Getting the deal through - Labour & Employment 2016

Published 23 June 2016 by Homble Olsby advokatfirma as

The 2016 edition of Getting the deal through was just released. The Labour & Employment chapter regarding Norway is written by Homble Olsby partners Tore Lerheim and Ole Kristian Olsby.

You can downlowd the PDF version of the Labour & Employment chapter regarding Norway, or read it below.


Legislation and agencies 

1 What are the main statutes and regulations relating to employment?

Most employment contracts are regulated by the Working Environment Act. For employees in the central government sector, the Civil Service Act contains specific rules on, inter alia, protection against dismissals.

Collective agreements are an important part of employment regulation in Norway. The rules governing collective agreements and collective labour relations in Norway are found mainly in the Labour Disputes Act and the Public Service Labour Disputes Act.

Other important statutes relating to employment are the Vacation Act, the National Insurance Act, the Personal Data Act and the various Discrimination Acts.

2 Is there any law prohibiting discrimination or harassment in employment? If so, what categories are regulated under the law?

The Working Environment Act, and also the various Discrimination Acts, prohibit discrimination in employment. The protection against direct and indirect discrimination and harassment is applicable to the following categories of discrimination: age, disability, gender, race, colour, religion or belief, political opinions, sexual orientation, and national, social or ethnic origin.

Further, employers cannot discriminate against part-time or fixed-term employees (see question 25).

3 What are the primary government agencies or other entities responsible for the enforcement of employment statutes and regulations?

In most cases, employment statutes and regulations are enforced by Norwegian courts. However, the Labour Inspection Authority has the administrative and supervisory responsibilities for a number of acts, including the Working Environment Act and the Vacation Act. If orders from the Labour Inspection Authority are not complied with by an employer, fines may be imposed and, in serious cases, the business may be ordered to close. Further, the Labour Inspection Authority may report employers to the police for serious breaches of the acts.

Other government bodies responsible for the enforcement of specific working environment standards include the Norwegian Maritime Directorate, the Petroleum Directorate and the Civil Aviation Authority.

Further, the Equality and Antidiscrimination Ombudsman and Tribunal assist in enforcing Norway’s anti-discrimination laws. Employees’ rights within the public sector are also protected by the Parliamentary Ombudsman.


Worker representation

4 Is there any legislation mandating or allowing the establishment of a works council or workers’ committee in the workplace?

The Working Environment Act requires that all employers in Norway with more than 50 employees must have Working Environment Committees. Employers with 20 to 50 employees are also required to have Working Environment Committees if the employees, the employees’ representative or the employer requires it. In addition, the Labour Inspection Authority can decide that employers with fewer than 50 employees must establish a Working Environment Committee. Working Environment Committees are primarily dedicated to health and safety issues in the workplace.

The Basic Agreement between the Norwegian Labour Organisation and the Norwegian Business Confederation contains rules on co- determination committees, or works councils, with equal representation from management and employees in firms with more than 100 employees. Works councils must also be established in companies with fewer than 100 employees if requested by one of the parties.

Another important feature of the Norwegian rules regarding worker representation is the rules regarding the employees’ right to be represented on the board of directors. In accordance with the Private Limited Liability Companies Act and the Public Limited Liability Companies Act, employees are entitled to elect employee representatives on to the board of directors in companies with 30 or more employees.


Background information on applicants

5 Are there any restrictions or prohibitions against background checks on applicants? Does it make a difference if an employer conducts its own checks or hires a third party?

Employers are, in the main, prohibited from obtaining information that constitutes sensitive personal data under the Personal Data Act. This includes medical information and criminal records. However, in certain positions, typically involving work with responsibility for children, the employee will have to comply with statutory requirements relating to his or her background (no registered criminal offences), and in such cases the applicant must provide the employer with such information.

The same restrictions apply if the employer hires a third party.

6 Are there any restrictions or prohibitions against requiring a medical examination as a condition of employment?

It follows from the Working Environment Act that the employer can ask for health data if this is necessary to decide whether the applicant is able to perform the job in question. However, the main rule is that the employer cannot require a medical examination as part of the process of selecting the right candidate. For some positions, such as pilots, the statutory provisions or regulations require applicants to undergo a medical examination as a requirement for employment. In such cases, the employer will be entitled to refuse to hire an applicant who does not accept to undergo a medical examination.

