As the labour market in Norway is very good from a European perspective with regards to the employees or independent contractor’s possibility to find work, many people performing the work want to be independent contractors. When the market is good, many persons prefer the freedom of being independent, in addition to the payments that are most often higher than for employees.
During times where the market is not so good, however, or the person performing work tasks becomes ill or in need of other kinds of benefits, we have the court cases related to the distinction between employees and independent contractors.
Many employers also tend to use independent contractors instead of own employees, especially when it comes to jobs within the IT sector or the building / construction sector. When considered independent, the employers free themselves from benefits and especially the strong protection against dismissals of employees. Due to the implementation of the Temporary Agency Work Directive and the very strict conditions for hiring from temporary agencies, we see a trend where the use of independent contractors are even more interesting for employers than before.
Recent Case Law
In 2013, the Norwegian Supreme Court announced two verdicts regarding the difference between an “employee” and an “independent contractor”. The first judgment was related to a municipal “support contact” for a family, while the other case was related to a foster mother.
In the two cases the “support contact” had made a claim for holiday pay. The foster mother, however, had made a claim for sick pay. In both cases, they had contracts with a municipality as “independent contractors”. In the first judgment, the “support contact” was considered to be an “employee” with the right to holiday pay. In the second judgment, the foster mother was considered to be a real “independent contractor”.
The Supreme Court mentions 7 points to take into consideration when defining whether or not a person is an “employee”. The Court also states that these points must be reviewed on a discretionary basis from case to case:
- the duty to perform the work personally and not use substitutes
- the duty to subordinate and follow the employers instructions and control
- the employer holds the work premises, equipment etc.
- the employer is responsible for the result of the work performed
- the payment is executed by some kind of salary
- the contractual relationship is stable, with an agreed period of notice
- the work is mainly performed for 1 single principal
- when there is doubt, the answer must come from a discretionary review where all points are taken into consideration.
In addition to these 7 points, the Supreme Court based their decision on whether practical circumstances should indicate that the person was an employee or an independent contractor. In the last judgment regarding the foster mother, the majority of the judges regarded foster care as such a distinctly different relationship as a normal employment relationship, as the core tasks of foster care is to take a foster child into their home to, as much as possible, become part of the foster mother’s own family.
In 2016, the Supreme Court assessed the notion of “employee” once again. The question was whether a person acting as a reliever for a family with a boy with Downs syndrome and also acted as the child’s support person pursuant to the Health and Care Services Act, was considered an employee in the municipality in which she resided. The Supreme Court used the 7 points to distinguish between employee and independent contractor. The Supreme Court found that the point on duty to subordinate and follow the employer’s instruction and control was pivotal in the assessment. Even though actual instructions were not given, it was sufficient to state subordination for the person at hand. Other factors that could indicate that she was an independent contractor were found not to change the overall assessment, which concluded that she was an employee.