Norway: New Requirements for Gender Balance in Boards, a Proposal for Amendments to the Working Environment Act, and an Important Ruling on Whistleblowing on its Way to the Supreme Court
New legislation: Clarification of the prohibition of sexual harassment
Previously, we reported that the government proposed a clarification of the prohibition against sexual harassment in the Working Environment Act. Parliament later approved the proposal. The amendments will enter into force on 1 January 2024. For more elaboration on this issue, please read Norway’s Employment Law Tracker (ELT) for May 2023.
New legislation: Requirements of gender balance on boards
Last year, the government proposed a requirement for both genders to be represented by at least 40 percent on the boards of medium-sized and large undertakings. If the rules are adopted, the new requirements will gradually be introduced in 2024. Within 2028, the new rules will apply to undertakings with more than 30 employees or with an operating and financial income of more than NOK 50 million (approximately 4.4 million euros).
Calculations show that the new rules will apply to approximately 20,000 undertakings and that recruiting almost 13,000 new board members will be required.
EFTA Surveillance Authority (ESA) opens a case against Norway
As reported in Norway’s ELT in January and May 2023, access to hiring labour from staffing agencies is further restricted as of 1 April 2023. The new rules have a massive impact on several businesses, in particular staffing agencies and their employees.
In July 2023, the ESA issued a letter of formal notice, concluding that Norway, by implementing these restrictions, is in breach of the Temporary Agency Work Directive and the EEA Agreement.
Despite ESA opening a case against Norway, the new rules will not necessarily be revoked or changed as such. Consequently, employers must still comply with the new rules, at least pending a decision.
Proposal: Amendments to the Working Environment Act, new requirements for employment contracts
In June 2023, the government proposed several changes to the Working Environment Act, aiming to secure safer and more predictable working conditions. The amendments will implement EU Directive 2019/1152.
New requirements for employment contracts
Firstly, an expansion of the current list of required information in the employment contract is proposed. These include:
- If there is no fixed workplace, specifications outlining that the employee may work at different locations or have the freedom to decide where they will work shall be included in the employment contract.
- The obligation to inform about the employee’s right to holiday, holiday pay, and the rules for determining holiday time in the employment contract is extended to apply correspondingly to other paid absences by the employer.
- The employment contract shall state the applicable procedure if one of the parties wishes to terminate the employment relationship and if the employer wishes to dismiss an employee.
- The various components of the salary must be specified separately in the employment contract.
- If daily and weekly working hours vary, the employment contract shall state this and stipulate or provide a basis for calculating when the work will be performed.
- The arrangements that apply for shift changes and work beyond agreed working hours, including payment for such work, shall be specified in the employment contract.
- If the employee is hired out from a staffing agency, their employment contract must include information on the identity of the hiring company.
- The employment contract shall specify the right to training provided by the employer, if any.
- Benefits offered by the employer related to social security and the names of the institutions receiving payments from the employer in this regard must be included in the employment contract.
The government furthermore proposes to shorten the deadline for presenting a written employment contract from one month to seven days, as well as the deadline for adopting changes to the employment contract from one month to the same day that the changes enter into force.
In addition, two presumption rules are proposed. The first rule states that if the employer has not provided information in the employment contract that the employment relationship is fixed term, it shall be assumed that the employment is permanent unless other grounds are shown to be highly probable. The rule is intended to codify current law and does not constitute any material changes.
The second rule applies if the employer has not informed the employee of the scope of the position (the full-time equivalent percentage). In such a case, the employee’s own claim related to the scope of the position shall be assumed and applied, unless other grounds are shown to be highly probable.
New rules for probationary periods
Under the current rule, the probationary period may be agreed upon for up to six months. The government proposes to limit the duration of the maximum probationary period permissible to half the length of the employment if the employment is fixed–term and shorter than 12 months. For example, in a fixed–term employment lasting eight months, the maximum trial period allowed would be four months.
Furthermore, the government proposes to introduce a new rule for probationary periods if an employee’s contract is renewed to continue in a position essentially similar to the position the employee previously held at the employer. A renewal does not, as such, permit a probationary period, regardless of whether the previous position was permanent or temporary and whether the new position is permanent or temporary. The amendment is a codification of current law and does not entail any material changes.
However, in the event of the renewal of an employment contract for permanent employment, a new probationary period may nevertheless be agreed upon if the employee’s previous period of employment and the new probationary period together do not exceed six months. This rule is ultimately aimed at situations where the employee has had short-term temporary employment (with an even shorter initial probationary period) and is subsequently offered a similar permanent position.
Additional information for workers sent abroad
Today, certain additional information must be provided in the employment contract to employees who are sent to work abroad for more than one month, which it is now proposed to reduce to four consecutive weeks. Further additional information requirements are now proposed, including the country in which the work is to be performed, as well as a clarification that the employment contract shall regulate the conditions for the employee’s return journey, including reimbursement. Lastly, the government proposes setting additional requirements for information if the employee is covered by the Posting of Workers Directive.
Request for more predictable and safe working conditions
Furthermore, the government proposes a new rule providing employees who work part-time or who are temporarily employed with a right to request a form of employment with more predictable and safer working conditions. The employer is required to provide a written response within one month.
The right to such a written response will only apply to employees who have been employed at the employer for more than six months and have completed any probationary period, and only if more than six months have passed since the employees’ last request.
When will the regulations enter into force?
Parliament is likely to give its final approval. The amendments will then probably enter into force either on 1 January 2024 or 1 July 2024.
If the proposal is approved, the new requirements will apply to all employment contracts entered into after the amendments have come into force. For existing contracts, employers are given a two-month deadline to supplement the contracts upon request from the employees. Consequently, employers do not have an independent obligation to amend existing contracts.
Important ruling on its way to the Supreme Court: Definition of “whistleblowing”
In the near future, the Supreme Court will decide whether an email from employees’ elected representatives to the HR manager raising criticism towards the management, constituted an issue of concern protected by the Working Environment Act rules on whistleblowing.
The decision will clarify what constitutes criticism of the employer, what constitutes whistleblowing, and consequently the scope of the whistleblowing regulations. The ruling is highly anticipated, as whistleblowing has emerged as a “hot topic” in Norway during the last few years.
The Court of Appeal: Termination of employee who sexually harassed apprentice was unlawful
Although the Court of Appeal decided that a paramedic had sexually harassed an apprentice, it found, based on an overall assessment, that the termination of the employee was unlawful. Emphasis was placed on the employer’s lack of action, the relative severity of the sexual harassment, and existing alternatives to termination.
The Employee was granted redress for non-economic losses.
New decision from the Supreme Court: Enrollment in an occupational pension scheme is partially time-barred
A musician performing concerts for a parish council at a cathedral in Tromsø for several years claimed to have been permanently employed at the parish since 2011. Last year, the Court of Appeals ruled in favour of the employee.
Consequently, the musician claimed that he was entitled to be enrolled in the parish’s occupational pension scheme from 2011. The parish council disputed this and held that enrollment was subject to limitation pursuant to the Limitation Act.
The Supreme Court agreed with the parish council. Consequently, enrollment could not take place until three years prior to interruption of the limitation. In the musician’s case, enrolment therefore took place in 2018.
Key action points
- This fall, employers should start the process of updating their employment contract templates to meet the new requirements. They will likely enter into force within 2024.
- A lack of information or clarity in the employment contract regarding the scope of the position and whether the employment relationship is permanent or fixed term may happen to both permanent and full-time positions. Consequently, the employment contract must clearly state the scope of the position and the form of employment.