New Developments
New legislation to combat work-related crime
On 1 January 2022, new rules entered into force aiming to combat work-related crime. Firstly, a new rule was introduced in the Criminal Code, making wage theft a criminal offence. An employer who fails to pay employer wages, holiday pay, or other remuneration the employee is entitled to, can be punished by a fine or imprisonment of up to two years, or six years if the wage theft is aggravated.
Secondly, the penalty for violations of the WEA is increased from three to five years in the event of particularly aggravating circumstances of breaches.
Thirdly, a new rule was introduced in the Act on Mandatory Occupational pensions, stating that the CEO of an undertaking that does not have an occupational pension scheme in line with the act, can personally be punished by a fine or imprisonment for up to two years.
Furthermore, the WEA was amended by introducing a new main rule stating that salary, including holiday pay and other remuneration, shall be paid from the employer to the employee’s bank account via a bank or undertaking entitled to operate a payment service. Consequently, employers cannot pay wages in cash anymore, unless payment via bank or payment service is impossible or extremely difficult for the employee or the employer.
Pension from the “first krone” (“first penny”)
As of 1 January 2022, the following changes relating to pension entered into force:
- All employers who are obligated to provide a pension scheme must pay at least 2 percent of the employee’s income from the first krone. Previously, the employer was obligated to pay from the first krone exceeding 1G (equivalent to NOK118 620, approximately EUR 10 375).
- The requirement of at least a 20 percent position in order to be entitled to membership in the pension scheme is revoked.
- The age limit to be entitled to membership is lowered from 20 years to 13 years.
The changes primarily affect women and part-time employees in retail private services, hotels and restaurants, and calculations show that 160 000 new employees are entitled to pension accruals pursuant to the amendments.
General access to temporary employment revoked
As of 1 July 2022, the unconditional (although limited) access to temporary employment was revoked. Hence, for most practical purposes, temporary employment is only permitted when the work is of a temporary nature, or for temporary replacements/stand-ins for absent employees.
The Transparency Act
In July 2022, the Business Transparency and Work on Fundamental Human Rights and Decent Working Conditions Act (the “Transparency Act”) came into force. The purpose of the act is to promote enterprises’ respect for fundamental human rights and decent working conditions in connection with the production of goods and the provision of services, and to ensure the general public access to information regarding how enterprises address adverse impacts on fundamental human rights and decent working conditions. To achieve this, the act introduces three main obligations for larger enterprises:
- Conducting due diligence assessments
- Publishing an account of the due diligence assessments
- Providing information upon written request
The Consumer Authority monitors compliance with the provisions of the Transparency Act. During the first year of the act, the Consumer Authority primarily focused on guidance regarding the act’s requirements, establishing its own operational procedures, and addressing complaints. However, the Consumer Authority has now announced its intention to initiate inspections, and that clear and obvious violations of the act will be sanctioned.
Full-time employment as a default rule
As of 1 January 2023, a new rule was introduced in the WEA stating that an employee as a default rule shall be employed full time.
The need to deviate from this rule, e.g., part-time employment, must be documented in writing before the employment takes place. The documentation shall be available to the employee representatives and the question of part-time employment shall also be discussed with the employee representatives.
Furthermore, part-time employees already have a preferential right to extend their existing positions at the expense of the employer creating a new position. As of 1 January 2023, this preferential right also applies in the event of hiring personnel in the undertaking. Furthermore, part-time employees are granted a preferential right to extra shifts and the like in the undertaking.
Strengthened position for posted workers
The regulations governing posted workers have undergone revisions to implement EU Directive 2018/957. Previously, only certain provisions of the WEA applied to all posted workers, regardless of the duration of the posting. Starting 1 January 2023, posted workers staying in Norway for more than 12 months are covered by the vast majority of Norwegian employment rules, with the exception of certain significant provisions, including regulations on employment protection, temporary employment restrictions and the mandatory occupational pension act.
