Direct Request (CEACR) - adopted 1999, published 88th ILC session (2000)

Employment Promotion and Protection against Unemployment Convention, 1988 (No. 168) - Norway (Ratification: 1990)

With reference to its previous comments, the Committee notes the information provided by the Government in its report on the Convention and the 32nd annual report on the application of the European Code of Social Security, as well as the English translation of the relevant provisions of the National Insurance Act, the Regulations on Unemployment Benefit and the current guidelines for the employment market service issued by the Directorate of Labour supplied by the Government. It would like the Government to furnish additional information on the following points:

1. Article 10, paragraph 1, in relation to Article 21 of the Convention. In its previous comments, the Committee noted that the new National Insurance Act of 28 February 1997 obliged a "genuine jobseeker" to take up any employment offered to him by the employment market service, irrespective in particular of its level of remuneration, location in Norway and of whether it was a full-time or part-time job (section 4-5), and provided for the withdrawal of unemployment benefit from eight weeks to six months in cases where the insured person refused, "without reasonable grounds", to accept an offer of such employment (section 4-20), as well as for the withdrawal of the entitlement to the benefit for as long as the insured person did not fulfil the conditions of being a genuine jobseeker (section 4-21). The Committee observed that, by virtue of these changes in the National Insurance Act, the previously applicable rule by which a person could be disqualified from receiving unemployment benefit for having refused "suitable employment" was replaced by the apparently more restrictive concept of withdrawal of the benefit for refusing employment offered "without reasonable grounds". To assess the practical effect of the new legislation, the Committee asked the Government to supply a copy of the guidelines followed by the employment market service in making offers of employment to an unemployed person and in determining whether such person has a reasonable ground for refusing it, indicating in particular to what extent account was being taken in practice of such considerations as skills, qualifications, acquired experience and length of service in the former occupation, as well as the personal and family situation of the person concerned in case the job offered implied a change of residence. It also asked for the statistical information on the number of cases in which unemployment benefit was suspended due to refusal to accept the job offered for the whole period since the entry into force of the new legislation on 1 January 1997.

The Committee notes from the statistics supplied by the Government that the number of cases in which unemployment benefit was suspended due to refusal to accept the job offered by the employment market service actually decreased in 1998 (2,202 cases) in comparison with 1997 (2,349 cases) when the new legislation was first introduced, and showed a further downward tendency in the first quarter of 1999. As explained by the Government, this trend coincided with the period of lowering unemployment (the unemployment rate in Norway has decreased from 3.3 per cent in 1997 to 2.4 per cent in 1998) during which, compared to the periods of high unemployment, the practice of imposing sanctions on recipients of unemployment benefit who refuse to take jobs offered, is somewhat stricter. The reason for this is that during periods of low unemployment when the demand for labour is strong and the employment market service has more jobs to place people into, it may be necessary for it to fill jobs that are not very suitable to the unemployed people to whom they are offered. Nevertheless, the Government considers that current legislation permitting withdrawal of unemployment benefit for refusing employment "without reasonable grounds" is less restrictive than the old one referring to "suitable employment", since it opens the possibility to take into account in favour of the recipient matters that relate to family and care situations rather than the job. It refers in particular to sections G.5 and G.7 of the guidelines issued by the Directorate of Labour which lay down exceptions from the obligation to take full-time work and the requirement of full geographical mobility of unemployed persons based on such criteria as impaired health of the jobseeker, care of small children, care, nursing or sole responsibility for other close members of the family, the need for the child to stay in the same school, and the like. The Committee observes that such criteria are in line with those normally used in assessing the suitability of employment as far as the personal and family situation of the unemployed person is concerned.

