The Storting has recently adopted new rules on the hiring of labour from manning companies. The rules will come into force as early as 1 April 2023. The changes have a major impact on companies’ access to hiring labour from manning companies and will also affect the validity of existing manning agreements, explains lawyer Malin Stenseth.
Why is there a distinction between hiring from manning companies and production companies?
The Working Environment Act has different rules for hiring from manning companies and production companies. The background for this is linked to the Working Environment Act’s main rule that employees shall be employed permanently. Employees who are hired out from production companies are, in contrast to those in manning pools, guaranteed the necessary stability and security as a result of the fact that the person in question will return to their permanent work after completing the assignment.
Therefore, the rules for hiring from manning companies are currently stricter than for hiring from production companies, and will now be tightened further.
Hiring from manning companies – what is applicable in the future?
Hiring from manning companies is currently permitted to the same extent as temporary employment can be agreed. The Working Environment Act sets out five grounds for when an agreement on temporary employment, and thus also hiring, can be entered into:
- When the work is of a temporary nature
- For substitutes
- For trainees
- With participants in labour-market measures
- With athletes, sports trainers, referees, and other leaders within organised sports
It has now been decided that from 1 April 2023, it will not be permitted to hire employees from manning companies on the basis that the work is of a temporary nature. Hiring from manning companies will be reserved for substitutes, trainee work and persons in labour-market measures or who are affiliated with sports.
It is important to note that it will still be possible to enter into an agreement on hiring from a manning company after agreement with representatives. The prerequisite for this is that the business is bound by a tariff agreement with a union that has more than 10,000 members.
Read more about what you have to be aware of when hiring from manning companies here. Note that the article was written before new hiring rules were adopted.
What about existing hiring agreements?
The new hiring rules will come into force on 1 April 2023. For existing hiring agreements, the new rules will not take effect until 1 July 2023. Thus, the business has six months to adapt its staffing and ongoing agreements to the new rules.
The fact that the new rules, for agreements entered into before 1 April 2023, do not take effect until 1 July 2023 further means that the business can enter into agreements for hiring until 1 April 2023 on the basis that the work is of a temporary nature for planned and imminent projects. In this case, the agreement has to end within 1 July 2023 in order not to be in breach of the new hiring rules.
Note that hiring must be distinguished from contracting
Hiring and the hiring rules differ from what is called contracting, i.e. that the business buys a service from another party. Contracting is not covered by the rules of the Working Environment Act, and there are currently no detailed regulations or prohibitions relating to contracting.
Previously, the distinction between hiring and contracting was decided based on non-statutory criteria and assessment factors. In order to prevent misclassification between hiring and contracting, it has now been decided that a separate provision shall be introduced in the Working Environment Act that draws the line between hiring and contracting.
Pursuant to the new provision in the Working Environment Act, when assessing whether an assignment between to businesses involves hiring, particular emphasis is placed on the following:
- Whether the employer has management of the work and responsibility for the result
- Whether mainly labour is to be supplied
- Whether the work takes place in close connection with the employer’s business
- Whether the work uncovers an ongoing need for labour at the employer’s, and
- Whether the work takes place within the employer’s core or main business
This provision will also enter into force on 1 April 2023. For assignment agreements entered into before 1 April 2023, the provision will take effect from 1 July 2023.
Did you know:
- For hiring relationships from manning companies that begin after 1 April 2023, employees who have been continuously employed for more than three years (regardless of the basis) will be entitled to permanent employment with the hiring company
- If there is a breach of the rules on hiring by a manning company, the court shall, at the request of the hired employee, rule that the hired employee is permanently employed at the hiring company
- From 1 January 2023, a new rule will also be introduced in the Working Environment Act stating that, as a general rule, employees shall be employed full-time in a 100% position. The business can still hire employees in part-time positions, but from the new year there will be requirements for the procedure for such employment.
***
If you are unsure whether you are able to enter into an agreement on hiring from manning companies or production companies, we recommend that you seek legal advice today. SANDS’ employment law team regularly assists employers who need assistance in connection with hiring. Feel free to contact us.