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    Employment and labour law in Norway

    Labour law

    1.  INTRODUCTORY REMARKS
    1.1  Introduction

    Norwegian employment law (also called labor or labour law) is based on the principle of contractual freedom, though with statutory regulation in certain areas to ensure worker protection. Statutory regulation follows first and foremost from legislation – mainly the Working Environment Act – though it may also follow from collective bargaining agreements, given that such agreements apply to the employment relationship.

    1.2  Norwegian employment law – some key traits

    1. Employers must as a main rule attract labour through permanent employment, as legislation limits when employers may employ workers on a temporary basis or when employers may attract labour through other means (independent contractors, hiring in from temporary work agencies etc.)
    2. Statutory minimum wage is confined to certain sectors such as the building industry, cleaning industry, ship building industry, agriculture and horticulture, hotels, restaurants and catering and freight and passenger transport.
    3. The Working Environment Act contains strict rules when it comes to working time, holiday, overtime and overtime pay. The regulation goes further in some areas than what follows from the Working Time Directive (2003/88/EC) and other relevant EU-regulation. Compliance with working time etc. is monitored by the Norwegian Labour Inspection Authority. Remedies in case of non-compliance are orders, coercive fines, halting of work or administrative fines or penal provisions.
    4. The threshold for dismissal is high and is cause-based. Dismissal with notice requires a just cause, and summary dismissal requires a serious breach of contract. There are furthermore strict procedural rules that the employer must adhere to in the dismissal process. Those include requirements as to the form of the dismissal letter and a mandatory consolidation meeting before the decision of dismissal.
    5. Even though collective bargaining agreements are entered into on a voluntary basis, many employers and employees are bound by such agreements.

    1.3  Sources of regulation

    Most employment relationships in Norway are governed by the Working Environment Act, with the main exceptions being employment relationships within central government (governed by the Civil Servant Act) and employment relationships onboard ships (regulated by the Ship Labour Act).

    Certain elements of the employment relationship are regulated by other acts, such as the Personal Data Act, the National Insurance Act, the Act of General application of Collective agreements etc, the Holidays Act, the Industrial Disputes Act and the Civil Service Disputes Act.

    A secondary source of regulation is different collective agreements between employer or employer organizations on one side and unions on the other side. Collective agreements are entered into or renegotiated voluntarily by the parties, though one party may exert pressure through industrial dispute means such as strikes, to force through a collective agreement.

    A third source of Norwegian employment regulation is EU-regulation. Norway, as a part of The European Economic Area (EEA), has implemented most EU-regulation as part of Norwegian law. Examples include, the Posted Workers Directive (96/71/EC), the Working Time Directive (2003/88/EC), the Collective Redundancies Directive (98/59/EC), the Temporary Work Agency Directive (2008/104/EC), the Directive of the Transfer of Undertakings (2001/23/EC) and the Directive of General Data Protection Regulation (GDPR) (EU 2016/679).

    1.4  Application of Norwegian Employment regulation

    Norwegian employment law applies to employment relationship with a sufficiently close connection to Norway.

    Disputes in international employment relationships may thus only be brought before Norwegian courts if the facts of the case have a sufficiently strong connection to Norway. Such connections would presumably be established if the employer is registered in Norway or if the employee’s place of work is in Norway.

    Norwegian case law has established the rule of closest connection when deciding the applicable law. Relevant criteria in the assessment is place of work, the wording and language of the employment contract, in which country the employment relationship is entered into, as well as the parties’ behaviour during the employment relationship.

    1.5  Collective agreements

    An employer is bound by a collective agreement upon entering into such with a union or through membership in an employer’s association bound by such agreements. The application of the collective agreement is primarily confined to the union members amongst the employees.

    Even though collective agreements are voluntarily established, such agreements are often reached through pressure from Unions through strike or other means of labour dispute.

    Collective agreements often contain provisions on working time, pay, leave of absence (with or without pay), worker participation and co-determination. Legal disputes concerning collective agreements, rights which arise from such agreements or labour dispute means are resolved by the Labour Court.