As regards assessing the suitability of employment offered on the basis of criteria which relate to skills, qualifications, acquired experience and length of service in the former occupation, the Government states that qualifications and individual possibilities to obtain employment will be considered by the Labour Market Administration during the initial conversation with the jobseeker in cooperation with him or her, with the necessary assistance offered. Jobseekers are then encouraged to be active in their jobseeking process in order to find work without further assistance from the Labour Market Administration, if possible. If they have difficulty in finding work or are uncertain about their possibilities, they are offered further guidance, either individually or in groups, and after three months are followed up by the employment office. In all contacts with the jobseekers the importance of their own engagement and activity in obtaining a job suited to their theoretical and practical competence and personal situation is stressed. And in each individual case an assessment of the person's skills, qualifications, acquired experience and length of service in former occupation, as well as his or her personal and family situation, is made. However, the Government specifies that, when it is decided whether to withdraw his or her benefit for a limited period of time or not, no account is being taken of the person's length of service in the former occupation or of the acquired experience, and there are no formal guidelines to this effect. Moreover, if the person in question has been unemployed for a long time, this may be considered a reason for applying the principles that are in force in a stricter way than otherwise. In its report on the Code, the Government adds that, in practice, a standard for what is suitable employment is set by the employer himself when reporting a vacancy and accepting the person offered by the employment service; any public employment service, working to place unemployed persons into employmet, must take these employer's considerations into account.

The Committee notes this information. It agrees with the Government that supplying workers meeting the standard of suitability established by the employer for the job offered is an important function of the public employment service in regulating the labour market from the supply side. The effectiveness of the employment market service in this respect is confirmed by the lowering rate of unemployment in Norway in recent years. However, in matching jobseekers with vacancies, the public employment service is also called to fulfil the not less important task of ensuring that, on the demand side, the jobs offered are of such quality that corresponds to the professional skills and qualifications of the prospective jobseekers. From this perspective, it appears from the explanations given by the Government that, under the new legislation, the task of finding quality jobs suited to the theoretical and practical competence of the jobseekers has been shifted from the employment market service on to the jobseekers themselves to become primarily their own responsibility. Disregard by the employment market service of the jobseeker's competence in judging the reasonableness of his or her refusal to accept the employment offered might result in compelling the jobseeker concerned to take up a lower quality job unsuitable to his qualifications, but which the employment service has to fill, particularly during periods of low unemployment. Nationwide, if skilled workers, disregarding their higher qualifications, were to be systematically placed in less skilled jobs, such labour market policy would inevitably lead to a lowering of the skills level of the national workforce and the substantial reduction of the employment opportunities for unskilled workers at the low end, pushing them into long-term unemployment and exclusion. Thus, favouring the supply-side over the demand-side approach in regulating the labour market, orienting the employment market service to providing workers suitable for jobs rather than jobs suitable for workers, would in the long run lead to labour market imbalances and inefficiencies and to situations of underutilization of the human resources potential. On the contrary, in the logic of the Convention which seeks to strike a balance between supply and demand in the labour market in terms of quality and not only quantity of employment, such situations are to be prevented through the systematic application by the public employment service of the concept of suitable employment in its placement policies -- a concept which is no more used in the current Norwegian legislation on unemployment insurance.

In this respect, the Committee notes that, according to section G.4 of the guidelines of the Directorate of Labour, in order to be regarded as a genuine jobseeker, an applicant for unemployment benefits must as a general rule be willing and able to accept any work that is remunerated according to a collective wage agreement or a local custom. Section G.4.1 stipulates that the obligation to take any work means that applicants for employment cannot make reservations as regards the type of occupation they will work in and must be willing to accept any work they are physically and mentally fit for, even in occupations for which they are not trained or in which they have no previous experience. It is the employer's assessment of the applicant's qualifications which is decisive. Applicants for employment must also be willing to take up work at a lower rate of pay than their previous income and, in special cases, even lower than their daily cash benefit. The Committee further notes from the explanations provided by the Government that while skill, qualification, acquired experience and length of service in former occupation may be taken into consideration in negotiations between the jobseeker concerned and the Labour Market Administration, these criteria for assessing the suitability of employment offered are not formally taken into account when the decision on the withdrawal of the benefit is taken following the jobseeker's refusal to accept the employment offered on these grounds. The Committee recalls in this respect that in its previous report, in explaining the purpose of the regulations to be worked out under the new legislation which no longer used the concept of "suitable employment", the Government emphasized that they aimed at providing the best possible motivation for the unemployed to get ordinary jobs.