7 Are there any restrictions or prohibitions against drug and alcohol testing of applicants?

Drug and alcohol testing of applicants is only permitted under Norwegian law if this explicitly follows from statutory provisions or regulations, if the position involves particular risks, or if the employer finds it necessary for the protection of life or health.

If the employer is allowed to carry out a test, and an applicant does not submit to such test, the employer is entitled to refuse to hire this applicant.


Hiring of employees

8 Are there any legal requirements to give preference in hiring to, or not to discriminate against, particular people or groups of people?

As a general rule, employers in the private sector can freely choose which candidate to hire, whereas employers in the public sector must hire the best qualified candidate. Both private and public employers must comply with the prohibitions against direct and indirect discrimination on the grounds that follow from the Working Environment Act and the various Discrimination Acts.

Affirmative action is allowed for objective and legitimate reasons. This is typically the case if an employer needs to raise the employment rate of one gender.

Employees who have been made redundant, temporary employees and employees who have refused to take part in a transfer of business will also, under certain circumstances, have a preferential right to employment. Part-time employees also have, under certain conditions, a preferential right to extend their working hours.

9 Must there be a written employment contract? If yes, what essential terms are required to be evidenced in writing?

The employment contract shall be in writing and contain information on matters of major importance for the employment. It is explicitly stated in the Working Environment Act what information the employment contract must contain, and this includes, for example, the identity of the parties, the place of work, a description of the work (or the employee’s title, post or category of work), the date of commencement of the employment, the employee’s and the employer’s period of notice, and many other terms.

10 To what extent are fixed-term employment contracts permissible?

Until 1 July 2015, fixed-term employment contracts were only permitted under special circumstances. This included work that deviates from the work that is normally carried out in the business, work to cover the company’s needs during unforeseen peaks and seasonal fluctuations, and replacement staff for employees on leave. With effect from 1 July 2015, fixed-term employment contracts of up to 12 months are also allowed without any need for specific reasons for the time limitation.

If a fixed-term employment has lasted for more than three years, four years for some fixed term employments, the employee is entitled to a permanent position. If a fixed-term employment, which has not lasted for more than four years, does not meet the legal requirements of the Working Environment Act, the employee will also be entitled to a permanent position.

For employees in the central government sector, fixed-term employments are also permitted in specific situations other than those mentioned above.

11 What is the maximum probationary period permitted by law?

The maximum probationary period permitted by law is six months. This period may not be extended at the discretion of the employer. In the case of sick leave during the probationary period, the probationary period may be extended by a period corresponding to the period of absence if the employment contract contains provisions regarding such possible extensions. The extension must be notised to the employee before the probationary period has expired and cannot be used if absence is caused by the employer.

12 What are the primary factors that distinguish an independent contractor from an employee?

There are no statutory provisions distinguishing an independent contractor from an employee, and this must therefore be assessed on the basis of guidelines following from case law.

Factors indicating that there is an employment relationship include fixed hours of work, fixed compensation paid on a monthly basis (and not reduced in the case of underperformance), notice period, and whether the employer controls and directs the person’s work.

Factors indicating that the person is an independent contractor include work performed in the person’s own name and at his or her own risk, compensation being reduced in the case of underperformance, and whether the work is performed with his or her own equipment and on his or her own premises.

The actual situation is decisive if this deviates from what is stated in the contract between the parties.

13 Is there any legislation governing temporary staffing through recruitment agencies?

Workers can be hired for a limited period from recruitment agencies. Enterprises that hire workers from such agencies are obliged to investigate whether the agency is registered in the Norwegian Labour Inspection Authority’s register of approved temporary-work agencies. Further, staffing through recruitment agencies is only permitted to the same extent that temporary employment is permitted, except from temporary employments up to 12 months on a general basis.

Workers can also be hired for a limited period from undertakings other than those whose object is to hire out labour, provided that certain requirements are met.

The Working Environment Act requires equal treatment of workers hired from temporary-work agencies, including the same pay and working conditions as workers employed directly by the hiring undertaking. This also includes the obligation for the hiring undertaking to provide the recruitment agency with the necessary information to ensure that the agency is able to comply with the equal treatment requirement. The workers are entitled to necessary information in order to assess whether their pay and working conditions comply with the equal treatment requirement. The hiring undertakings is jointly and severally liable for payment of salary, holiday pay and any other allowances that follow from the principle of equal treatment.