    2.  CONSIDERATIONS BEFORE EMPLOYMENT

    2.1  Employer obligations

    All employers are obligated to register in the NAV State Register of Employers and Employees. The register contains information relating to employment arrangements and provide NAV with information needed for certain of its tasks.

    Employers are required to provide occupational injury insurance for its employees and occupational pension for employees apart from employees who work 20 % part-time or less.  Employers must furthermore pay national insurance contributions. The amount is usually 14,1 % calculated based on pay. The percentage is lower in certain parts of Norway.

    For foreign companies establishing employment relationships with basis in Norway, it might presuppose establishing a branch (so-called NUF) or alternatively a separate Norwegian company.

    2.2  Foreign employees

    Foreign employees must be registered in Norway in order to perform assignments here.

    • Employees from countries outside EU/EEA must obtain residence permits before gaining entry.
    • Employees from EU/EEA must register themselves.
    • For so-called posted workers; workers sent by their employers to Norway for time-limited work assignments, special provisions apply.
    • INPAT

    Foreign workers would generally be entitled to the same social benefits, including 100 % sick pay and accruement of pension rights, as other employees.

    3.  CONSIDERATIONS UPON EMPLOYMENT

    3.1  Permanent or temporary employment

    Even though employees, as a main rule, must be employed on a permanent basis, temporary employment may be agreed upon,

    • for work of temporary nature,
    • for work as a temporary replacement for another person or persons
    • for work as a trainee
    • with participant in labour market schemes under auspices of or in cooperation with NAV
    • with athletes, trainers, referees or other leaders within organized sports,
    • for a maximum period of twelve months. Such agreements may apply to a maximum of 15 per cent of the employees of the undertaking, rounded up, but temporary appointment may be agreed upon with at least one employee.

    Employees who have been temporary employed three consecutive years in the above-mentioned exceptions or for four consecutive years, given that the employment is based on work of a temporary nature, shall be deemed as permanently employed. The same applies if the employment relationship, for other reasons, no longer can be grounded in the listed exceptions.

    Temporary engaged employees who, owing to circumstances relating to the undertaking in not offered continued employment, have a preferential right to new appointment at the same undertaking, unless the vacant post is one for which the employee is not qualified.

    3.2  Fulltime or part-time employment

    Unlike what is the case with temporary employment, there are no limitations on whether an employee is to be employed fulltime or part-time.

    Part time employees would nevertheless have a preferential right to an extended post, rather than for the employer to create a new appointment, given that the part-time employee is qualified. Part-time employees would furthermore generally have a preferential right to a post equivalent to actual working hours, given that the employee, within the previous twelve months, has regularly worked in excess to agreed working hours.

    3.3  Alternatives to employment

    An employer may attract labour through other means than employment, for instance through independent contractors or temporary work agencies. There are nevertheless restrictions.

    An employer may hire labour from a temporary work agency to the same extent that there is access to temporary employment, see item 3.1 above. Norway has furthermore implemented the EC Temporary Agency Work Directive (2008/104/EC), meaning that Norwegian employers (and the temporary work agency) must adhere to the same requirements as follows from the directive.

    Labour may also be hired from undertakings not viewed as temporary work agencies, given that;

    • the hired worker is permanently employed in the undertaking hiring out,
    • no more than 50 percent of the employees in the undertaking is hired out,
    • hiring out takes place within the main activity areas in the undertaking, and
    • hiring of labour is discussed with worker representatives in compliance with the relevant provisions.

    Labour may also be supplied through independent contractors, though the contractor may be viewed to in fact be employed due to a concrete assessment of the contractual relationship between the parties. Relevant criteria in the assessment would be;

    • whether the person subordinates himself to the employer’s management prerogative,
    • if the person must perform the tasks himself or if tasks can be delegated to others,
    • if the employers supply premises, machinery tools and other auxiliaries for the performance of tasks,
    • form, wording and content of the contract and the contractual relationship, and
    • if the independent contractors also work for others or just for one undertaking.

    3.4  Job ads and interviews

    Employers cannot, among other things, advertise or request information concerning political views, membership in unions, certain health conditions and of circumstances which directly or indirectly would be in breach of anti-discrimination legislation.

