In the past few years, the political tide in Europe has changed as left-leaning governments have triumphed in several countries — Spain, Norway, Sweden, the Netherlands, Denmark, Finland and Portugal. Time and again, employment law is where the political shift is most visible. The consequence of this for temporary work is that these newly elected governments are keen to stand up for workers’ rights and rebalance employment away from flexible forms of insecure work. Here are a few of the countries’ changes.
Spain. Spain’s socialist government passed a regulation in December 2021 to fight businesses’ increasing reliance on temporary contracts — some of the highest in Europe. This law restricted temporary work to specific permitted reasons, withdrew the ability to use project-based contracts and pushed employers to stick to term limits of 18 months within a total of 24 months, with a sanction of permanent employment if they fail to do so.
Norway. Following its election in 2021, the Norwegian Labour government stated that permanent jobs should be the main rule in Norwegian working life. As of 1 July, the general “quota” rule was removed from the Working Environment Act as one of the permitted criteria for companies wishing to hire temporary workers. Employers will need to justify their use of agency workers under one of the remaining five grounds.
The Norwegian government has also vowed to initiate legislation to limit the scope and role of the staffing industry. They propose to introduce a right for unions to challenge the legality of an assignment of an agency worker from a temporary work agency. Another proposal is to introduce a ban on hiring agency workers for construction work in the Oslo area. There has been no action as of this writing to legislate these proposals, but staffing firms operating in Norway should look out for further regulation. Sweden. Norway’s neighbour, Sweden, is finally implementing reforms to the labour market to make temporary work less attractive.
Historically, employers in Sweden have struggled to dismiss employees due to their performance because an employee merely had to dispute their termination to be entitled to remain employed — on full pay — throughout the court proceedings. Moving forward, the employee is entitled to back pay if the claim for reinstatement is successful.
This move to help businesses dismiss legitimately underperforming employees is balanced with less flexibility in relation to fixed-term staff. The maximum duration of fixed-term employment is reduced to 12 months from 24, and employers must offer temporary agency workers indefinite-term employment after 24 months at the same customer site or pay the worker a fee equivalent to two months’ salary.
The Netherlands. Mark Rutte’s coalition government in the Netherlands is pushing through labour-market reforms and a change of policy on temporary work recommended by the Advisory Committee on Employment Regulation of the Social and Economic Council (SER, also known as the Borstlap Committee). The SER is an advisory body in the Netherlands in which employers, employees and independent experts work together to reach agreement on key social and economic issues. Its 2020 report proposed measures to ensure that temporary work is only used for a temporary period.
As a result, the government advocates limiting fixed-term contracts to two years with a reduction in the period agency workers can be employed before being given a permanent contract. The Dutch government is also working on a licensing system for staffing agencies to stamp out rogue employment agencies and prevent the exploitation of EU workers.
It is not just European governments that are cracking down on forms of temporary work; Mexico and Peru in South America have passed measures restricting the use of labour outsourcing, while states in Australia and Ontario in Canada have extended their licensing regimes for temporary work agencies.
Some rebalancing of the flexible employment model was probably necessary because permanent work has been eroded somewhat with the rise of the gig economy. With these measures coming just as the world experiences the tightest labour market for decades and workers are clamouring for more flexible options, it remains to be seen when the tide will swing back in favour of flexibility — probably not before the next election.