A person who is unlawfully hired from a recruitment agency may take legal action and claim compensation or permanent employment from the hiring undertaking.


Foreign workers

14 Are there any numerical limitations on short-term visas? Are visas available for employees transferring from one corporate entity in one jurisdiction to a related entity in another jurisdiction?

Norway places a quota on work permits for foreign nationals, but up to 2015 fewer foreign citizens had applied for work permits than the quotas allow. There are no numerical limitations on short-term visas for foreign workers, and these visas will, as a starting point, not be included in the required three-year period if the foreign worker applies for a permanent residence permit.

If the employee is resident in another EU or EEA member state, and has been posted from there, no work permit is required. If the stay in Norway lasts for more than three months, the employee must nevertheless apply for a residence card no later than three months after his or her arrival in Norway. For workers outside the EU and EEA, the requirement for a work permit also applies to those who move within a company group to work.

15 Are spouses of authorised workers entitled to work?

Spouses of authorised workers can be granted family immigration status that also allows them to work while living in Norway.

16 What are the rules for employing foreign workers and what are the sanctions for employing a foreign worker that does not have a right to work in the jurisdiction?

Employees from the Nordic countries do not any need any visa or permits to live and work in Norway.

Further, EU or EEA citizens will, as a starting point, not need a permit, but if they want to stay longer than three months, they have to register with the Directorate of Immigration.

Employees from a country outside the EU and EEA who wish to work in Norway will need a residence permit for work. Previously this was called a work permit.

Workers applying for a job in Norway must have a concrete job offer to obtain a residence permit for work. It is also required that the terms of employment for the foreign worker are equal to or better than those provided under a Norwegian collective agreement or that are customary for the occupation or sector.

Norway also grants group work permits for transfers within a single company for the completion of special projects in Norway. These group work permits are reserved for companies that are seeking to send at least six employees to Norway, and who have special skills or qualifcations that make them necessary to the success of the project.

Even though the employee is responsible for obtaining the necessary work permit, the employer risks a fine or imprisonment if a foreign worker without the necessary permit is employed.

17 Is a labour market test required as a precursor to a short or long-term visa?

Residence permits for work can only be granted if there are no workers from Norway or the EU or EEA who are willing and qualfied to undertake the position offered to the foreign worker.


Terms of employment

18 Are there any restrictions or limitations on working hours and may an employee opt out of such restrictions or limitations?

Pursuant to the Working Environment Act, normal working hours are limited to 40 hours per week and nine hours per day. In some industries, specific rules apply. In collective agreements and individual employment contracts, the agreement is often 37.5 hours per week and 7.5 hours per day.

These limitations can be deviated from in collective agreements, but not in individual employment contracts. On the other hand, the employer and employee can agree that normal working hours shall be calculated on average in such a way that the calculation of the maximum working hours is done over a maximum period of 52 weeks. Total working hours still cannot exceed nine hours per 24 hours and 48 hours per seven days. A similar agreement can also be entered into between the employer and a trade union.

Overtime work cannot exceed more than 10 hours per seven-day period, 25 hours overtime per consecutive four-week period and 200 hours per consecutive 52-week period. These limitations can be deviated from in agreements with a trade union and in decisions from the Labour Inspectorate Authority.

Employees have the right to an exemption from overtime based on health or other valid personal reasons.

There are no restrictions or limitations on working hours for employees in executive or particularly independent positions.

19 What categories of workers are entitled to overtime pay and how is it calculated?

All workers who are not in executive or particularly independent positions are entitled to overtime pay. The statutory requirement is that hourly over- time compensation should be 40 per cent of the hourly salary, which comes on top of the normal hourly salary. Many employees are covered by collective agreements that stipulate that the compensation should be 50 per cent.

20 Can employees contractually waive the right to overtime pay?

As the right to overtime pay follows from mandatory rules, employees cannot contractually waive their right to overtime pay. However, the employee and the employer can agree that the overtime be taken out as spare time, in which case the employee will only be entitled to the overtime compensation and not the normal hourly salary for this overtime.

21 Is there any legislation establishing the right to annual vacation and holidays?

Employees in Norway are entitled to an annual vacation of 21 working days (or 25 days if Saturdays are included). Employees who are 60 or older are entitled to an additional week of vacation. Many collective bargaining agreements also provide for four additional vacation days for all employees.

