Norway doing construction in a more orderly way, but EU temping rules might stop it

It is now 13 years since the 2011 terror attack. The bomb outside the highrise Høyblokka where parts of the government had offices caused structural damage to the building that had been built in 1958.

In January 2021, the rehabilitation of Høyblokka began, along with the construction of new buildings in the government quarter in Oslo’s city centre. 

The builder Statsbygg initiated one of the largest construction projects in Norway’s history, which aims to provide secure and quality workplaces for government departments. 

The construction of the new government quarter has been underway for three and a half years. It is due to be finished in 2030.

Strict security measures 

Øyvind Helle has been the government quarter coordinator for the Norwegian Confederation of Trade Unions LO since the beginning in 2020.

Øyvind Helle is the LO coordinator at the Oslo government quarter construction site. He makes sure everyone is following the rules.

“It is very demanding. The construction of the new government quarter is a special project covered by a strict security regime,” says Helle.

We meet him outside the construction site, as there are tight rules for who can get inside. Norwegian press photographers were only allowed in to take pictures from the inside a few weeks ago. 

A large workplace

Helle has been an LO coordinator for many years and across many major construction projects. He was the trade union movement representative when Oslo’s new National Museum was built.

Helle is also part of Samarbeid mot svart økonomi SMSØ (Cooperation against the black economy) Oslo/Viken, where he represents LO. SMSØ is an alliance of key players in the labour and business sectors who wish to cooperate in the fight against the black economy. 

And that is partly why we are talking to Helle. Because at a site with multiple contractors, many subcontractors, and even more workers – how do they ensure that everything is running as it should?

“It is challenging to keep an overview. But we feel we have good control with the operators that are involved and an overview over the workers, and that we can keep a tab on what we want, like wages and working conditions,” says Helle. 

The LO coordinator gives praise to Statsbygg, who he sees as being at least as keen as himself on following laws and regulations. 

While we are waiting for EFTA

Last year, the government tightened the rules on temporary labour. This included a ban on hiring employees from staffing agencies for temporary work. 16 staffing companies sued the government, arguing that the rules on temporary labour were in conflict with the EEA Agreement. 

The EFTA Surveillance Authority (ESA) and the EU Commission also believe the ban contravenes the EEA Agreement. However, the Oslo District Court and the Borgarting Court of Appeal have determined that the hiring ban does not violate the EEA Agreement. 

The staffing agencies brought the case to the Supreme Court’s Appeals Committee, which overturned the Court of Appeal’s ruling. 

A new ruling in the District Court will only be made after the EFTA Court has issued its opinion. The EFTA Court has indicated that it will deliver its judgment sometime this autumn.

Before and after the ban

At the new government quarter construction site, there is a time “before” and “after” the hiring ban that came into effect in the summer of last year. From one day to the next, the main rule in Oslo changed from no ban to a ban on the use of temporary labour.

“There was a considerable amount of staffing agencies involved in the project between January and June last year. When the ban came into effect, it all stopped,” explains Helle. 

Hired workers got permanent jobs. This was the same across all sectors – from concrete workers to electrical workers. 

This is how the new government quarter will look when it is finished in 2030. Photo: Statsbygg/Team Urbis/Nordic Office of Architecture

“A number of people who were employed by staffing companies were given permanent positions at the companies where they were hired to work. It worked out very well,” Helle explains. 

They also see that contractors, in the absence of available labour, borrow from each other, as was the case before staffing companies made their entrance in the 2000s.

Trying to find loopholes 

He believes that things went smoothly partly because Statsbygg is also committed to following laws and regulations. Perhaps the strict safety regime of the construction project has also helped a bit. The trade union movement does say that there are attempts to circumvent the current hiring ban. 

“We hear about staffing agencies who do not ‘hire’ out but ‘borrow’ labour for a fee. Some will always try to find loopholes. But we discover this and take action,” says Helle.

As the LO coordinator, he works closely with workers’ representatives and unions. This network is crucial in order to pick up such cases and follow them up, according to Helle.

What is the biggest change from before and after the ban?

“Before the ban, everything was very unclear. We would for instance be dealing with tens of staffing agencies on the project. It was difficult to monitor and verify things. We might only get an overview after the workers had gone. It was difficult to follow up on salaries and contracts, and as a result, it was difficult to disclose potential labour crimes and social dumping.

“With the new rules, we don’t have staffing agencies on the construction site, apart from those who might be working under the exception rules.”

What do you think about the total ban on hired workers? Is that the right measure to prevent social dumping?

“I am not entirely sure. Bringing in a ban will always mean that someone tries to find ways around it to reach the market they operate in. New and stricter rules on hiring were brought in as early as 2019. They were not in place long enough for us to find out whether they were sufficient,” says Helle.

A sustainable culture

The construction unions in the Oslo area have been mapping the use of temporary labour on construction sites in the region every other year since 2011. The latest survey was conducted in the autumn of 2023.

The De Facto report, "Out on the Construction Site, Entering a New Era," examines the situation on construction sites in Oslo and Akershus following the ban on the use of staffing agencies. The report also provides an insight into the situation in Bergen. 

LO coordinator Øyvind Helle at Youngstorget, often the trade union movement's arena, with the new government quarter rising in the background. 

The report concludes: “We are seeing the emergence of a new and more sustainable culture when it comes to staffing and production on the construction sites.”

Here’s an example from the electrical industry: Before the ban, temporary labour made up almost 50 per cent of the workforce, but now, according to the survey, "there are almost no people from the staffing industry to be seen on the construction site.”

No pure idyll

The report also says the survey indicates an increasing awareness and understanding of the hiring regulations among construction management and project leaders on-site. 

“At the same time, the survey shows that the construction industry in the capital region has not become a ‘pure idyll’ after the ban on staffing agencies was implemented. There are still isolated cases of illegal hiring, where employees from staffing agencies are used on construction sites.

“More concerning, though, are cases where companies operate under ‘false flags’. This refers to former staffing agencies that have changed their business code in the Brønnøysund Register and re-registered as production companies in the construction industry, without meeting the required specifications that apply to construction firms,” the report says. 

In Bergen, Unionen, a trade union under the United Federation of Trade Unions, conducted a survey of over 50 workplaces during the summer and autumn of 2023. The situation there is somewhat different from Oslo and its surrounding areas:

“Despite significant changes in the rules, which now prohibit hiring for temporary work, the improvement in compliance has been only marginal,” according to the findings from Bergen.