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Employment law overview Norway
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Employment law overview Norway

Introduction

Norwegian labour law generally refers to the rules and regulations governing individual and collective relationships between employers and employees. Norwegian employment law is quite employee-friendly compared to the USA and many European countries. Employers must comply with the requirements of the Working Environment Act (WEA), which is the main employment legislation. The WEA regulates matters such as employment, whistle-blowing, requirements for work environment, working hours, rights to leave, protection against discrimination, termination of employment, rights of employees in case of a transfer by undertaking and rules regarding disputes concerning termination of employment. It is not possible to waive the rules by agreement in advance, to the detriment of the employee. The WEA applies to all employees including employees in leading positions and managerial positions. To a great extent, the WEA cannot be deviated from for employees working in Norway for foreign employers. Self-employed workers are not subject to the WEA.

Key Points

  • The Working Environment Act is mandatory, and the employee may not, in advance, renounce his or her rights as provided by the law.
  • Collective agreements are quite common, and an employer/confederation for enterprises and a trade union may, where specifically stated in the WEA, enter into collective agreements that deviate from provisions in the WEA.
  • The main rule is that an employment shall be indefinite/fixed. The opportunity to enter into temporary employment contracts is limited and rather strictly regulated.
  • The employer may only terminate the employment contract if it is objectively justified. The employer has the burden of proof regarding the grounds for termination.
  • There is no statutory right to severance pay upon terminating an employment contract. Severance pay is however quite common, and must be assessed on a case-by-case basis.
  • The Constitution of 1814
  • The Working Environment Act of 2005
  • The State Employee Act of 2017
  • The National Holiday Act of 1988
  • The National Insurance Act of 1997
  • The Personal Data Act of 2018
  • The Gender Equality and anti-discrimination Act of 2017
  • The Industrial Disputes Act of 2012
  • The Act of Conclusion of Agreements of 1918
  • Case law, especially the judicial decisions of the Supreme Court
  • Collective agreements
  • Individual employment contracts

New Developments

a. Legislation

In 2017, the regulations on working hours  were changed, in terms of  reduced restrictions on evening work and a somewhat extended access to except workers from the working hours  regulations due to the nature of their position as executives or independents. Also, the regulations regarding whistle-blowing were changed. The most important changes were that almost all employers are now required to have written policies regarding whistle-blowing. It was made clear that employees are entitled to report to public authorities, anonymously, of censurable conditions.

In 2018, a new pension scheme in the public sector was introduced. The new pension scheme for the public sector is adjusted to a model more similar to most pension schemes in the Norwegian private sector. The pension scheme in the Norwegian private sector is usually a defined contribution scheme, where the employer pays a certain percentage of the employee’s salary to a pension fund. The current pension scheme in the Norwegian public sector is a defined benefit pension scheme, which gives the employee a pension equivalent to a certain percentage of their salary. The government’s aim is to ensure employees in the public sector a pension scheme that is more sustainable, and that encourages employees to work for more years. The new pension scheme for the public sector still accommodates those who have to retire early. The new pension scheme also aims to make it easier for employees in the public sector to switch to the private sector, without it negatively affecting their future pension entitlements. The scheme will be set into effect from 2020, and will only apply for employees who are born after 1963.

From 1 January 2018, a new Act on Gender Equality and Anti-Discrimination came into effect in Norway. The definition of sexual harassment is now to be based upon more objective criteria, and employers are more restricted as to which information they may gather from job seekers. The Act applies to all areas of society. Employers may not ask job applicants about pregnancy, adoption and plans to have children, ethnicity, religion and beliefs, disabilities, sexual orientation, gender identity and gender expression. The Act  also opens up for a higher degree of special treatment of men for the purpose of gender equality.

As for rest of the EU/EEA, Norway has implemented the GDPR (General Data Protection Regulation), which has involved several changes in Norwegian labour law-legislation. It is now more clearly defined as to when the employer may save data about the employees in connection with processes such as recruitment, and also after the employment relationship has ended. The employee’s right to have information about his or her registered data and the right to have this deleted or corrected, has also been clarified. Employers must be aware that not complying with the GDPR may result in significant fines from the authorities.