The vacation pay is a percentage of the employer’s payments to the employee during the previous calendar year (10.2 per cent in the case of 21 days’ vacation, 12 per cent in he case of 25 days’ vacation and 12.5 per cent for employees older than 60). In order to receive full pay for vacation days, an employee must have been employed during the entire previous calendar year. If this is not the case, the employee may still take vacation, but the vacation pay will be reduced accordingly.

22 Is there any legislation establishing the right to sick leave or sick pay?

The National Insurance Act establishes the right to sick leave and sick pay, which is available for any employee who has been employed for at least four weeks before the sick leave begins. The cause of sick leave must be documented by a self-declaration form or a medical certificate.

Employees are entitled to sick pay from the first day of absence. The employer is responsible for the sick pay for the first 16 days, and after this the National Insurance scheme takes over and continues to pay for a period of up to 52 weeks. Employers can, in collective agreements or employment contracts, undertake to cover the difference between the sick pay from the National Insurance and the employees’ full salary for the same, or a shorter, period.

23 In what circumstances may an employee take a leave of absence? What is the maximum duration of such leave and does an employee receive pay during the leave?

Leave of absence is granted in a number of situations under Norwegian law.

Pregnant employees are entitled to a maximum of 12 weeks’ unpaid leave during their pregnancy and six weeks of additional leave after they give birth. The father, if he lives with the mother, is entitled to two weeks of unpaid leave to provide care to his family. Adoptive parents and foster parents are also entitled to two weeks of unpaid leave when taking over responsibility for the care of a child.

Parents (including adoptive and foster parents) are also entitled to childcare leave for a total of 24 months. For the first 12 months of this period, the parents are entitled to payments from the National Insurance.

Many employers give employees the right to full salary during the first 12 months of the period of childcare leave and therefore cover the difference between the employees’ salary and the payments from the National Insurance.

Employees are also entitled to paid leave for health, social, or other material reasons related to their personal welfare, including for the care of a sick child who is 12 years old or younger. Other categories of unpaid leave include educational leave and compulsory or voluntary military service.

24 What employee benefits are prescribed by law?

Few employee benefits are prescribed by law, but important statutory rights are: pension from the employer (in addition to the pension from the National Insurance), vacation and vacation pay, and sickness benefits.

25 Are there any special rules relating to part-time or fixed-term employees?

Employers are prohibited from discriminating directly or indirectly against fixed-term and part-time employees because of their employment status. Exceptions from this are only permitted if the employer can demonstrate that the differential treatment is justifed on reasonable grounds.

A part-time employee will also have a preferential right to increased working hours if he or she should wish so and the employer has a need for the labour that the part-time employee is qualified to perform.

A fixed-term employee will also have a preferential right to employment for a period up to 12 months after the employment contract expired, if there are vacant positions in the company for which the fixed-term employee is qualified.


Post-employment restrictive covenants

26 To what extent are post-termination covenants not to compete, solicit or deal valid and enforceable?

New rules regarding post-termination covenants not to compete, solicit or deal entered into force with effect from 1 January 2016. The most important rule now is that covenants to restrict competition by employees cannot exceed 12 months, and that the employee is entitled to compensation during the restricted period that equals his or her full salary (with some limitations for employees with higher salary). The new legislation will also be applicable to already existing restrictive covenants with effect from 1 January 2017. The restrictions will only be valid if the employer gives a written statement in which the particular need for protection is explained.

Employees who are made redundant will not be bound by the non- competition clauses in their employment contracts after the period of notice has expired. This will also be the case if the employee has resigned and the employer has given him or her a reason for the resignation by not fulfilling the employer’s obligations towards the employee.

27 Must an employer continue to pay the former employee while they are subject to post-employment restrictive covenants?

Yes, the employee is entitled to compensation as long as the restriction is in force. The compensation must equal full salary for salary up to 7G (‘G’ is the base amount in the national insurance) and 70 per cent of salary above this. However, the employer can decide that total compensation shall be limited to 12G. (see question 26).


Liability for acts of employees

28 In which circumstances may an employer be held liable for the acts or conduct of its employees?

Employers can only be held liable for the acts or conduct of their employees if the acts or conduct are negligent and carried out as a result of or relating to the employees’ duties.


