The government announced on Tuesday it would introduce changes to laws requiring companies to treat temporary workers and permanent staff equally. It would mean employers could possibly pay temporary workers lower wages, under different working conditions.
The business community has long campaigned for an exemption to the equal treatment principle, set out under the EU’s Temporary Agency Work Directive, reported newspaper Dagens Næringsliv (DN). The directive aims to ensure workers who come into a role through an employment agency get the same pay and conditions as others in the company doing the same work.
Under the directive, it is possible to make an exception to the equality rules in cases where an employment agency has its own collective agreement. NHO and other employer organizations have petitioned the government to introduce an exemption, bringing Norway into line with its competitor countries. The former government rejected the proposal, but current Labour Minister Robert Eriksson announced on Tuesday an exemption was back on the table.
“Before the summer I will send a proposal for a new regulation for consultation, where we make use of one of the exemption provisions to the employment agency directive,” Eriksson said. “We will make use of the same provision as Sweden, Denmark and Finland.”
Commitment to competition
The Conservative/Progress Party coalition had promised more competition as one of its eight key focus areas. The government’s Europe minister, Vidar Helgesen, said changing the equal treatment principle was part of that commitment. “It will give Norwegian industry more equal competitive conditions with our Nordic neighbour countries,” he said.
Stein Lier-Hansen from employer organization Norsk Industri was among those who fought for the change, and was happy they’d been heard. He said one problem with the current regulations is that companies may have to pay higher salaries to some hired-in staff than to their own employees. He gave the example of Polish workers, who get an additional bonus of 20 percent to cover travel and board.
Different wages to colleagues
The exemption would mean a temporary worker would not have the same salary as the hiring company’s employees, but would rather be employed under the terms of whatever collective agreement had been negotiated between the staffing agency and unions representing temporary workers. In practice, more than 10,000 union members could be bound by agreements with a staffing agency.
“Both the staffing firms and those who are staff in employment agencies or staffing firms will get more predictability, because they can have a fixed wage to deal with,” said Eriksson. “Currently the salary for someone who is hired varies from position to position.” He said it was up to the parties to negotiate wages and working conditions, but admitted it could mean a temp worker was paid less than a company’s own employees.
“That could happen,” Eriksson said. “But the collective agreement must ensure protection of the hired. For example, if someone who is hired in gets worse pay than the wage of the company that’s hiring, then you must agree on other compensation – for example educational opportunities between positions. It can make people even more attractive in the labour market.”
More disorganized workplaces
The trade union confederation LO argued an exemption was unnecessary. Deputy Tor-Arne Solbakken said only businesses that do not have collective agreements currently would benefit from the exemption, because equal treatment had already been negotiated into all union members’ settlements.
He told DN the exemption was a step towards a more disorganized working environment. Solbakken questioned why Norsk Industri was so happy about the change, because he did not believe it would make any difference for the employer organization’s members. “Stein Lier-Hansen’s members will not get any pleasure out of this, and he knows that perfectly well,” said Solbakken.
“We interpret the provision in a completely different way,” Lier-Hansen responded.
Increase temporary employment?
Labour researcher Knut Røed at Frischsenteret was skeptical the measure would increase access to temporary employment, one of the goals mentioned by the labour minister. The government said that vulnerable groups would get more opportunities to enter the workforce. Currently, the risk of hiring can be too great for employers who are unsure if an applicant is suited to a job. The threshold for hiring would be lower if employers had the opportunity to hire temporarily for up to one year, as opposed to the current conditions which only allow temp hiring for temporary positions.
“A possible beneficial effect is that it will become safer to try out people you are unsure about,” Røed explained. “That’s the positive side. The danger with such a system is that you can get a dual labour market where those with permanent jobs will be even safer. They will have a buffer of the temporary workers bearing the brunt if times become difficult, and therefore have less incentives to wage moderation. This can lead to higher unemployment.”
He argued it would stigmatize workers who had been through a number of temporary positions. Overall, Røed said the negatives outweighed the benefits of the scheme.
LO’s leader, Gerd Kristiansen called the proposal “queasy Progress Party policy” and a “declaration of war” against the rules of the Norwegian labour market requiring consultation before big changes are made.
“It will be more convenient to hire those who are employed, and lower the threshold into jobs,” she said. “But it will also become easier to lay people off, and this waiver is now the biggest problem in Norway.” Kristiansen worried about the long-term economic and social impacts of the proposal.