Employment Law

Our employment law lawyers offer comprehensive services within the area

We can assist both private and public businesses in most employment law issues, including start-up, day-to-day operations, business transfers and restructuring, until termination of the working relationship.

Employments and employment contracts

Permanent employment is the general starting point in Norwegian law, but in cases where the statutory conditions allow, temporary employment is possible. It is important to note that a probationary period can be agreed for both types of employment. A probationary period must be agreed in a written contract, and a natural place to do so is the employment contract.

The Norwegian Working Environment Act sets clear requirements to what information an employment contract must contain. In addition, it is important to clarify further issues of relevance between the parties in contracts. The wording of the job description might, for example, have implications for the employer's managerial prerogative with regard to future modification of the content and tasks of the position. 

 

Dismissals

The Working Environment Act define detailed rules for procedures in connection with dismissals. The employer must have factual cause, and dismissals must be written according to the regulations set. The dismissal process must also follow case management rules and deadlines set.

An alternative to dismissal or summary dismissal may be a severance agreement where the employer and employee agree to terminate the employment contract. In the event that a severance agreement is entered into, it is important that the agreement is formulated in a way that prevents conflicts later on.

Restructuring, down-sizing and lay-offs under the Norwegian term "permittering"

When restructuring is being done employer must adhere to strict requirements. The requirements do not only regard the process and proceedings in question, but also information for employees and their representatives. Clear communication is essential for smooth implementation of change processes.

We assist in connection with minor and major restructuring and downsizing processes and draw up a bespoke plan for each individual case. We offer a combination of operational and legal assistance in respect of employment issues as well as tax law advice.

In situations of a more temporary kind the company may find it necessary to temporarily relieve the employee of his/her obligation to work. Valid grounds for lay-offs include a lack of orders, a natural event, fire, financial crisis of a temporary nature, etc., i.e. conditions associated to the business, and not the employee. During a lay-off operation the employee is exempted from the duty to work and the employer is relieved from the obligations to pay salary. It is a fundamental requirement that the loss of work for the company is considered to be of a temporary nature. 

Hiring in and hiring out labour

Hiring in workers, ordering services from self-employed people or execution of a contract raises various issues that it is important to address.

In connection with hiring in of labour, for instance through recruitment agencies, certain conditions must be met. A person hiring in also has joint and several responsibility for ensuring that the hired employee receives the pay and working conditions he / she is entitled to. If the hiring is illegal the person hired in may demand compensation and and demands for permanent employment. Enterprises which are regarded as recruitment agencies will be subject to a number of obligations and conditions. 

International employment

In connection with overseas postings, it is important to comply with all the requirements in laws and regulations. Regardless of whether it is a case of a Norwegian company posting employees abroad or a foreign company stationing employees in Norway. For example, Norwegian employees being posted overseas for a stay lasting more than one month must have a separate employment contract drawn up that ensures compliance with a number of special requirements.

Moreover, it must be clarified what pay and working conditions the employee is entitled to in both their home country and the country the employee is stationed in, including pay, working hours, pension and insurance schemes. In this respect it is important to note that different requirements apply if the employee is going to be stationed within the EU / EEA. Posting employees overseas also raises tax and welfare law issues, for both the company and the employee. In connection with "cross-border work" questions may also arise regarding choice of law, i.e. which country's laws are to be applied.

You can read more about our global employment legal services here.

Salaries and bonus arrangements

Based on the contractual freedom that exists in Norway, salaries are negotiated and agreed between employer and employee. In practice, pay levels are determined through collective agreements in both the public and the private sectors. In some cases, the pay levels in these collective agreements may also have a direct impact on pay for people who are not party to the agreement.

However, fundamental principles of Norwegian contract law entail that there is a threshold for entirely unreasonable and unacceptable terms and conditions. Pay at the unacceptable salary threshold is referred to as social dumping.

Minimum pay and social dumping

Social dumping is a term used to describe cases where foreign workers performing work in Norway receive significantly lower pay and inferior working conditions than Norwegian workers. Even though we do not have a general minimum-pay in Norway, some industries have introduced a minimum-pay to make sure this does not happen.

The various areas are regulated by rules obliging the employer to make sure that the employees receive the minimum pay to which they are entitled. This obligation may also apply down through the contract chain for subcontractors, and joint and several liability may be imposed for pay obligations in the contract chain.

Do your subcontractors pay the right salary to their employees? Get a full view of the minimum pay in your industry with our free minimum pay calculator (in Norwegian).

Working environment requirements and HMS

The regulations lay down requirements regarding both the physical and the psycho-social working environment, and some requirements apply to anyone present in the enterprise's premises, not only the employees.

The employer has a duty, in collaboration with the enterprise's employees and their representatives, to ensure systematic follow-up of the health and safety requirements defined in the regulations. The health and safety requirements vary according to the kind of work performed in the enterprise and how risky the work is.  It is the responsibility of the employer to carry out training in occupational health and safety work. Depending on the risks, enterprises must also have an occupational health service.

Whistle-blowing

The Working Environment Act specifies special protection for whistle-blowers when an employee reports illegal or improper conduct at work. The reported wrongdoing may vary from suspected corruption to severe harassment among colleagues such that the requirements regarding a good psycho-social working environment are not met.

In this kind of situation it is important that the management is aware of its responsibility to ensure the legal protection of the employees. Both the person accused or suspected of improper conduct and the people who believe they have been treated unfairly shall have their rights protected under the law. Striking the correct balance in this phase can be crucial for the company's ability to resolve the issue in a satisfactory way.

 

Non-compete clauses

A non-compete clause is a clause that limits an employees right to

  • take up a position with another employer or
  • start up or participate in an enterprise immediately after leaving the company.

A non-compete clause can be combined with clauses that prevent the employee from taking clients from their former employer. However, in order to make use of such clauses, there are many requirements that must be met for these to be valid.

The employee handbook, working hours and the annual holiday act

The employee handbook is an important guide for the employee, and should provide information on laws, agreements, administrative provisions and other regulations that govern the rights and obligations of all employees. Management should have a clear understanding of what is regulated in the individual employment contract and what is regulated generally in the employee handbook. This may have implications on the extent to which the employer can subsequently make changes to the terms and conditions and the benefits offered to the employees.

The employees working hours are regulated by the Working Environment Act. The regulations contain among others rules in relation to employees' working hours, breaks, daily and weekly time off. However, the Act allows for flexible arrangements where employees can work relatively long hours in some periods which is counterbalanced by periods with less work at other times. These kinds of arrangements require that enterprises ensure compliance with the regulations for working hours. 

Some employees in executive or particularly independent positions may be exempted from certain provisions on working hours, including the right to overtime pay. Whether an employee holds an executive or particularly independent position must be assessed in each individual case.

In addition to regulations regarding working hours there are detailed requirements about how much annual leave employees are entitled to, and there are rules for the conditions that must be met to be eligible for holiday pay. The rules laid down in the Annual Holidays Act may be supplemented by provisions in a collective agreement.


Contact us

Hege Merete Oftedal

Advocate | Partner, Stavanger, PwC Norway

+47 952 61 029

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Stian Hasli Hansen

Advocate | Manager, Oslo, PwC Norway

+ 47 952 60 486

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