Additional amendments clarify the posted workers required pay, and that the responsibility for ensuring accurate pay and working conditions when an employee hired from a staffing agency is posted from Norway, lies with the staffing agency. Furthermore, the updated regulations introduce stricter documentation requirements related to the duration of the posting and the anticipated number and identity of posted employees.
Restrictions to hiring of labour from staffing agencies
On 1 April 2023, new rules entered into force restricting employers access to hire labour from staffing agencies. Firstly, the temporary character of the work can no longer be the basis of hiring from staffing agencies. Consequently, employers access to hire labour from staffing agencies to handle extra workload in connection with seasons, is very limited. Hiring from staffing agencies will for most practical purposes only be permitted for work as a temporary replacement for another employee or employees. However, if certain collective bargaining agreements are in place, an exception may be made through agreements with the employee representatives.
Furthermore, two specific exceptions are introduced, which permits hiring from staffing agencies when the work is of a temporary character:
- Hiring health personnel from staffing agencies when necessary to ensure proper operation of health and care services
- Hiring of employees with special expertise who will perform advisory and consultancy services in clearly delimited projects.
Secondly, a general ban prohibiting hiring from staffing agencies to construction sites in Oslo, Viken and former Vestfold has been introduced. Thirdly, the definition of hiring from staffing agencies has been clarified in the WEA. The amendment aims to prevent circumvention of the rules on hiring from staffing agencies. Lastly, the right to permanent employment for staff hired from staffing agencies have been strengthened. Previously, staff hired from staffing agencies was entitled to permanent employment at the hirer after three or four years of continuous employment at the hiring company, depending on the legal basis for the hiring. As of 1 January 2023, the staff is entitled to such permanent employment after three years.
The restrictions have had a massive effect on several businesses in Norway. In July 2023, ESA (EFTA Surveillance Authority) issued a letter of formal notice stating that Norway – by banning the use of labour from staffing agency when the work is of a temporary character and by introducing a general ban of hire from staffing agencies on construction sites in certain parts of Norway – is in conflict with the EEA Agreement and the Temporary Agency Work Directive. As of 20 September 2023, the case is pending.
Amendments to the WEA as of 1 January 2024
As of 1 January 2024, further changes to the Working Environment Act entered into force:
- The definition of an “employee” is clarified, making it easier to assess whether a worker is an employee or an independent contractor. Furthermore, a presumption rule is introduced, stating that a worker is presumed to be an employee unless the client can provide arguments making otherwise highly probable.
- Employer obligations for group companies are extended during downsizing. The employer’s obligation to search for other suitable work during downsizing is extended to apply to all group companies. Furthermore, an employee’s preferential right after redundancy is extended to apply to suitable work in all group companies. The new provisions also apply to undertakings in Norway that are part of a foreign group. Nevertheless, the requirement to offer other suitable work and the extension of employees’ preferential rights will be restricted to activities in Norway.
- Groups with more than 50 employees are subjected to an obligation to establish frameworks for co-operation, information, and consultation between the groups and the employees in the group. The obligation to establish the frameworks lays with the parent company.
- As of 1 January 2024, employees who have been temporarily employed on a continuous basis for three years are entitled to permanent employment. Under the previous rules, such permanent employment occurred after three or four years of continuous employment, depending on the legal basis of the temporarily employment.
- More companies must establish working environment committees and elect safety representatives. Under the previous rules, undertakings with more than 50 employees had an obligation to establish working environment committees. This threshold was lowered to 20 employees. Furthermore, as of 1 January 2024, working environment committees shall also be formed in undertakings with ten or more employees, as opposed to the previous obligation of 20 employees. According to the previous rules, a different arrangement aside from safety representatives could be agreed upon at undertakings with less than ten employees, including agreeing that the undertaking shall not have a safety representative. After 1 January 2024, this only applies to undertakings with less than five employees. The safety representative`s duties were also extended to apply correspondingly to employees hired from staffing agencies and individual contractors performing work in close connection to the undertaking.