Taxation of employees

29 What employment-related taxes are prescribed by law?

Employees are liable to pay tax to the Norwegian tax authorities on any income from employment in a Norwegian company. Preliminary income tax is deducted from the employee’s salary and paid by the employer to the tax authorities. In 2016 the income tax rate is 25 per cent (national and municipal income tax), with an additional ‘top rate tax’ of 0.44 per cent on income between 159,800 and 224,900, 1.7 per cent between 224,900 and 565,400, 10.7 per cent between 565,400 and 909,500 Norwegian kroner, and 13.7 per cent on income above this.

Employers are also obliged to deduct social security tax from the employee’s gross salary and other gross employment benefits. For 2016 the social security tax rates are 8.2 per cent for salary, 5.1 per cent for pension and 11.4 per cent for other income (eg, bonuses).

Employers in Norway are also required to pay an ‘employer’s contribution’ (or ‘payroll tax’) to the national insurance. This tax is calculated as a percentage of the wages paid in the course of a year. The amount of the payroll tax varies between zero and 14.1 per cent depending on the employer’s geographic location.


Employee-created IP

30 Is there any legislation addressing the parties’ rights with respect to employee inventions?

It follows from the Employee Inventions Act that the employer, in the main, is entitled to patentable inventions that result from work an employee has carried out as part of his or her ordinary work, and the use of the invention falls within the employer’s area of activity. Similar non-statutory rules apply to other inventions.

31 Is there any legislation protecting trade secrets and other confidential business information?

Trade Secrets are mainly governed by two set of rules under Norwegian law. The provisions that shall protect a company against the employees’, contract partners’ and other business partners illegal use of its trade secrets follows from the Marketing Control Act and the Civil Penal Code. Pursuant to the Marketing Control Act a person who has gained knowledge or possession of a trade secret in connection with a position of employment or trust or with a business relationship, must not use the secret unlawfully in the conduct of business. The same applies to a person who has gained knowledge or possession of a trade secret through breach by another person of his or her professional secrecy or otherwise through the unlawful act of another person.

The term trade secret is not defined in the legislation, but it is stated in the preparatory works to the Marketing Control Act that it must be knowledge that is specific for the company and that this knowledge is of importance to the company. This knowledge can be of any nature and the company must in some way make it clear that the knowledge must be held confidential. The definition or specification of trade secrets may also follow from a clause in the employment contract or other contractual bases. Such clauses may limit the employees’ possibilities to handle trade secrets even further, but if the clause is considered unfair, it may be set aside by a court.


Data protection

32 Is there any legislation protecting employee privacy or personnel data? If so, what are an employer’s obligations under the legislation?

The Personal Data Act is intended to protect all individuals, including employees, against violation of their personal integrity through the processing of personal data. Enforcement of the Personal Data Act is overseen by the Data Inspectorate.

Personal data may only be processed if such processing is lawful and if the data is collected for specific, explicitly stated and justified purposes. The processing must be relevant and necessary for the purpose stipulated and personal data may not be stored for longer than necessary with reference to the specified purposes. Personal data may be processed in order to satisfy a purpose that concerns a legitimate interest of the employer, provided that this interest outweighs the interest of the registered person in terms of protection against violations of personal integrity.

Sensitive personal data (eg, information about employees’ or applicants’ race or ethnic origin, political opinions, religious or philosophical beliefs, membership of a trade union, or personal data concerning health or sexual preference) may only be processed in special circumstances. Employees are allowed to give consent to the processing of sensitive data. Such consent must be specific, individual and contemporaneous. The Data Inspectorate has the authority to determine whether sensitive personal data may be processed in other circumstances if warranted by important public interests and where measures are taken to protect the interests of the individual.

The General Civil Penal Code imposes a penalty for unlawful access to data or software that is stored or transferred by electronic or other technical means. While employers do have the ability to monitor work-related email, this ability does not include private email, even if the employer is the owner of the computer system. Email considered private may not be opened or read without the employee’s consent.


Business transfers

33 Is there any legislation to protect employees in the event of a business transfer?

Norway has adopted the Transfers of Undertakings Directive by incorporating its provisions into the Working Environment Act.

Before a transfer of undertaking, the existing employer (seller) and the future employer (purchaser) must discuss the transfer with the employees’ elected representatives as early as possible.

