industry in Norway. The new regulations came into effect on April 1st, and the transitional period for companies that had signed employee leasing contracts under the old rules ended on July 1st.
The new regulations forced us to limit our operations and offer different services in Eastern Norway. We created a service called HR-ressurs, which, in a simplified form, means employee recruitment paid upfront, along with HR administration and quality assurance at all stages, from recruitment to employment and probation.
Heine Aardalen, along with other entrepreneurs from the employee leasing industry, has filed a lawsuit with the Oslo District Court, demanding the lifting of the ban and restrictions on leasing. The case has also been referred to the EFTA Surveillance Authority (ESA).
More about the lawsuit aiming to lift the leasing ban in Norway can be found here. (Norwegian only)
Interviewer:Anna Korpalska
Graphics:Novum , Stolt AS
New regulations on hiring-out employees in Norway
Since the beginning of the year, we have been closely monitoring legislative changes in the employee leasing industry in Norway. The new regulations came into effect on April 1st, and the transitional period for companies that had signed employee leasing contracts under the old rules ended on July 1st.
Under the new regulations, there is a complete ban on employee leasing in the construction industry in the Oslo, Viken, and former Vestfold regions. The rest of the country is subject to significant restrictions on hiring leased workers. One of the conditions that allow for employee leasing is the company's affiliation with labor unions.
These legislative changes have prompted representatives of the employee leasing industry to be actively involved. One of the industry's vocal advocates is Heine Aardalen, the owner of a staffing agency that reached a turnover of over 200 million NOK during its peak period. The company employs many foreign workers, including those from Poland. After the new regulations were introduced, Stolt AS had to lay off over 150 people. Thanks to Heine Aardalen's kind cooperation, we present an interview where Novum asks questions about the industry's situation and the consequences of the new regulations.
You have been in the industry for many years. Do you believe that issues related to leased workers are genuinely common? How many leased workers have been affected by social dumping?
Approximately 80% of employee leasing companies in Norway are members of NHO (Confederation of Norwegian Entrepreneurs). Social dumping and other forms of discrimination are not possible within NHO as its members undergo detailed inspections conducted by external auditors, covering all aspects of employer obligations toward employees.
Social discrimination is a significant problem in many industries, perhaps most notably in construction. My experiences show that the employee leasing industry works against discrimination while providing legal and transparent employment flexibility. In my opinion, the ban and restrictions on leasing for serious industry representatives will have an opposite effect to what the government intended. The government aimed for more permanent, full-time positions, but the measures taken are an inappropriate remedy resulting from an incorrect diagnosis.
You had to lay off around 150 employees. Have any of them considered returning to Norway? Have they contacted you? How has the new regulation affected their lives?
The new regulations forced us to limit our operations and offer different services in Eastern Norway. We created a service called HR-ressurs, which, in a simplified form, means employee recruitment paid upfront, along with HR administration and quality assurance at all stages, from recruitment to employment and probation.
Some of our employees kept their jobs at our Trondheim branch, some transitioned to HR positions, some left for home or other countries to find work there. Some of them became unemployed. The worst affected are those who were in the most vulnerable situations before. They lost their jobs and are now dependent on NAV (the Norwegian Labour and Welfare Administration).
Have you ever heard from workers from Poland or other Eastern European countries that they need permanent employment in Norway? In my opinion, many people prefer rotational work and value employment flexibility. How has this been in your company?
It is true that many people prefer rotation and flexibility. All employees at Stolt AS have permanent positions, but we still manage to provide them with the flexibility they need. This is also one reason why more and more people are opting to work in other countries outside Norway. There, they can enjoy the benefits that the employee leasing industry in Norway offered before the introduction of restrictive measures. Norway is losing much-needed and competent labor force.
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One last question. Can it be said that the new regulation has achieved its goal? Do you have any information that leased workers are being hired by customer companies?
In short, no. There are very few leased workers who have been permanently hired by their company's customers. NHO estimates this to be around 10 percent of cases. As I mentioned before, the rest of the workers either return home or go to other countries. Some receive unemployment benefits, and others find temporary jobs. We warned about this from the beginning of the discussions. Unfortunately, we were not listened to and were accused of being pessimistic. Now it turns out that, unfortunately, we were right.
Thank you for the interview. I know you are giving quite a few now, so I especially appreciate your time with us.
Heine Aardalen, along with other entrepreneurs from the employee leasing industry, has filed a lawsuit with the Oslo District Court, demanding the lifting of the ban and restrictions on leasing. The case has also been referred to the EFTA Surveillance Authority (ESA).
Interviewer:
Graphics:
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