- Even before 1 January 2024, employers had an annual obligation to consult the use of part-time employment, temporary employment, and hiring from staffing agencies with the employees’ elected representatives. After 1 January 2024, employers have a corresponding obligation to consult the use of individual contractors and the purchase of services from other undertakings, which will impact the workforce situation. This consultation obligation applies annually, and when one of the parties requires so.
Further amendments to the WEA
In June 2023, the government proposed a series of amendments to the WEA, aiming to secure more safe and predictable working conditions and implement EU directive 2019/1152. This came into force 1 July 2024.
New requirements to employment contracts
Firstly, there was an expansion of the list of required information in the employment contract, including:
- If there is no fixed workplace, the employment contract must specify that the employee may work at different locations or have the freedom to decide where they will work.
- Employers were already obligated to inform of the employee’s right to holiday, holiday pay, and the rules for determining holiday time in the employment contract. This requirement was expanded correspondingly to other paid absence 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 must specify 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, the employment contract must include information of the identity of the hiring company.
- The employment contract shall specify the right to training provided by the employer, if any.
- Any benefits related to social security offered by the employer, as well as the names of institutions receiving payments from the employer in this regard, must be stated in the employment contract.
This has effectively meant that all employees are under an obligation to revise and redraft their employment contract/templates.
Certain additional information must be included in employment contracts of employees sent abroad to work.
The timeframe for presenting a written employment contract was reduced from one month to seven days. Similarly, the deadline for implementing changes to the employment contract was shortened from one month to the same day that the changes take effect.
Furthermore, two presumption rules entered into force. The first rule stipulates that if the employer has not explicitly stated in the employment contract that the employment relationship is temporary, it will be presumed to be permanent, unless other grounds are shown to be highly probable. The rule aims to formalise existing law and does not entail any material changes.
The second rule applies when the employer has not provided information regarding the position’s scope (the full-time equivalent percentage). In this scenario, the employee’s own assertion concerning the position’s scope will be presumed and enforced, unless other grounds are shown to be highly probable.
New rules for probationary periods
Under the previous rule, a probationary period of up to six months can be agreed upon. Pursuant to the new regulations that entered into force 1 July 2024, the maximum duration of a probationary period will be limited to half the length of the employment relationship if it is temporary and shorter than 12 months.
Additionally, a new rule regarding the probationary period when an employee’s contract is renewed for the purpose of continuing in a position essentially similar to the previous position with the employer has entered into force. In such cases, the renewal itself will not permit a new probationary period. The amendment is a codification of current law and does not entail any material changes.
Nonetheless, in the event of renewing an employment contract for permanent employment, it is still permitted to agree upon a new probationary period if the combined duration of the employee’s prior employment and the new probationary period does not exceed six months. This rule is ultimately aimed at situations where the employee has had a short-term temporary employment (with an even shorter initial probationary period) and he/she is subsequently offered a similar permanent position.
Request for more predictable and safe working conditions
A new rule providing part-time or temporarily employed employees the right to request a form of employment with more predictable and secure working conditions has entered into force. The employer is obligated to provide a written response to such request within a month. This right only applies to employees who have served at the employer for more than six months, have fulfilled any probationary period, and if more than six months have transpired since the employee’s last request.
There has recently been a large amount of new case law in the employment-law area from the Norwegian Supreme Court. The most interesting cases are referred to here.
Repercussions of collective agreement
Ten employees working at a nursing home in Oslo received a wage supplement arising from a collective bargaining agreement entered into in 1998. In 2014, a new collective bargaining agreement was entered into, which did not contain a clause about the wage supplement. Therefore, the employer stopped paying the supplement. However, the employees disputed the legality of this.
In June 2021, the Supreme Court held that the rights arising from the collective bargaining agreement were transformed into individual rights, which did not lapse when the collective bargaining agreement was terminated.
