Proceedings against the Norwegian Government before the EFTA Court: are the Norwegian restrictions imposed on the hiring-in of workers not compliant with the EEA Agreement?

The Written Observations submitted by the plaintiffs to the EFTA Court 

The plaintiffs argue that the rights provided by the EEA Agreement are applicable in the present case because there is a «cross-border element» – a factor that links the case to EEA law. All the temporary-work agencies employ individuals who either live in or originate from a country that is either a member of the EU or are part of the EEA. Moreover, as part of their service provision, the temporary-work agencies receive services from other EU or EEA countries. It is also clear that the rules make it less attractive for foreign temporary-work agencies or other companies to operate in Norway, as the legislative changes have made it, for the most part, illegal to hire-in necessary and competent labour to meet a temporary need. 

The conditions for limiting a fundamental right enshrined in the EEA Agreement are not met in this case. Firstly, the plaintiffs believe that the Government has not justified the measure with a legitimate objective. The Government seeks to justify the legislative changes by citing a desire to ensure direct hiring between undertakings and workers, eliminating temporary-work agencies as intermediaries. However, these changes to the legislation are made at the expense of temporary-work agencies, who primarily have permanent employees. This contradicts the fundamental interests protected by the Temporary Agency Work Directive (2008/104/EU), which aims to protect workers in temporary-work agencies. 

Furthermore, the plaintiffs argue that the measure is not proportionate, which is a requirement under EEA law. When the government seeks to justify the goal of direct employment in the labour market, it refers to an objective of protecting some underlying interests, including the work environment, health and safety, and a well-functioning labour market. However, they have not sufficiently proven that hiring-in from temporary-work agencies has a negative impact on these interests. Nor have they sufficiently demonstrated that the legislative changes will result in stronger protection of these interests. 

Consistency in the adopted measures is a condition for limiting the fundamental freedoms of EEA law. The Government allows temporary employment as long as it is done directly between the employer and the employee. Given that the consequences of temporary work are the same, regardless of whether the hiring is done directly through the user undertaking or not, the legislative changes appear entirely inconsistent.  

Finally, the plaintiffs argue that the prohibition goes beyond what is necessary. There are less restrictive, alternative measures available that still achieve the same level of protection the Government wants. Therefore, they have gone too far by introducing total bans and extensive restrictions, especially as they have not demonstrated that the issues they allegedly wish to resolve, are real. 

After the EFTA Court provides its advisory opinion, the case will continue in the Oslo District Court, which will have access to interpretations from the EFTA Court in Luxembourg when it considers the compensation claim itself. If the District Court finds that there has been a breach of EEA law, the plaintiffs may be awarded compensation for their losses, which currently total more than 40 million Norwegian kroner. However, the amount of compensation may increase, and more temporary-work agencies and their clients are welcome to join the compensation case by contacting senior associate Sigrid Fife Søyland.

 

Simonsen Vogt Wiig’s team consists of partner Jan Magne Langseth, project trainee Markus Fjeldstad Reve, senior associate Sigrid Fife Søyland, partner Nicolay Skarning and associate Håvard Bruksås Josefsen.