Norway: Which company is to be considered as the employer in a corporate group?

The aviation company Norwegian has been organized as a corporate group since 2013. The holding company, Norwegian Air Shuttle ASA, owns several subsidiary companies in which the pilots and the cabin crew are employed.

The Court assessed whether a holding company in a corporation group could be regarded as an employer to employees in the subsidiary companies. The employer concept in Norway is functional, meaning that the decisive condition in assessing which company is the employer, is which company has acted as an employer and exercised the functions of an employer.

Normally this company is the contracting party in the employment contract with the employee. Exceptions from this general rule can be made if particular conditions are met. Firstly, if there is an agreement between the parties about an extended employer concept. Secondly, if another company in reality has acted as the employer. Thirdly, if the employment contract is unclear concerning which company is the employer. The Court found that these conditions were not met in this particular case. The worker’s claim that the corporate group was the employer, was not upheld by the Court.

This means that employers, especially in corporations groups, should note which company is listed as the employer in the employment contract, as well as which company exercises the functions of an employer in reality. Companies should also avoid unclear employment contracts.