How Will the Changes in the Norwegian Working Environment Act Impact the Right to Permanent Employment?

The Current Requirements from Temporary to Permanent Employment

To contribute to the principle of permanent employment, the Working Environment Act draws up the situations and the timeline for when temporary employment is a legal alternative to permanent employment.

Section 14-9, paragraph two letter a and b of the Working Environment Act, provides the possibility of temporary employment for special and time-limited needs. Letter a establishes this possibility when the work is of a temporary nature – e.g., seasonal work or short-term and clearly defined peaks in the workload. Letter b establishes the possibility of temporary employment for temporary replacement for another employee – typically during vacation periods or leaves of absence.

Where the company’s need for labor is relatively stable, it is desirable for the need to be met through permanent employment rather than temporary employment. If someone is temporarily employed for an extended consecutive period, it may indicate that the need is permanent and stable. As a result of this, Norwegian law operates with a limit in for how long the duration of temporary employment can be before it is considered a permanent employment and thus having stronger protection against dismissal under Chapter 15 of the Working Environment Act.

That the temporary employment must be consecutive essentially means that the temporary employment must be uninterrupted or continous. However, short interruptions will not affect the calculation of the time limit according to the preparatory works.

According to Section 14-9, seventh paragraph of the Working Environment Act, an employee who has been temporarily employed for more than four consecutive years is considered permanently employed where the basis for the employment is Section 14-9, second paragraph, letter a. Where the basis for the temporary employment is letter b or a combination of both, more than three years of consecutive temporary employment is required.

In other words, in recent years, it has depended on the basis of the temporary employment whether the employment triggers permanent employment after three or four years.

The Most Significant Changes from the New Year

From January 1, 2024, this threshold is harmonized. An employee will from this point be considered permanently employed after three consecutive years of temporary employment, regardless of whether the basis for the temporary employment is letter a or b. According to the Ministry of Labour and Social Inclusion, the rationale is simplification and that there is no sufficient basis for the distinction that has been applied thus far.

Reference is also made to the threshold for hiring workers under Section 14-12, fourth paragraph of the Working Environment Act. If an employee has been continuously hired for more than three years, the employee is entitled to permanent employment with the lessor. The Ministry of Labour and Social Inclusion emphasized in its reasoning that it would be arbitrary if hiring workers in certain situations would achieve stronger protection against dismissals after a shorter period of time than temporary employees.

What Happens to Already Established Employment Relationships?

The change only applies to temporary employment agreements entered into after the new law enters into force on 1 January 2024. This means that for temporary employees employed in accordance with section 14-9 second paragraph letter a before this time, four years of continuous temporary employment is still required before the employment is considered permanent.

What Consequences can it have for you as an Employer?

In accordance with Section 14-11 of the Working Environment Act, the courts can, at the employee’s request, pass a judgment that there is a permanent employment relationship. The employee can also claim compensation. However, these rules are not practical alone.

The consequence for the employer typically shows when the employment is to be terminated. The employer often believes that the employment ends when the temporary employment contract expires, without any specific requirements as to how the termination is to be carried out.

However, if the temporary employed employee qualifies to permanent employment under the above stated rules, Chapter 15 of the Working Environment Act will apply. This means, among other things, that the employer cannot legally terminate the employee without an objectively justified reason based on circumstances relating to the company, the employer or the employee under Section 15-7 of the Working Environment Act. Furthermore, the employee has the right to remain in his or hers position in case of a dispute about the termination, as stated in Section 15-11 of the Working Environment Act.

Therefore, employers should strive to be aware of how long temporary employees have been working in their company. This way, they can adhere to the correct set of rules for the specific employment, and better reflect the short-term and long-term needs of the business, as well as avoiding surprises.