    Employer must pay assiduous attention to the wording of job ads as such advertisements may also constitute part of the contractual relationship between the parties.

    3.5  Whom to employ

    In the private sector employers generally have freedom to choose whom to employ as long as employment is not in breach of anti-discrimination legislation.

    Employers in the public sector do not have the same freedom as they must employ the person who is viewed as best qualified for the position (the so-called qualification principle).

    3.6  The employment contract

    Employers are obligated to put terms in the employment relationship in writing as part of a written employment contract. The contract must state the factors of major significance for the employment relationship including the factors laid out in the Working Environment Act Section 4-6.

    The terms in the employment may constitute rights for the employee, thus limiting the employer’s managerial prerogative.

    3.7  Special clauses in the employment contract

    The employment contract may include special clauses such as non-compete clauses, non-solicitation clauses, confidentiality clauses and clauses of compulsory time of employment.

    Especially non-compete clauses are strictly regulated with employers generally being obliged to pay full salary up to a certain threshold for the duration of the non-compete clause. The legality of clauses of compulsory time of employment must be viewed on a case-to-case basis. Generally, such clauses would presuppose a bonus (for instance stay on fee for management) or be part of an employer financed education.

    3.8  The CEO

    It can be agreed upon that the CEO relinquish protection from later dismissal in exchange for predetermined compensation, or that disputes in connection with termination of the employment relationship is settled by means of arbitration.

    The CEO can furthermore waiver the right to compensation as a part of a non-compete clause. The CEO is lastly not subject to most of the working time restrictions as laid out in Chapter 10 in the Working Environment Act.

    4.  WORKING TIME

    4.1   Working time

    By working time is meant the time when the employee is at the disposal of the employer for performance of tasks according to the employment relationship.

    The time employees may work is limited by detailed provisions in chapter 10 of the Working Environment Act. The chapter is partly based on the EC Working Time Directive. Most employees, with the exception of employees in leading or independent positions, have a right to overtime payment.

    Chapter 10 also contains provisions on flexible working hours, calculation of working time based on a fixed average for a certain period, work during nighttime and weekends as well as daily and weekly working time, overtime, overtime pay and time off in lieu.

    Many collective bargaining agreements contain provisions on working time.

    4.2  Leisure and holiday

    Time not considered working time is deemed leisure, where the employer’s managerial prerogative is more limited.

    Workers are entitled to 25 working days holiday with employees at the age of 60 or more being entitled to an extra 6 working days of holiday.

    The employee is entitled to three weeks of holiday in the main holiday period from 1 June till 30 September.

    Holiday pay generally constitute 10.2 percent of wages paid during the year before the holiday is taken out. For employees at the age of 60 or more, the percentage is generally 12 percent of wages paid.

    It is possible to transfer up to two weeks of holiday to the following year. Holidays must be taken out and cannot be compensated by other means except in connection with the termination of the employment relationship.

    5.  WAGES

    5.1  The right to wages

    Outside certain sectors, including those named in item 1.2 above, there is no minimum wage in Norway. Statutory regulation with regards to wage may nevertheless follow from collective bargaining agreements.

    The Working Environment Act contains detailed provisions regarding the payment of salary and when deduction in pay can be made.

    5.2  Payment during sick leave

    Employees have a right to full pay (sickness benefits) during sick leave, both in the employer financed period and for the period thereafter, when sick benefits are paid by the state (NAV). Sick benefits are restricted to one year and presuppose sickness or other medical issue which hinder the performance of work.

    An employee may usually for the first three days give self-notice of sick leave. Thereafter the employee must provide a doctor’s certificate.

    5.3  Payment during parental leave

    Payment during parental leave is paid by NAV up to 6G (6 times the national insurance base). Payments exceeding 6G must be paid by the employer, either through an agreement between the parties or as part of a collective bargaining agreement.

    6.  LEAVE OF ABSENCE

    The Working Environment Act provide detailed provisions as to when employees have a right to leave of absence with or without pay. Provisions on leave of absence also follow from many collective bargaining agreements.

