Termination of employment in Norway

Do you have employees working in Norway? If so then you should be aware of the extensive and mandatory protection employees are given according to the Norwegian Working Environment Act.  These rules are particularly important when dealing with a dismissal of an employee.

Protecting the employees’ rights

An employer is responsible for complying with the requirements of the Norwegian Working Environment Act. Employers are not allowed to agree with an employee, to terms that are inferior to those stated in the law. The strong tradition for protecting the employees’ rights may come as a surprise to many foreign employers. 

Dismissal due to the employee

When it comes to dismissals, there are different applicable rules and procedures depending on whether a termination is based on a need for redundancies or upon the employee's individual behaviour, work results, work ethics etc.

This blog will focus on the latter, i.e. the rules and procedures applied in circumstances where a termination is due to the employee.

Under Norwegian law, employees are protected against unfair dismissals. Therefore, all dismissals must be objectively justified. When determining this, a court will evaluate both the process of dismissal employed by the employer and any evaluations made by the employer prior to making a decision of dismissal.

In order to prevent a court from determine a dismissal to be unfair, it is important that the basis for the dismissal is effectively clarified and communicated at an early stage of the dismissal process.

Do it right! Download free guide: The process of dismissal in Norway

Did the employee have a fair possibility to succeed?

Before starting a termination process the employer must consider several questions.

  • Did the employee receive adequate training and coaching?
  • Did the employee receive clear information regarding the employer’s expectations, routines, ethic principles etc?
  • Were the employee’s results objectively evaluated?
  • Can the poor results be blamed solely on the employee?

When a dismissal is based on the employee’s behaviour, lack of results, illegal absence, work ethics etc., it is important that the employee gets a possibility to change the behaviour or improve the results. The employer should provide clear written warnings and allow the employee enough time to change. 

Serious breaches

In cases where an employee is guilty of a gross breach of duty or other serious breaches of the contract of employment, the employer may summarily dismiss the employee and instruct the employee to leave the work place immediately. Examples of grounds for summary dismissals are when an employee is guilty of embezzlement or if an employee leaves the job without notifying the employer. 

Protection against dismissal in the case of illness

In Norway, an employee who is absent from work due to illness may not be dismissed for that reason during the first 12 months after becoming incapacitated for work.

Protection against dismissal in the case of pregnancy, birth or adoption

An employer is also not allowed to dismiss a woman because she is pregnant. The same applies to employees who are on a leave of absence in connection with a birth or an adoption.

Consultations prior to dismissal with notice

Before making a decision regarding a dismissal with notice, the employer must discuss the matter with the employee. The employee may bring a representative to the discussion meeting.

The discussion meeting is obligatory, both in redundancy situations and in cases when an employee is dismissed for other reasons. Please note that you cannot present a notice of dismissal to the employee in this meeting.  In addition, please note that the meeting should be thoroughly documented

Also read: Calculation and payment of holiday pay in Norway

Requirements for the notice of dismissal

If after making an evaluation of the meeting an employer decides that the correct coarse of action, in the circumstances, is to dismiss an employee, a notice of dismissal is required. The working environment act lists the formal requirements with regard to the notice of dismissal.

  • The notice of dismissal must be delivered to the employee in person or be forwarded by registered post to the address given by the employee. The notice shall be deemed to have been given when it is received by the employee.

  • The notice of dismissal must inform the employee about his/her right to demand negotiations, to institute legal proceedings and to remain in his or her position
  • The applicable deadlines for requesting negotiations, instituting legal proceedings and remaining in a post must be outlined.

  • The name of the employer and the appropriate defendant in the event of legal proceedings must be stated.

  • If the employee is dismissed owing to circumstances relating to the undertaking, the notice should also contain information concerning preferential rights.

A notice letter that does not include the above-mentioned clauses, could be ruled invalid and the employee will be entitled to compensation.

Right to demand negotiations

An employee who wishes to claim that, a dismissal with notice or a summary dismissal is unlawful, can demand negotiations with the employer. This demand must be provided by the employee to the employer within two weeks after receiving the notice and must be in writing. The employer must then ensure that a negotiation meeting is held as early as possible and, at the latest, within two weeks of receiving the request.

Also read: Work permit in Norway

Consequences for the employer

Invalid dismissal

According to section 15.12 of the Working Environment Act if a dismissal is in contravention with sections 15.6 to 15.10, the court shall, if so demanded by the employee, rule the dismissal invalid.

Compensation

If a dismissal is declared invalid, an employee may also claim compensation. The compensation will be determined by the court and should be reasonable with regards to the employee’s financial loss and other facts of the case. The financial loss depends on how long the employee may be unemployed, or if he or she receives a lower salary in a new position. 

The right to remain in the position

If an employer fails to follow the procedures  as prescribed by law the employee could claim that the dismissal is unfair and institute legal proceedings. Normally this happens in the following situations: 

  • when the employer has not followed a fair procedure according to Norwegian legislation
  • when the selection criteria are unfair or have not been followed
  • when the employee has not been consulted with prior to the dismissal, or
  • when the employee has not been given a fair chance to improve the results

If an employee has instituted legal proceedings against an employer, under Norwegian legislation, an employee has the right to remain in their position. The right to remain in position means that the employee’s right and obligation to work continues. The employee has a right to be paid salary for the entire period he or she remains in position.

This right is maintained until the case has been decided by a final judgement from the court. Understandably this can be a difficult situation for both the employee and the employer, and in many situations bad for the general working environment. A court case could last for half a year or maybe more. For this reason, many employers choose to offer the departing employees severance pay, in exchange for a release or waiver of liability for all claims connected with the employment.

To summarize, it is important to follow the correct procedures from the beginning in order to avoid lengthy legal processes, employees remaining in position or expensive compensation claims.  

 

Download free practical guide: The process of dismissal in Norway

 

Need help? Visit our website to see how we can assist with labour law in Norway.