The terms of employment for the seller’s employees are, in most cases, transferred to the new owner. The purchaser is also bound by any collective wage agreement that was binding on the seller. However, within three weeks following the date of transfer, the purchaser may give written notice to the trade union that it does not wish to be bound by the agreement. The transferred employees will still be entitled to retain the individual working conditions that followed from the collective agreement until the collective agreement expires, or until a new collective agreement is concluded that is binding on the new employer and the transferred employees.

Specific rules also apply to pension schemes. Although the purchaser, as a starting point, must maintain the seller’s existing pension plan, the purchaser can decide to cover the transferred employees under its own pension plan, regardless of whether this pension plan provides less generous benefits than the seller’s plan.

The transfer of business does not, in itself, constitute justifiable grounds for the dismissal of an employee.


Termination of employment

34 May an employer dismiss an employee for any reason or must there be ‘cause’? How is cause defined under the applicable statute or regulation?

There must be a ‘cause’ for dismissal under Norwegian law. For employees in the central government sector, specific rules apply that are intended to strengthen their employment protection.

Dismissals during the trial period must be based on either the employee’s lack of suitability for the work or lack of proficiency or reliability. When the employee has finished the trial period, a dismissal of the employee upon proper notice must be objectively justified on the basis of matters connected with the company, the employer or the employee.

There are no statutory provisions that specify or indicate by way of example what kind of employee conduct is suficient to justify a dismissal. This is determined on a case-by-case basis.

An employee cannot be made redundant if the employer has other suitable work to offer. In addition, the needs of the company must be weighed against the inconvenience of a dismissal for the individual employee. The consequence of this rule is that, even if an employer has cause for dismissing an employee, the dismissal will not automatically be legal.

The selection of the employees who may be made redundant must be carried out in accordance with the non-statutory guidelines arising from case law or applicable collective agreements, or both. It is not always the employee whose position will be eliminated who will have to be dismissed. When making the selection for dismissals, the employer is required to take into consideration all the employees in the company. If the company is organised in divisions that are significantly different from each other, the employer must take into consideration all the employees within the division.

35 Must notice of termination be given prior to dismissal? May an employer provide pay in lieu of notice?

Notice requirements are imposed on both employers and employees. Further, to the extent possible, employers must, in advance of a dismissal, discuss the possibility of dismissal in a meeting with the individual employee, who is entitled to be assisted by an employee representative or other adviser in such meeting.

The notice period varies from one month (14 days in the trial period) to six months, depending on the employee’s age and seniority. The employer’s notice of dismissal must also meet other requirements, including that it must be made in writing and state the procedure to be followed if the employee wishes to dispute the dismissal.

As the rules regarding dismissals are mandatory, payment in lieu of notice is only possible if the employee agrees to this.

36 In which circumstances may an employer dismiss an employee without notice or payment in lieu of notice?

Employees can be dismissed without notice in the event of a gross breach of duty or serious breach of the employment contract.

37 Is there any legislation establishing the right to severance pay upon termination of employment? How is severance pay calculated?

Severance pay is not prescribed by law in Norway. However, there is a severance pay scheme agreed between the Norwegian Labour Organisation and the Norwegian Business Confederation that applies to all employees in almost all companies with trade unions. This scheme provides for severance pay in case of redundancy, illness or bankruptcy. Severance pay pursuant to this agreement is granted to employees aged between 50 and 67, and varies from 20,000 to 80,000 Norwegian kroner.

Severance pay is often agreed between the employer and the employee representatives before a redundancy process is carried out.

38 Are there any procedural requirements for dismissing an employee?

After the employee has received a notice of dismissal, he or she is entitled to demand that the grounds for dismissal be stated in writing if this is not already the case. If the employee makes such a request, the employer must comply.

Prior approval from a government agency is not required by law. However, before making a decision regarding dismissal with notice, the employer shall, to the extent that it is practically possible, discuss the matter with the employee and his or her elected representatives.

In the case of redundancies, the employer also has to comply with statutory requirements regarding information and consultations with the employees’ representatives and additional non-statutory requirements in advance of any dismissals, including assessments of whether there is any other suitable work available for employees who are considered redundant.