    7.  MINIMUM REQUIREMENTS FOR THE WORKING ENVIRONMENT

    7.1  The duty to ensure a fully satisfactory physical and psychological working environment

    The employer has a duty to ensure a fully satisfactory physical and psychological working environment (HSE).

    The Working Environment Act and secondary laws in connection with the act provide detailed mandatory provision to ensure that the different aspects of the physical and psychological working environment are fully satisfactory.

    The Labour Inspection Authority supervise compliance with the HSE and can issue orders, administrative fines, coercive fines, halting of work or other remedies in case of non-compliance. In case of serious breach, penal provisions may also be applicable.

    7.2  The employee’s right to notify censurable conditions at the undertaking

    Employees and workers hired from temporary work agencies have a right to notify censurable conditions in the undertaking.  A condition may be viewed as censurable if it is illegal, if it is in breach of injunctions or prohibitions, if it is in breach of the employer’s ethical guidelines or in breach of more general ethical standards which enjoy broad support in society.

    The employer has a duty to produce procedures for notifications in accordance with the Working Environment Act Section 2 A-3 (5) and must furthermore refrain from any retaliation in connection with notifications. In case of retaliation the employee may seek compensation. Furthermore, the employer will have the burden of proof that retaliation has not occurred if the employee submits information that gives reason to believe that retaliation has taken place.

    The employee must proceed in a responsible way when notifying.

    8.  CONTROL MEASURES

    An employer may to some extent implement so-called control measures against an employee or a defined group of employees, given that certain conditions are met. Examples of control measures are access control, surveillance (for instance video, recording or GPS), email inspection, drug testing and time recording.

    Control measures presuppose that the measure may be objectively justified by circumstances relating to the undertaking and that it does not involve undue strain on the employees, who are subject to the measure.

    When it comes to the obtainment of health information, both for job applicants and for employees during the employment relationship, the Working Environment Act as well as other relevant legislation provide strict regulations.

    The same applies to access emails of employees. Secondary legislation in compliance with the Working Environment Act and Personal Data Act provide strict procedural rules, including demand for notification before and after any processing of personal data. Furthermore, access requires that the employer has justifiable reasons to believe that access is considered necessary for daily operation or legitimate business interests or when there is reason to believe the employee is in gross breach of duty.

    Breach of provisions when it comes to the accessing of email could i.a. trigger fines from the Norwegian Data Protection Authority. The information might furthermore be excluded from evidence in case of court proceedings.

    9.  PERSONAL DATA AND GDPR

    On 25 May 2018, the General Data Protection Regulation (GDPR) (EU 2016/679) entered into applicability in the EU and on 20 July 2018 it was implemented in Norway as part of the EEA agreement.

    The same provisions with regards to GDPR thus apply to employment relationships in Norway as in other member states within the EU.

    GDPR legislation provides detailed legislation on the threshold for processing of personal data, accountability on handling personal data, personal rights to individuals whose personal data is being processed and measures such as fines to ensure compliance. Compliance with GDPR is monitored by the Norwegian Data Protection Authority.

    10.  IPR DURING EMPLOYMENT RELATIONSHIPS

    IPR or intellectual property rights is the collective term for different rights consisting among other things of patent, trademarks, design and intellectual property (copyright). A common denominator for these rights is that they are protected through legislation and that such protection is acquired through an independent creation process (intellectual property) or by incorporation (trademarks) or registration (trademarks, patents and design).

    As IPR generally require a creation process, they are often created by the employees in performance of tasks for the employer. If the employee creates IPR in connection with performance of tasks for the employer in accordance with the employment relationship, the IPR – in the same manner as any other result of the employee’s performance of work – is, as a general rule, viewed as the employer’s property. Exceptions may apply, depending among other things on the content of the contractual relationship between the parties, if the rights were created during working time or on leisure time, if work premises or the employer’s tools were used in the process and the connection between the created IPR and the employer’s business.

    The employee might be entitled to separate compensation for IPR, either as part of the agreed employment relationship or, when it comes to patents, through legislation.

