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Firms sue the Norwegian state over sub-contracting crackdown

Nine staffing agencies have filed a damages claim against the Norwegian government following the introduction of a clampdown on the rules for staffing and subcontracting.

Published: 6 September 2023 12:21 CEST

Pictured is a construction worker.

Firms are suing the Norwegian state for the introduction of tighter rules for subcontracting. Pictured is a construction worker. Photo by Greyson Joralemon on Unsplash

A damages claim of 35 million kroner has been filed against the Norwegian state due to new labour hiring laws, which the firms suing the state believe breach the EEA agreement.

The claim relates to a change of law introduced on April 1st by the government. The new rules have made it harder for employers to outsource or subcontract staff from recruitment firms.

A total ban was also introduced on subcontracting across Oslo, Viken and the former Vestfold county.

“The lawsuit is based on EFTA’s monitoring body being right that Norway has broken the EEA agreement. We will have this clarified by the EFTA court. If it confirms a breach of the EEA agreement, the state is liable to compensate all those who have lost money due to the staffing restrictions, which were introduced from April 1st this year,” lawyer Nicolay Skarning at the law firm Simonsen, Vogt and Wiig said to Norwegian newswire NTB.

The EFTA Surveillance Authority (ESA), which monitors compliance with EEA regulations, has previously said that the crackdown is “unjustified and disproportionate”. It added that the new regulations were in breach of the temporary agency directive and the freedom to provide services within the EEA.

A formal letter was sent by the ESA to Norway at the end of July asking the state to address the concerns. Under ESA procedure, Norway has two months from when the letter was issued to express its arguments that the new regulations don’t breach EEA directives before the matter can be taken to the EFTA court.

Earlier this summer, 30 staffing companies lost a court case against the state in Oslo district court. The companies believe the changes constitute a breach of the EEA agreement and have taken their case to the court of appeal.

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Is Oslo's project to speed up work permits on track?

For years, Norway has been grappling with a shortage of skilled professionals, notably in the technology and IT sectors.

Recognising the need to address this talent gap, The City of Oslo and other partners launched a pilot project in 2023 called Kompetansespor (Competence Track).

The primary goal was to reduce the lengthy wait times for skilled workers to get work permits from around nine months to three days.

READ ALSO: What’s next for Oslo’s plan to slash work permit waiting times?

But what is the current status of the project? And is the new super-fast work permit process any closer to becoming a reality?

How the project has evolved in 2024

Since its inception, Competence Track has evolved into a more ambitious project that goes beyond just cutting work permit times.

The project’s focus has shifted towards new goals, which mostly revolve around exploring the use of a “digital wallet” to streamline the immigration process.

To make this happen, partners involved in the project, such as the Norwegian Directorate of Immigration (UDI), will collaborate with other key stakeholders from the governmental, municipal, and private sectors.

READ MORE: How Norway’s permanent residence rules have been tweaked

As the UDI explains in a document seen by The Local, a digital wallet refers to “an electronic application or platform that allows users to securely store, manage, and share digital identity credentials and other types of digital data,” which plays a “central role in handling digital evidence or verifiable credentials in a digital ecosystem.”

The wallet allows relevant authorities to access the holder’s paperwork, rather than having documents and credentials stored separately across several portals.

New goals

The main aim for 2024 is to develop and explore an efficient and user-friendly process flow that can support the immigration of skilled workers to Norway.

According to a document that the Norwegian Directorate of Immigration (UDI) shared with The Local, other goals for the year include creating a prototype to test the efficacy of the digital wallet in improving immigration processes, investigating the feasibility of pre-qualifying employers to speed up the immigration process, and showcasing how collaboration across sectors can create better services for users.

The project remains committed to reducing administrative burdens, processing times, and information exchange accuracy, as well as preparing Norway for future challenges related to global mobility and digitalisation.

Meanwhile, the Oslo Business Region writes on its website that additional target groups such as students and family members of work permit applicants would be included in the fast track residence permit scheme.

From the information available at the time of writing, it seems that project will still revolve around Oslo.

Gustav Try, an advisor at the Norwegian Directorate of Immigration (UDI), told The Local that the UDI’s Department of Managed Migration is currently working on a new test phase called “Pilot 2.0”.

“We are currently working on Pilot 2.0, but it is not finalised. The plan is to pilot it on selected students at the University of Oslo (UiO) in August. We are also considering piloting it on skilled workers, including UiO employees, throughout the autumn,” the department said.

Back in September, Thea Ullhaug Pope, senior content developer for the City of Oslo, told The Local that one of the long-term ambitions of the project is to try and get the scheme adopted by other regions and then nationally.

However, while the Competence Track project continues to progress, it seems unlikely that the initial ambition of reducing work permit waiting times from nine months to three days will be achieved on a mass scale anytime soon.

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