Contractor blues

Over seven years, a church hired a musician as a contractor annually to play at different concerts. Approximately 500 concerts were held each year as a tourist attraction. The company had hired the same group of 12 to 15 musicians each year, including the contractor. He participated in 95 to 168 concerts annually. 

The company assigned the contractor and his colleagues to shifts, hired new musicians, and assessed the concert's level and content.

During the corona pandemic, the number of concerts was significantly reduced. Because of this, the contractor wanted to re-negotiate the contractor agreement to limit his financial loss. When negotiations failed, he wanted to be considered as an employee rather than a contractor.

The company did not stay in tune

The court concluded that he was an employee. The reason was that the contractor personally had a duty to work and that his work was under the management and control of the company.

Clearly, the contractor had been engaged because of his personal qualities and experience. He was not free to replace his own efforts with someone else, and he was assigned specific shifts. The company set the theme, music, and dates for the concerts. Further, it was ultimately the company that was responsible for the quality of the concerts for the customers – not the contractor. Because of this, the contractor was entitled to back payment of salary, pension, and holiday allowance.

The company appealed the decision but was only allowed to appeal the question of pension. As such, the contractor was in fact an employee.

IUNO’s opinion

This case illustrates how qualifying an employee incorrectly as a contractor can have significant consequences. The question has also received increased focus, and new rules are implemented or on their way. You can read about the newly implemented rules on the legal difference between contractors and agency workers here and the upcoming rules on contractors and employees here.

IUNO recommends that companies make a case-by-case assessment of the different roles. Companies should also stay updated on the legal differences between the roles in Norwegian working life. A mistake can cost companies in terms of back payment of salary, holiday allowance, and pension.

[The Hålogaland Court of Appeal's judgement of 8 November 2022 in case LH-2022-44364]