    Furthermore, IPR enjoys protection through legislation. Examples are the Marketing Practices Act Section 25 on protection of business secrets, the Marketing Practices Act Section 30 prohibiting product imitation as well the general prohibition on acts contrary to good business practices pursuant to the Marketing Practices Act Section 25.

    11.  TEMPORARY LAY-OFF (TEMPORARY REDUNDANCY)

    An employer may temporarily be relieved of their obligation to pay wages through so-called temporary lay-off. The employment relationship would continue, but the employer’s obligation to pay wages and the employee’s obligation to perform work, would be suspended for a limited time.

    11.1  Conditions for temporary lay-off

    Temporary lay-off presupposes justifiable grounds for temporary lay-off relating to the undertaking. Examples of such grounds are temporary shortage of work, temporary curtailment of operations or accidents which halt operations for a limited time.

    The halting of work must be of a temporary nature. If e.g. shortage of work is permanent, the employer must reduce staff through ordinary redundancy procedures.

    11.2  Procedural rules – information and notice to representatives and affected employees

    The employer is required to discuss the matter with worker representatives before the decision is made, and during the lay-off period. Furthermore, the employer must, with a few exceptions, give notice to the employees after which the temporary lay-off takes effect 14 days later. There are requirements to the form and content of the notice.

    If the temporary lay-off involves the same number of employees as is the case in a mass redundancy, and if certain other conditions are met, the employer is required to give a separate notice to the Norwegian Labour and Welfare Administration (NAV).

    11.3  Selection of employees for temporary lay-off

    The selection of employees for temporary lay-off must be so-called justifiable in a reasonable manner. The employer will nevertheless have a margin of appreciation.

    As part of the selection process the employer must put up selection criteria before the selection of employees are made. Examples of criteria could be;

    • the distribution of tasks amongst employees (which employees do currently have sufficient tasks, and which do not)
    • social conditions
    • seniority amongst the employees
    • qualifications

    11.4  Wages during temporary lay-off

    The employer must pay ordinary wages during the notice period and during the employer-financed period (currently ten days). Thereafter NAV will pay benefits for up to 30 weeks after which the employer again pays for one week. After that NAV will pay benefits for 19 weeks. The total time limit for redundancy is thus 49 weeks, which cannot be exceeded within a time frame of 18 months.

    11.5  Temporary lay-off and dismissal

    In case of dismissal during temporary lay-off the temporary lay-off would end, after which the employer would need to pay ordinary wages during the notice period. The ordinary rules for dismissal apply.

    In case the employee wants to end the employment relationship, he or she would be required to give written notice, though the notice period would be 14 days regardless of what is otherwise agreed between the parties.

    12.  DISMISSAL OF EMPLOYEES

    12.1  Threshold and procedural rules

    Dismissal is cause-based, meaning that it requires so-called justifiable cause that may be objectively based on circumstances relating to the undertaking, the employer or the employee.

    The threshold for dismissal is high, and the employer has the burden of proof and must provide good reasons for dismissal. The Working Environment Act furthermore provides detailed procedural rules, including the obligation to a consolidation meeting before dismissal as well as requirements to form with regards to the letter of dismissal. Procedural rules may also follow from collective bargaining agreements, including the obligation to discuss the issue with worker representatives. Non-compliance with these procedural rules or other procedural errors will often cause the dismissal to be viewed as invalid and the employer may be liable for damages.

    In cases of mass redundancy, special provisions apply. These provisions are based on the EU mass redundancy directive (98/59/EC).

    12.2  Dismissal due to circumstances relating to the undertaking or employer

    If costs are not in compliance with income, or in other cases where the cutting of staff is viewed as objectively justified, employers may reduce staff through a redundancy process. If procedural rules are followed, if the process and the employer’s assessments are transparent and if the employer all in all proceeds in a conscientious way, the employer will have a margin of appreciation.

    Reasons that may constitute grounds for redundancy include;

    • declining sales or loss of business,
    • improvements, including technology and efficiency improvements, which may cause positions to be superfluous, and
    • changes in the undertaking’s areas of business.