Consequently, the Supreme Court concluded that the supplement had to be regarded as part of the individual employee’s employment contract. The employer was not permitted to stop the payment of the wage supplement.
Dismissal after violation of “snooping prohibition”
A healthcare worker was dismissed after she, without service needs, read the medical record of her partner’s ex-wife, who was a patient at the hospital. The healthcare worker contested the dismissal.
The Supreme Court ruled that the dismissal was lawful, and that the snooping was a violation of the Health Personnel Act. The Court held that compliance with the act is crucial to life and health, and that the violation was a serious breach of duty. The strained relationship between the healthcare worker and the patient, coupled with their continued communication via text messages even after the offense was uncovered, intensified the severity of the breach of trust.
Illegal salary deduction
The starting point in Norwegian law is that the employer cannot make deductions from the employees’ salary, except in specific cases listed in WEA Section 14-15, including when the employer’s right to make deductions is stipulated in advance by a written agreement. The Supreme Court’s ruling of December 2021 clarifies the content of this exception, deciding that general provisions allowing employers to make future deductions from employees’ salaries to correct previous incorrect payments are not permitted Consequently, agreements on deductions are only permitted if it specifies the relevant deduction to such an extent that the employees’ predictability with regard to his/her pay is conserved.
In this specific case, the agreement on deduction was general, and was entered into long before the deduction took place. Consequently, the wage deduction was not sufficiently specified. The Supreme Court held that the deduction was illegal.
Employer not obligated to facilitate for employee with reduced work capacity by creating a part-time position
An employee working as a multimedia producer, had for a period of ten years been wholly, or partially on sick leave. In 2019, it became clear that the employee’s ability to work was permanently reduced by 50 percent. The employer argued that it would be challenging to let the employee continue in a permanent half-time position and terminated the employee.
The WEA states that the employer, as far as possible, shall implement necessary measures to enable an employee who suffers from reduced capacity for work to retain or be given suitable work.
Even though the duty to facilitate is far-reaching, it does not necessarily imply that the employer has to establish a new, permanent part-time position for the employee. In case this implies permanent changes in the organisation or job structure at the employer, the Supreme Court held that there must be weighty reasons before the WEA impose the employer an obligation to offer the employee a permanent, part-time position.
The Supreme Court concluded that the termination of the employee was lawful as it would be very challenging for the employer to facilitate for a part-time position.
However, the decision does not as such excuse employers on a general basis from a possible obligation to offer a permanent part-time position instead of terminating an employee. This must be assessed specifically in each case.
Woman without formal teacher training not entitled to permanent employment
As none of the applicants to a school in Norway met the qualification requirements, woman without formal teacher training pursuant to the Education Act, was temporarily employed. After the woman had worked at the school on a continuous basis for three and a half years, she claimed permanent employment with the municipality in accordance with the WEA.
However, the Supreme Court ruled that an employee who does not meet the statutory qualification requirements in the Education Act is not entitled to permanent employment after the WEA.
Employer not permitted to make deductions from employees tip
The Supreme Court ruled that an employer’s deductions from the employees’ tip to cover imposed employer’s contributions and administrative expenses related to the tip were illegal.
Beginning in fiscal year 2019, employers were required to pay employer’s contributions and administrative expenses of the employee’s tip. To offset these expenses, two employers in Oslo deducted these expenses from the employees’ tip.
However, the Supreme Court ruled that the deductions were unlawful, stating that the employees were entitled to the tip. The Court held that the tip was a payment from the guests to the employees, not the employer. However, employers are still permitted to enter into agreements with the employees of such deductions.
Late enrolment in occupation pension scheme subject to partially limitation
The case involved a musician who had been performing concerts for a parish council at cathedral in Tromsø for several years. In 2022, the Court of Appeal ruled that the musician was permanent employed at the parish council since 2011.
