Two agency workers have claimed back payment of wages for work carried out on the Norwegian continental shelf. The EFTA Court has now clarified that the Temporary Agency Work Directive and the EEA Agreement also apply to work performed on the Norwegian continental shelf. Below, we take a closer look at this important advisory opinion.
The case concerns two employees of a Norwegian staffing agency who have claimed back payment of salary. The claim relates to a period during which they were hired out to work on board a Norwegian-registered vessel (a multi-purpose vessel) on the Norwegian continental shelf. During this period, the agency workers received lower pay than employees of the user undertaking.
The case was first heard before the district court, which ruled in favour of the employer. The judgment was appealed, and the court of appeal found in favour of the employees’ wage claims. The case has now been further appealed to the Supreme Court.
A central question in the case is whether the Temporary Agency Work Directive, as incorporated into the EEA Agreement and containing the equal treatment rules, applies to work performed on board a vessel in connection with petroleum activities on Norway’s continental shelf.
Before deciding the case, the Supreme Court requested an advisory opinion from the EFTA Court concerning the scope of the EEA Agreement.
The following question was referred to the EFTA Court:
"Is Article 5 of Directive EC of the European Parliament and of the Council of 19 November 2008 on temporary agency work (the Temporary Agency Work Directive) to be interpreted as applying to workers employed by a staffing agency established in an EEA State during the period in which they are assigned to work for an undertaking established in the same EEA State on board of a vessel in connection with petroleum activities on that State's continental shelf?"
The EFTA Court delivered its advisory opinion on 19 February.
The Court first concluded that the Temporary Agency Work Directive applies to seafarers. More decisively, it held that the EEA Agreement applies to petroleum activities carried out on the continental shelf of an EEA State.
The Court based its reasoning on the fact that an EEA State exercises functional and limited sovereignty over its adjacent continental shelf. Work performed on installations or vessels in connection with the exploration and/or exploitation of natural resources must therefore be regarded as work carried out within the territory of that State.
Furthermore, the Court emphasised that applying a different geographical scope to the EU and its Member States on the one hand, and the EFTA States on the other, would be contrary to the principles of equality, reciprocity and balance on which the EEA Agreement is founded. Such a distinction also finds no support in the wording of the EEA Agreement.
The EFTA Court therefore concluded that Article 5 of the Temporary Agency Work Directive must be interpreted as meaning that the equal treatment principle applies to workers employed by a staffing agency in an EEA State when they are assigned to a user undertaking in the same State to perform work on board a vessel engaged in petroleum activities on that State’s continental shelf.
Although the advisory opinion is not formally binding on the Supreme Court, it must be given considerable weight when the Supreme Court renders its final decision.
It will be interesting to follow the further development of the case. If the Supreme Court bases its judgment on the EFTA Court’s opinion, this could have far-reaching consequences for staffing agencies operating in the offshore and petroleum sectors. Such agencies may, in that event, be required to ensure equal treatment of agency workers in line with the user undertaking’s own employees, including for work performed on the continental shelf. This could potentially result in significant changes to pay and working conditions for a large group of workers in the industry.
The opinion may also have implications for the application of other EU directives and related regulations concerning petroleum activities on the Norwegian continental shelf. The full consequences are not yet clear, and it is crucial that industry participants position themselves appropriately at this stage.
We have extensive experience with legal issues related to the petroleum sector and would be pleased to assist in assessing how these developments may affect your business. Please contact us for a no-obligation discussion.