The new law will come into effect from April 1st, which will see a ban on staff in the construction industry in Oslo and Viken being outsourced by recruitment firms.

Additionally, the new rules find that those who have worked with the same business for more than three years will have the right to a permanent direct job with the employer they are sourced to.

Furthermore, the right for firms to hire from staffing companies when the work is of a temporary nature will be revoked.

Since forming in 2021, the government has prioritised increasing the number of permanent positions in Norway. It and LO, Norway’s largest trade union umbrella, say the practice reduces permanent employment and erodes the rights of workers and the responsibilities of companies.

Up to two percent of the workforce in Norway is employed by a staffing agency. In certain industries, such as construction, the proportion of those employed by agencies is around eight percent.

Companies which rely on the temporary hiring of labour to meet their needs have reacted strongly to the law change, while permanent employees at staffing agencies also risk losing their jobs.

Two staffing firms, one Lithuanian and one Norwegian, have complained to the ESA, which is the EFTA’s monitoring body and ensures that EEA law is complied with, the Norwegian newspaper Aftenposten reports.

They argue that the new law goes against EEA regulations on temporary workers. The ESA has contacted Norway’s Labour Minister and asked for documentation and for the ministry to answer a number of questions.

The ministry will be asked to explain or prove why Norway’s labour market is not working correctly and that permanent employment will increase as a result of the law change. Furthermore, it will be required to prove health and safety will improve and highlight that staffing firms have a negative consequence in Norway.