Subsequently, the musician claimed that he was entitled to enrolment at the parish’s occupational pension scheme from 2011. The parish council disputed this claim, arguing that the enrolment was subject to limitation pursuant to the Limitation Act.
The Supreme Court ruled in favour of the parish council. Consequently, enrolment in the pension scheme could only occur three years prior to interruption of the limitation. In the musician’s case, enrolment therefore took place from 2018.
Whistleblowing in the Workplace
In late 2023, the Norwegian Supreme Court issued a ruling (in case HR-2023-2430-A) that might have significant implications for whistleblowing in the workplace.
The case involved a shop steward who assisted a work colleague in a meeting with an HR manager, during which the colleague was given a written warning for referring to his immediate manager as an “idiot.” The colleague disputed the warning and the shop steward sent an email to a manager in the company, criticising the HR manager’s behaviour in the meeting. The shop steward then received a warning of his own. The basis for this written warning was that the shop steward had allegedly violated the requirement for considerate conduct according to labour regulations. The shop steward was later relocated. In a subsequent court case concerning the validity of the relocation, compensatory damages were also claimed under Section 2 A-5 of the Working Environment Act (“WEA”) for retaliation after whistleblowing. The compensation claim was limited to the question of whether this email to the management was considered as whistleblowing under Section 2 A-1 and Section 2 A-2 of the WEA.
The Supreme Court concluded that the email met the requirements for whistleblowing. It was considered decisive that there were reasonable grounds for the employer to perceive the email as reporting issues of concern in the company. The email expressed more than just the shop steward’s disagreement with the company’s warning to the colleague. It referred to behaviour contrary to the company’s work regulations on considerate and correct conduct, and therefore, described an issue of concern in the company. The Court of Appeal’s judgement, which concluded that the email was not to be considered as whistleblowing, was set aside.
The Supreme Court gave the concept of whistleblowing (as used in Section 2 A-5 of the WEA) a wide application. The ruling presents a challenge for employers to distinguish between general criticism and whistleblowing. The judgement, therefore, emphasises that employers must make thorough assessments when they receive critical statements from employees, regardless of the form in which the statement is made. This may particularly cause doubt in cases where it is not explicitly stated that the statement is intended to be regarded as whistleblowing.
Obligation to offer the employee other suitable work if the dismissal was caused by circumstances related to the employee?
In 2024, the Supreme Court delivered a ruling that clarifies and underlines that, in principle, an employer may be obligated to offer the employee other suitable work even in the case of dismissal due to circumstances related to the employee.
The case involved a healthcare worker in the Oslo municipality who was dismissed after the Norwegian Board of Health Supervision revoked his authorisation. The healthcare worker argued that the dismissal was unfair because Oslo municipality had not offered him another suitable position.
In cases of termination based on circumstances related to the employee, the Working Environment Act does not explicitly state that the employer has a duty to (try to) relocate the employee first. The Supreme Court addressed if an obligation to offer other suitable work in cases of dismissal based on circumstances related to the employee.
The Supreme Court assessed that, depending on the circumstances, there may be a limited and situation-specific obligation to offer other suitable work. The core area for this obligation is cases where the employee is not to blame for the dismissal. Whether the employer has a duty to offer other suitable work will ultimately depend on whether the employee’s interest in continuing in another position within the company is particularly strong. This might be the case, for example, when there are significant social considerations that make it difficult for the employee to find new employment. Additionally, an obligation to offer other suitable work requires that there is another appropriate position available within the undertaking. However, the Supreme Court stated that the threshold for deeming a termination as unjustified due to the lack of an offer of another suitable position will be high.
The Supreme Court, in this case, concluded that the employer was not obligated to offer the healthcare worker another suitable position, and that the dismissal was objectively justified.
Principles for final settlement in cases of misclassification of employees as contractor
In December 2024, the Supreme Court issued a ruling clarifying the risks that companies face due to incorrect classification of workers. The ruling also clarified issues regarding the determination and limitation of monetary claims.