On 1 January 2019, a new regulation on prohibition of so-called “zero-hour” contracts and restrictions on the hiring of workers in the construction industry, will come into effect. Firstly, there will be a new and clear definition of the content of permanent employment. The definition requires, among others, that the employee is secured a certain predictability in his/her employment (e.g. a defined percentage of employment). Thus, a zero-hour contract, meaning a contract with no guarantee of work, will not comply with the proposed change. Secondly, the new regulation will involve new requirements regarding written contracts, concerning predictability with regards to when the work shall be performed. Thirdly, there will be a new regulation regarding the legal basis for temporary employment in temporary-work agencies when hiring out employees to temporary positions in the hiring company. There will be rules of transition for such contracts that already exist.

On 1 January 2020, new rules on whistleblowing at the workplace came into effect. The changes in the relevant chapter in the Working Environment Act mainly contribute to clarification on current law, but also include some material changes. Among the changes, the personnel sphere covered by the whistleblowing regulations is expanded to include students and prisoners among others, when these persons are performing work. Further the employer’s obligation to follow-up a notification on censurable conditions is now stipulated in the law. In addition, the notion of censurable conditions, in which is the scope of the rules, is exemplified in the law so as the prohibition of retaliation is defined in the law. For employers in the day-to-day work, an important practical change is related to the requirement to the undertakings notification procedures.

b. Case law

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.

The Supreme Court recently decided that traveling allowance constitutes “salary and cost coverage”, and is part of the basic working and employment conditions of a temporary agency worker due to the principle of equal treatment. A temporary staff recruitment agency hired a person to work for a company. Some days the company’s employees had to travel to a location, different than their ordinary place of work. As a compensation for travelling time to the other location, the company gave their permanent employees travelling allowance. The employee from the temporary staff-recruiting agency did not receive such allowance. The Norwegian Supreme Court concluded that this was a breach of the principle of equal treatment, as the salary allowance was to be considered as “salary and cost coverage”.

In another ruling from the Supreme Court, a dismissal of a pregnant employee was ruled void, because the employer had failed to make it highly probable that the dismissal was based on grounds other than the pregnancy. Norwegian law, which here is based on EU-law, prohibits dismissal of pregnant employees on grounds of the pregnancy. Further, pregnancy shall be deemed to be the reason for the dismissal of a pregnant employee, unless other grounds are shown to be highly probable. The burden of proof lies on the employer. The Norwegian Supreme Court’s view was that the company`s need for workforce reduction was not proven to be highly probable, and the dismissal was void. The ruling shows how important it is for employers to be able to document the assessments that have been made prior to the dismissal.

For some time now, it has been unclear whether an employee’s travel time should be considering as working time. In a recent ruling from the Norwegian Supreme Court, a police officer’s travel time was considered working time. A police officer who had traveled to different assignments considered his travel time as working hours and demanded overtime payment from the employer. The case concerned the interpretation of the notion “working time” within the meaning of Article 2 of The EU Directive on working time (2003/88/EC). The EFTA Court answered questions from the Norwegian Supreme Court. The EFTA Court noted that the concept of “working time” consists of three conditions, namely the employee must be:  1) carrying out his activity or duties; (2) at the employer’s disposal; and (3) working or at work. In their judgement, the EFTA Court considered the travel time as working time according to the directive, based on an individual assessment of the case. The Norwegian Court followed the EFTA court’s judgement, but did not grant the employee overtime payment for most of the assignments, based on an interpretation of the applicable collective agreement.

In a recent ruling, a redundancy of an employee was ruled void, because the employer had not offered the employee a suitable vacant position in another part of the company. According to Norwegian law, a termination of employment due to curtailed operations or rationalisation measures is not objectively justified if the employer has other suitable work in the company to offer the employee. The employee won the case against his previous employer, concerning whether the redundancy was unjust and should be ruled void. In this case, the employer had downsised one part of the company, and at the same time hired new employees in another part of the company. The Supreme Court stated that when a company is downsising in one part of the company, the duty to offer the employees other suitable work concerns the entire company. The Supreme Court stated that the employer should have considered whether the employee was suitable for the new vacant positions in the other part of the company, and if so, should have offered him such position, before terminating the employment. This ruling means that employers who are up-sising one part of the company at the same time as they are downsising another part, need to align the two processes.

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