In this situation, the Committee cannot but observe that, apart from the few exceptions provided, the new provisions of the National Insurance Act referred to above and the guidelines for their practical implementation are likely to have the effect of legally compelling unemployed persons, under the threat of the withdrawal of the entitlement to the benefit, to take up any ordinary job for which they are physically and mentally fit, notwithstanding their professional skills, qualifications, acquired experience and length of service in former occupation. The Committee would therefore once again like to draw the Government's attention to the fact that, according to the definition of the contingency contained in Article 10, paragraph 1, the aim of the Convention consists precisely of offering unemployed persons protection during the initial period of unemployment from the obligation to take up any job which is not suitable, so as to leave open the possibility to provide them with suitable employment ensuring the most effective utilization of their human resources potential for the benefit of the workers concerned and the society as a whole. In line with this aim of the Convention, Article 21, paragraph 1, specifies that the entitlement to the benefit in the case of full unemployment may be withdrawn or suspended only when the person concerned refuses to accept suitable employment, taking into account, under prescribed conditions and to an appropriate extent, the criteria of the suitability of employment laid down in paragraph 2 of this Article and, in particular, of the length of service in the former occupation and the acquired experience. In the light of these provisions of the Convention, the Committee would appreciate if the Government would reconsider the question with a view to ensuring that, in all cases covered by Article 10, paragraph 1, of the Convention in relation to Article 21, unemployment benefit is paid at least during the initial duration of unemployment specified in Article 19, paragraph 2(a). The ommittee would also like the Government to continue to supply in its future reports the statistical information on the number of cases in which unemployment benefit was suspended due to refusal to accept the job offered by the employment market service.

2. Article 20. In its previous comments, the Committee asked the Government to indicate how the provisions of sections 4-5 and 4-20 of the new National Insurance Act which subject entitlement to unemployment benefit to the condition that unemployed persons should seek income from the creation of self-employment, are being applied in practice, taking into account that such condition is not mentioned among the grounds for the refusal, withdrawal or suspension of benefit listed in Article 20 of the Convention. In reply, the Government indicates that these provisions very seldom lead to any withdrawal or suspension of unemployment benefit. It refers to the abovementioned guidelines which recognize that it is often difficult to decide if a recipient of unemployment benefit is in a position to gain income from the creation of self-employment. Therefore, according to the Government, it is recommended to suspend unemployment benefit in these cases only after close consideration.

The Committee notes this information. It recalls that section 4-5 of the National Insurance Act defines a genuine jobseeker as a person who is willing, among other things, "to generate income from the creation of self-employment", while section 4-21 provides for the withdrawal of the entitlement to the daily cash benefit for as long as the insured person stops fulfilling this condition of being a genuine jobseeker. It further notes that section 4-6 authorizes payment of the daily cash benefit for a period of nine months while the jobseeker is planning and creating a self-employed activity, while section 4-20 provides for the withdrawal of the entitlement to the daily cash benefit for a specified period in the event that the insured person, without any reasonable grounds, refuses to seek income from the creation of a self-employed activity during the benefit period. As regards the way these provisions of the law are to be applied in practice by the employment market service, the Committee notes that sections G.8 and P.5.3 of the guidelines highlight an obligation of jobseekers to do their utmost to obtain the necessary income; recipients of daily cash benefit are not only obliged to try to earn an income through paid work in someone else's service, but must also do what they can to earn an income through self-employment. In this connection section G.8 mentions in particular the situation of people who work partly as employees in someone else's service and partly as self-employed, stating that if they become unemployed in someone else's service and have the possibility of expanding their work as self-employed persons, they must make use of this opportunity instead of receiving daily cash benefits. However, section P.5.3 of the guidelines recognizes that it is often difficult to determine whether a recipient of daily cash benefit is able to earn money through self-employment and whether his right to benefit must be discontinued for that reason, and recommends to exercise caution in reaching decisions to discontinue benefits on this basis.

The Committee observes from these provisions that, notwithstanding any recommendation for caution in their practical application, the aim of the law appears to consist in compelling unemployed persons who have the capacity of doing so, to move from formal employment into self-employment, under the threat of the withdrawal of the unemployment benefit at the discretion of the employment market service officials. By forcing such unemployed persons into self-employment the employment market service would automatically push them outside the scope of the unemployment protection scheme, taking into account that under section 4-3 of the National Insurance Act unemployment benefit does not extend to self-employed persons. This might lead to a rather paradoxical situation where the institute of unemployment benefit would actually deprive the persons concerned of the protection against unemployment in future in case their self-employment activity fails. The Committee considers that, to the extent that this may be the case, such method of providing unemployment benefit could not be deemed compatible with the Convention, which, on the contrary, aims at extending unemployment protection progressively to additional categories of persons by, inter alia, bringing previously self-employed persons under the coverage of the unemployment protection scheme (Article 26). As designed by the Convention, unemployment benefit is intended to serve as a transitional wage replacement to help unemployed persons to return to suitable employment carrying full rights to unemployment protection and other social security benefits (Articles 10 and 14), but not to direct them into self-employment where they are likely to lose any of those rights. Read together with these provisions of the Convention, Article 20 therefore would not permit to withdraw unemployment benefit on the ground that the person concerned refused to earn income from self-employment instead of from suitable employment.

