Norway - Euro Arbeidskraft NUF: Latvian workers dressed up as self employed
At the end of 2006, 12 Latvian building workers, who were working for a company named Euro Arbeidskraft NUF (EA NUF), came to Norway as posted workers from the Latvian company SIA LatNord. This company had a postbox address in Latvia and had never been registered in Norway. The Norwegian company, EA NUF, was a subsidiary company for Euro Arbeidskraft ltd, registered by the address Stockport, UK. Neither of the companies in the UK or Latvia had any real activity in the country of origin.
The workers had been working at the building project Rolfsbukta for one of the biggest building contractors in Norway, PEAB. The contractor above SIA LatNord was NC Nye Collins Entreprenoer, but Sia LatNord was hiring out the workers to another company, Carpenter Per Amundsen.
In early 2007, all the employees who were working for SIA LatNord in Norway got a message from the company's contact person in Norway, Glen Skamsar, that they would hereafter be registered as self-employed. The same person was a holder in both EA NUF and EA ltd. The employees received some papers that they had to fill out and sign. These papers were written in Norwegian, and they had to sign, even without understanding the content. When they inquired about the consequences by not signing these papers, the answer from the employer was that they would have to go back to Latvia.
The documents were registration forms for self employment. In addition to this, an agreement between EA NUF and every single employee was signed. This document was also written in Norwegian, and the employees later testified that they signed the agreement without understanding the content. When their trade union, Oslo Building Worker’s Union, later translated this agreement to the workers, the content came as a quite big surprise for them. It wasn’t the job contract they thought it was, but an agreement about contracting. Nothing else had been changed. The main contractor, the working place and their job duties were still the same, but the workers were no longer employees, but self employed subcontractors.
From now on, the workers were getting invoices instead of paychecks. These invoices were based on the time sheets from the employees, but were created by the employer. First it was approximately 15 Euros per hour plus value added taxes, later adjusted to 17 Euros per hour plus value added taxes. However the employees had confirmed that this was net payment, and the value added taxes were never paid to them. The employer, Glenn Skamsar, had promised to take care of everything with regard to tax payments.
When the workers joined the union in October 2007, they had a significant salary claim against EA NUF, including overtime and holiday money. The union soon discovered that there were no taxes paid, and informed them that the tax office could come at any time with a claim against them about payment of value added tax. The salary claim for all twelve workers was approximately 145 000 Euros. The claim was sent to the employer, who rejected it. His position was that there had never been any employment relationship, and that they had always been aware of that.
In early 2008, the union sent a letter about the situation to the employer and his contractors. As a consequence, Euro Arbeidskraft was thrown out from PEABs building site Rolfsbukta. The workers terminated the agreement with EA NUF 19th of February. At the same day they got an offer from Carpenter Per Amundsen about completing the works in Rolfsbukta. The workers accepted this offer, as they believed that they would get regular contracts for this job. However, when they arrived to the building place, they were again asked to sign invoices as before. They called the union for advice, and three union representatives came to the building site and held a meeting with them. The union advised the workers to go on strike – pack up their tools and leave. PEAB was informed that the workers would leave the building site, as they had no agreement with or obligations toward any of companies on the site. The workers drove with the union representatives to the union offices, were they sat and waited. One hour later, the workers got an offer from Carpenter Per Amundsen about regular employment.
This, however, was only the beginning of a long and painful process. The most important question to solve was whether these workers should be viewed as employees or self employed. The union lost the first case at the District court, but the Court of appeal decided that EA NUF had been operating with labour contracting, and that the workers were to be viewed as employees. This conviction was crucial for several reasons:
- It made it possible for the union to require the minimum wages based on the generalized, statutory minimum wages for building sites in Norway.
- It drove Euro Arbeidskraft NUF and Euro Arbeidskraft ltd into bankruptcy, and the employees got their claims covered by the Norwegian state wage guarantee fund.
- It made it possible to overturn the Tax Office’s claim towards the workers, when they were claimed for paying value added taxes.
- The case helped to pave the way for several similar cases.