The case involved three healthcare workers who had been wrongly classified as contractors (rather than employees). The case concerned the financial settlement resulting from this misclassification.
The Supreme Court decided that the mandatory rules of the Working Environment Act should be used to calculate the additional compensation the workers were entitled to, unless a valid agreement specified otherwise, and that the burden of proof for alleged over-compensation rests with the employer. Regarding holiday pay and statute of limitations, the Supreme Court concluded that holiday pay should be calculated based on the fees de facto received by the workers and that the workers’ claims for holiday pay were not time-barred.
Employees are not covered by the National Insurance Scheme coverage during breaks in the home office
In September 2024, the Supreme Court issued a judgement clarifying that an employee working from home and is injured during breaks from work is not covered by the National Insurance Scheme’s occupational injury coverage.
The case concerned a hospital doctor who worked from home during a weekend shift. During her lunch break, she tripped and suffered permanent injuries on one foot. Pursuant to Section 13-6, second paragraph of the National Insurance Act, occupational injury coverage applies to occupational injuries that occur while the employee is working at the workplace during working hours. The Supreme Court stated that in the event that the employee is outside his or her ordinary place of work, the key question is whether the employee was “working” when the accident occurred. There must be a connection between the work and the accident.
The Supreme Court found that injuries that occur during breaks when working from home are not covered by the National Insurance Scheme’s occupational injury coverage because the employee was not “at work” when the accident occurred.
Summary Dismissal for Sexual Harassment
The Court of Appeal recently handed down a judgement regarding summary dismissal for sexual harassment towards younger co-workers. The case concerned a ship worker in a senior position who was responsible for the staff on a ship’s galley. The company, a non-profit foundation, aimed to help challenged young people between the ages of 16 and 25 without education and jobs by providing employment and training on the ship. Many vulnerable young people were, therefore, employed by the company. Five young employees had reported unwanted attention from the ship worker, which was assessed as whistleblowing. The young employees stated that the ship worker on several occasions gave them unwanted sexual attention, intimate hugs, massages, touched them on the inside of their thighs, sent inappropriate text messages, and invited them to his lugar. The ship worker acknowledged that the allegations were true, but that these were not sexual acts but acts to show care. With these acts as the basis, the company decided to summarily dismiss the ship worker.
The Court of Appeal noted that whether the employee’s actions constituted “sexual harassment” would be relevant, but that not every sexual harassment constitutes grounds for dismissal. An overall assessment of the interests of the employee and employer must be made when assessing whether the dismissal is justified. In addition, the dismissal must not appear to be an unreasonable or disproportionate reaction.
The Court of Appeal first assessed whether the actions constituted sexual harassment and stated that in order for sexual attention to be considered as sexual harassment, it must be unwanted. The actions were considered undesirable and distressing by the Court of Appeal. Although the attention provided by the ship worker was not considered to be grave, the Court of Appeal concluded that it was serious enough for any ordinary person to understand that the attention was unwanted and that the effects were distressing for those exposed to it. The court concluded that the actions constituted unwanted sexual harassment. Furthermore, the Court of Appeal assessed whether the acts were serious enough to be grounds for summary dismissal. The Court of Appeal noted that the extent and duration of the acts were of such a nature that they were serious overall. Particular emphasis was placed on the number of whistleblowers, the ship worker’s senior position and the huge age difference between the ship worker and the whistleblowers. The ship worker was 30 years older than the whistleblowers, had significantly higher rank, and the actions had taken place over several years. The Court of Appeal also clarified that a regular dismissal was not sufficient, as it would mean that he could continue working during the notice period. Although a summary dismissal is a serious sanction that requires a serious violation, circumstances such as age, rank, frequency, duration, and extent of the acts were sufficient to be defined as serious sexual harassment that gave grounds for dismissal.