The Committee fully understands that, besides formal employment, the development of self-employment, micro-enterprises and entrepreneurship constitute in themselves important elements of an active policy designed to promote full and productive employment in the broadest sense. It recalls however that the employment to be promoted by such policy under Article 7 of the Convention using all appropriate means, including social security, should also be freely chosen. By implication, the principle of the free choice of employment should also extend to such other forms of productive activities which society deems necessary to promote through its labour market policy. Furthermore, under Article 19, paragraphs 1 and 5, of the Convention, the right to freely chosen employment of unemployed persons is to be safeguarded throughout the contingency, even when their unemployment continues beyond the initial period of benefit and the persons concerned become the subject of special employment assistance programmes for the long-term unemployed. From this perspective, the Committee wishes to emphasize that the element of compulsion present in the abovementioned provisions of the National Insurance Act, exercised through the threat of the withdrawal of the entitlement to unemployment benefit in case of refusal to earn income from self-employment, can be hardly reconciled with the requirement that social security means in general and the methods of providing unemployment benefit in particular should contribute to the promotion of freely chosen employment (Articles 7 and 2 of the Convention). The Committee therefore expresses the hope that the Government will give thorough consideration to this question. In the meantime, it is asked to provide detailed statistics on the number of cases in which unemployment benefit was withdrawn in application of the corresponding provisions of sections 4-5 and 4-20 of the National Insurance Act, the number of the appeals lodged by insured persons in these cases, as well as examples of the decisions taken by the employment market service and the appeal bodies.

3. Article 20(f). In its previous comments concerning the requirement of sections 4-5 and 4-20 of the National Insurance Act which subjects the entitlement to unemployment benefit to participation in labour market programmes, the Committee recalled that, according to Article 20(f) of the Convention, refusal or withdrawal of benefit is authorized only in cases where the person concerned has failed without just cause to use the facilities available for placement, vocational guidance, training, retraining or redeployment in suitable work. Taking into account that participation in labour market programmes did not dispense unemployed persons of the obligation to take up an ordinary job, the Committee asked the Government to explain in detail the rules and criteria applied in offering labour market programmes and in assessing the reasonableness of the ground in case participation in them is refused by the unemployed person concerned, particularly on the ground of their unsuitability in the light of his or her education, qualifications, length of service in former occupation and acquired experience.

The Committee thanks the Government for the detailed explanations provided, according to which the same rules and criteria that are applied when it comes to accepting job offers also apply to participating in labour market programmes. If the person in question is physically and mentally qualified for the programme, he or she has no acceptable reason not to accept it. This means that if the person is asked to participate in the programme and refuses to do so, or discontinues his or her participation in the programme, unemployment benefit will normally be suspended for a limited period of time. Taking into account that, according to the Government, no formal procedures have been laid down for jobseekers who refuse to accept the labour market programme on the ground of its unsuitability in light of his or her education, qualifications, length of service in former occupation and acquired experience, the Committee would like the Government to refer to the comments it has formulated in this respect under point 1 above.

4. Article 26. The Committee notes that the Government's report contains no reply to its previous comments concerning the application of this Article of the Convention. It therefore hopes that the Government will not fail to include in its next report full information on the terms and conditions under which social assistance is paid by municipalities to the persons in need, particularly those belonging to category (a) (young persons who have completed their vocational training), and to supply the text of the corresponding legal provisions. In addition, taking into account that, under sections 4-5 and 4-20 of the National Insurance Act, the entitlement to unemployment benefit is subjected to the condition that unemployed persons should seek income from the creation of self-employment, the Committee would like to receive information on the measures taken or contemplated to extend protection under Article 26 of the Convention to the previously self-employed persons (category (j)).

5. Finally, the Committee once again asks the Government to provide the most recent consolidated version of the Act respecting measures to promote employment, No. 9 of 27 June 1947, together with an English translation, if available.