    The selection of employees for redundancy must be justifiable. Firstly, this means that the area of selection of employees must be justifiable. As a main rule the whole undertaking constitutes the area of selection, though courts have accepted that the area selection is confined to certain parts – for instance a branch – if it, due to an overall assessment, may be viewed as justifiable.

    After the area of selection has been decided upon, the employer must put up criteria for selection of employees for redundancy within the selection area.

    Except for social conditions – which the employer must give weight to – legislation does not limit which criteria may be set up, as long as they, based on an overall assessment, are viewed as justifiable. Many collective bargaining agreements nevertheless stipulate provisions on seniority between employees which the employer must adhere to in redundancy processes.

    Examples of criteria in redundancy processes are;

    • qualifications
    • seniority / length of service
    • social conditions
    • competence
    • the applicability of the employee going forward

    After criteria for selection have been put in place, the employer must assess the employees against the predetermined criteria and decide who are going to be made redundant. The employer must substantiate the decision as the employer has the burden of proof. If subjective assessments of work performance are included (for instance interpersonal skills, applicability etc), it may be of importance if those circumstances have been taken up with the employee prior to the redundancy process.

    Furthermore, a dismissal is not viewed as objectively justified if the employer has other suitable, vacant work to offer the employee. The obligation to offer suitable work includes positions which may be viewed as worse or lower in the hierarchy than the current position.

    Lastly, an employee who is dismissed due to circumstances relating to the undertaking has a preferential right to any new vacant position in the undertaking, unless the position is one for which the employee is not qualified. The preferential right applies from the day notice is given and for one year after the expiry of the notice period. If an employee does not accept an offer of employment which is viewed as suitable, the preferential right will lapse.

    12.3  Dismissal due to circumstances relating to the employee

    When it comes to dismissal due to circumstances relating to the employee, the following circumstances may constitute grounds for dismissal;

    • unsatisfactory job performance
    • disobedience
    • disloyalty
    • fraud or other forms of financial misconduct
    • uncooperativeness and harassment
    • drug addiction and influence of alcohol
    • forms of improper behaviour.

    As the threshold for dismissal is high, the employer must substantiate good reasons for dismissal. The threshold and the assessment are somewhat different for the various above-named circumstances. For instance, financial fraud would most often constitute grounds for dismissal (or summary dismissal) given that the facts are clear, whereas job performance must be substantially lower than what is expected for it to constitute grounds for dismissal.

    During the so-called trial period for the first six months, given that such period is agreed upon, the threshold for dismissal is lower, given that the dismissal is due to lack of suitability for the work, lack of proficiency or reliability. The notice period is usually confined to 14 days, instead of the mandatory notice period or agreed upon longer notice period outside the trial period.

    The employee enjoys protection for dismissal during sick leave or parental leave pursuant to provisions in the Working Environment Act and according to anti-discrimination legislation.

    13.  SUMMARY DISMISSAL

    An employer may summarily dismiss an employee if he or she is guilty of gross breach of duty or other serious breach of the employment contract. It has been established that other measures, such as dismissal with notice, must be viewed as insufficient for there to be grounds for summary dismissal.

    Circumstances such as financial misconduct, absenteeism, drug or alcohol abuse, serious disloyalty, different forms of improper behaviour, disobedience or harassment of co-workers or other business associates might constitute grounds for summary dismissal.

    The effect of summary dismissal is that the employment relationship ceases with immediate effect. In the same manner as is the case with dismissal with notice, the employer must adhere to procedural rules, including consolidation meeting and requirements to form when it comes to the letter of summary dismissal.

    If there are reasons to assume that the employee is guilty of circumstances that may constitute grounds for summary dismissal, and the needs of the undertaking so indicate, the employer may suspend the employee until the matter is fully investigated. There are different procedural rules that apply for suspension.

    14.  NEGOTIATIONS AND LEGAL PROCEEDINGS IN DISMISSAL CASES

    14.1  Negotiations

    An employee who is dismissed, summarily dismissed, suspended or claims there is unlawful temporary employment, suspension, substantive hire or breach of preferential right, has a right to demand negotiations. The demand must be put forth in writing and within certain time frames.