Under guidelines established through case law, in selecting the employees for dismissal, the employer must discuss the selection criteria with the employees’ representatives, including formal and factual qualifications, ability, age, seniority, and social and health conditions. An employee who chooses to dispute a dismissal, will, in the main, be entitled to remain in his or her position until an amicable solution is reached or, in case of legal proceedings, there is a final verdict from the court.

39 In what circumstances are employees protected from dismissal?

Employees who are sick or injured may not be dismissed on grounds of sickness or injury during the first 12 months after their period of sickness or injury started.

Pregnant employees may not be dismissed on grounds of pregnancy; employees who are on maternity, paternity or adoption leave may not be dismissed on grounds of absence for reasons related to their leave; and employees who are in the military or civil service may not be dismissed on grounds of absence for reasons related to their service.

Pursuant to the Basic Agreement, the employees’ elected representatives are given specific protection against dismissal by requiring that due regard must be given to the special position that they have in the company.

Under the whistle-blower-provisions of the Working Environment Act, employers are prohibited from dismissing, or in any other way from retaliating against, a whistle-blower who has acted in good faith when reporting on alleged misconduct in the company.

40 Are there special rules for mass terminations or collective dismissals?

Yes. Before collective dismissals (involving possible dismissal of 10 or more employees within a period of 30 days), the employer must, at the earliest opportunity, enter into consultations with the employees’ elected representatives with a view to reaching an agreement to avoid employee dismissals or to reduce the number of employees who will be dismissed. For purposes of these consultations, the employer must provide the elected representatives with written notification containing information on several issues, such as the grounds for the redundancies, the number of employees who may be made redundant, the selection criteria for those who may be made redundant and the criteria for calculating extraordinary severance pay, if applicable.

The employer must also notify the Labour and Welfare Organisation of the possible mass termination, and the dismissals cannot take effect before 30 days after such notice has been sent.

41 Are class or collective actions allowed or may employees only assert labour and employment claims on an individual basis?

Class actions were not permitted in Norway until 2008. Before that, disputes that involved several employees were organised in alternative ways and with each claimant individually named in lawsuits, and these alternative procedures are still allowed.

Collective disputes regarding the understanding of collective agree- ments can only be brought to the Labour Court, and only by the involved trade union or employers’ organisation.

42 Does the law in your jurisdiction allow employers to impose a mandatory retirement age? If so, at what age and under what limitations?

Yes, under Norwegian law employers are entitled to impose mandatory retirement ages that deviate from the Working Environment Act’s stipulated retirement age of 72. In most cases, the mandatory retirement age has been set to 67 years. With effect from 1 July 2015, the employer can set the mandatory retirement age to 70 if this is discussed with the employees’ representatives and the retirement age complies with the prohibition against discrimination based on age, which means that the retirement age must be reasonably justified by a legitimate aim, and lowering the retirement age must be an appropriate and necessary means of achieving that aim.

Further, the retirement age must meet the following three, non- statutory requirements:


  • it must be made known among the employees;
  • the employer’s practice regarding the retirement age must be strict – the employer cannot allow too many employees to continue their employment after the retirement age; and
  • the employees must be entitled to a suficient pension when they retire.

Lower mandatory retirement age than 70 years can only be set if this is necessary owing to health or security reasons.


Dispute resolution

43 May the parties agree to private arbitration of employment disputes?

Only the managing director of the enterprise can agree to private arbitra tion of employment disputes in his or her employment contract.

After a dispute has arisen, for example after an employee has received a notice of termination, other employees can also agree to private arbitration.

44 May an employee agree to waive statutory and contractual rights to potential employment claims?

Employees cannot agree to waive statutory rights before a dispute regarding the particular statutory right arises. Employees can, on the other hand, agree to waive contractual rights at any time.

45 What are the limitation periods for bringing employment claims?

The normal limitation period of three years will also apply to most employment claims. Some pension claims have a limitation period of 10 years.


Update and trends

The Norwegian government have initiated reports regarding the need for new legislation on working time which may end up as a proposal during 2016. Further, reports have also been prepared with respect to a complete new act regarding the regulation of employments in the central governmental sector.

Reproduced with permission from Law Business Research Ltd. This article was first published in Getting the Deal Through: Labour & Employment 2016, (published in April 2016; contributing editors: Matthew Howse, Sabine Smith-Vidal, Walter Ahrens and Mark Zelek, Morgan Lewis & Bockius LLP).