    If a demand for negotiations is put forward, the employer is obliged to negotiate the matter with the employee. There are no obligations to reach an agreement, though agreements – so-called severance agreements – are sometimes reached. Severance agreements often include provisions of duty or exemptions of work, severance pay and other benefits (insurance and pension benefits, bonuses), holiday and holiday pay, discontinuance of the employment relationship, return of property, refund of expenses, hand-over of work assignments, confidentiality, disclaimant of rights to initiate legal proceedings in connection with the discontinuance of the employment relationship.

    14.2  Legal proceedings

    If no agreement is reached, the employee must file legal proceedings within certain deadlines, if he or she wishes to dispute the employer’s decision. The employee may claim that the decision is invalid and demand compensation and damages. The employee may furthermore confine the case to damages.

    14.3  The right to stay in the post or to be reinstated during legal proceedings

    In ordinary dismissal cases the employee has, with some exceptions, the right to stay in the post until the case comes up before the court. The employee would then be obliged to perform his or her ordinary tasks and be entitled to wages and other benefits pursuant to the employment relationship.

    If demanded by the employer, the court may nevertheless decide that the employee must leave his / her post, given that it finds it unreasonable that the employment relationship continues during the process. The threshold for discontinuance is high if dismissal is due to circumstances relating to the undertaking. If the dismissal relates to the employee, the threshold is a bit lower.

    In cases of summary dismissal, dismissal during trial period and in cases of temporary or hired employees, the employee may demand to be reinstated in the post, if so demanded by the employee. The threshold is quite high and presupposes legal proceedings within certain deadlines.

    14.4  Claim for the decision to be invalid and for compensation

    An employee may demand compensation for unfair dismissal, summary dismissal etc. The claim may be put forth in combination with a claim that the decision is invalid, or by itself.

    If the dismissal etc. is viewed as invalid the decision would be viewed as void and the employment relationship would continue. The employee would then be entitled to compensation fixed to an amount that the court finds reasonable in view of;

    • the employee’s financial loss (mainly loss of wages),
    • circumstances relating to the employer,
    • circumstances relating to the employee, and
    • other facts of the case.

    The employee may furthermore demand compensation for future economic loss. This will mainly be confined to loss of future wages until the court finds it is reasonable to expect that the employee has found new employment. Future economic loss would usually not be compensated in cases where the court decides that the dismissal etc. is invalid. The reason being that the employment relationship would continue.

    The employer would furthermore be liable to non-economic loss. The amount is decided by the court in view of;

    • the strain of the dismissal
    • the amount of blame that may be placed, and
    • other relevant facts of the case.

    Non-economic loss is seldom above 100 000 NOK and often substantially lower.

    15.  TRANSFER OF UNDERTAKINGS

    Transfer of undertakings concerns when there is a change of employer in the employment relationship.

    Transfer of undertakings is regulated by the provisions in the Working Environment Act, which again is based on the EU-directive of the transfer of undertakings (2001/23/EC).

    Transfer of undertaking is deemed as taking place when an undertaking or an independent part of the undertaking is transferred to another employer. For a transfer to be deemed as taking place;

    • the undertaking or the parts which are transferred must be viewed as an independent economic entity,
    • the transfer must be based on merging of business or other sort of agreement, and
    • the continued business must preserve its identity after the transfer has taken place.

    Decisions by the EC-court, for instance the Spijkers-ruling (C-24/85), are relevant in the assessment of whether or not conditions are met for the transfer to by viewed as transfer of undertaking.

    In cases of transfer of undertakings, employees enjoy certain rights, including;

    • protection from dismissal during the transfer
    • with some exceptions, entitlement to the same rights and obligations that the employee had against his or her former employer,
    • the right to object to the transfer and preferential right to new employment with the former employer, should new vacant positions arise.

    Lastly there are procedural rules that the employer must adhere to, including obligations to provide information and to discuss the transfer with employee representatives.


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    Svein Steinfeld Jervell
    Partner

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    Published 09.03.2021

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