Practice Area Articles
By Magnus Lütken and Marie Berggren Hagberg
Back to International Employment Law
KEY DEVELOPMENTS FOR 2021
Temporary rules related to the COVID‑19 pandemic are likely to be reduced and/or discontinue
The COVID‑19 pandemic has had a significant impact on the Norwegian labour market during 2020. Many Norwegian employers have found themselves in a position where the customers no longer required their services, thereby resulting in a dramatic drop in relevant work tasks for their employees. As such, many employers have used the non-statutory institute of temporary lay-offs, whereby the right and duty to work is temporarily suspended, also relieving the employer of the duty to pay salary for a limited period.
As a response to the dramatic change in the market, the Norwegian Government has passed several new pieces of legislation to mitigate the economic impact both for the employers and the employees. We believe that these measures have saved many Norwegian businesses from bankruptcy, thereby also saving the jobs of the employees. However, as the pandemic hopefully slows down andsociety is able to go back to a more normal situation, these measures are likely to be reduced and/or discontinued. This will therefore likely result in legislative changes within various fields in Norway.
Reorganisation processes and redundancies
As the temporary measures resulting in economic relief for many Norwegian businesses are reduced and/or discontinued, we believe many businesses will have to implement cost saving measures. Although the Norwegian businesses were saved through the crisis, it is not unlikely that some of these businesses will need significant cost saving measures in order to regain their efficiency after the pandemic. It may also be that we experience an increase in the number of bankruptcies during the next year.
This may result in several Norwegian businesses having to implement reorganisations and potential redundancy processes within their organisation in order to be compatible and competitive in the future. We therefore predict that many employers will find themselves in need of carrying out formal processes, including consultations with employee representatives, and potentially also notifying the Norwegian Labour and Welfare Organisation where the potential scope of the redundancies exceed 10 employees over a period of 30 days.
The after‑effects of a collective bargaining agreement — new case law in 2021
There are several employment-related cases which were set to be tried in 2021. Most notably, the Grefsenhjemmet case was to be tried by the Supreme Court. The case concerns whether clauses in an expired collective bargaining agreement ("CBA") can have individual effect for the employees. Even though the specific question is whether an addition to the salary for employees with a certain length of service has become an individual right pursuant to the expired CBA, the case has a wider application. This is the first court case where the question regarding whether a clause in an expired CBA has become an individual right for the employees, which may constitute a wider principle regarding the after‑effect of CBAs.
KEY DEVELOPMENTS FOR 2020
It is currently unclear whether the Covid-19 pandemic will lead to any significant upsurge in employment-related litigation. We definitely expect some cases to make its way to the courts pertaining to e.g. redundancies, temporary lay-offs and salary reductions – we are currently involved in several such cases on behalf of our clients, and it is also possible that other types of cases will follow, including health and safety law suits and dismissals of employees that may not be willing or able to follow safety instructions and guidelines. Only time will tell, of course, and we shall follow developments closely.
Changes to lay-off rules, rules on unemployment benefits and sick leave
Changes to the rules on temporary lay-offs were introduced on 20 March 2020 to reduce the mandatory payment period (i.e. the period during which employers are obliged to pay laid off workers’ salaries) from 15 days to 2 days. As of 1 September 2020, the mandatory payment period has increased from 2 to 10 days, with payments for any additional days after the 10-day period being made by the Norwegian Labour and Welfare organisation (NAV) instead. Previously, employees who were temporarily laid off had to wait 3 days before they could receive unemployment benefits but this 3 day waiting period has now been removed. In addition, the minimum reduction of working hours required to qualify for unemployment benefits has been reduced from 50% to 40% and the minimum income needed to qualify for unemployment benefits has also been reduced to 0.75G (approximately 75,000 NOK).
Although employers are usually required to pay employees’ salaries for the first 16 days of sick leave, new legislation has been introduced to reduce the employer period from 16 days to 3 days for illnesses relating to COVID-19. The employee will still be entitled to sick pay after the 3-day period but the payments will be made by NAV instead. The rules on extended entitlement to sickness benefits will apply until the end of March 2021. In addition, the number of days that employees are able to stay home to care for their children has also doubled from 10 days to 20 days per parent, but the employer period has been reduced from 10 days to 3 days. Payments for any additional days after the 3-day period will be covered by NAV. Parents have the right to transfer days of care benefits between themselves when schools or nurseries are closed.
Further obligations in relation to gender pay gap reporting
The Norwegian Equality and Anti-Discrimination Act was amended on 1 January 2020, and now imposes further duties on employers in relation to equality and discrimination. Companies in the public sector and companies with more than 50 employees in the private sector are now obliged to report on their progress towards achieving gender pay equity and gender equality and must do so every two years. Smaller companies in the private sector (i.e. those that regularly employ between 20 and 50 employees) are also obliged to report on these issues if requested to so by employee representatives. The report must include the following information:
- a pay analysis by the employer of the gender pay gap differences across all of the organisation’s roles and levels. The analysis must calculate the proportion of women and men employed in each job category, assess the pay of employees performing the same and different types of work, identify the gender pay gap in roles dominated by female employees and in jobs predominately occupied by men, and include details on all salary components (such as fixed salary, bonus and benefits).
- details in relation to the progress made in improving gender equality across the organisation, the uptake by employees of their parental leave entitlement and the duration of leave taken, and the status of part-time employment, including the organization’s use of involuntary part-time work.
- employers must also identify the risks that could prevent the organisation from achieving gender pay equality, take measures to address these risks and then report on their impact.
KEY DEVELOPMENTS FOR 2019
Preferential rights for part-time employees
With effect from 1 January 2019, Section 14-3 of the Norwegian Working Environment Act (“WEA”) has been amended to give part-time employees a preferential right to increase their working hours within their position, rather than an employer hiring a new employee. This right is conditional upon it being possible to implement it without significant disadvantage to the employer. The amendment came into force on 1 January 2019.
Less flexibility for temporary work agencies
New provisions, which came into force on 1 January 2019, will stop the use of so-called "zero-hour contracts"; a model widely used by temporary work agencies which allows for permanent employment without any guarantee for work or pay. The new provisions require relevant employees will be provided with predictability for work and pay. If the work is to be performed periodically, the employment agreement must state when the work shall be performed, or provide a basis for calculation of when the work shall be performed. The amendment will apply to all sectors, but will have the biggest impact for temporary work agencies and other sectors regularly employing temporary workers.
Obligation to report on employees' air miles bonus points
As of 1st January 2019, a new regulation requires employers to report on employees' air miles bonus points that were acquired on work travels. Such bonus points are taxable and shall be valued at market value. Companies who have employees travelling for work by air must assess how such work travel should be handled.
KEY DEVELOPMENTS FOR 2018
The implementation of the General Data Protection Regulations in 2018 will mean employers need to familiarize themselves with the GDPR, as well as some Norway specific regulations pursuant to the Personal Data Act, to ensure compliance with these new requirements.
New Rules on Whistleblowing
New regulations require all companies regularly employing 5 or more employees to have a written whistleblowing policy. The regulation contains minimum requirements for the content of such policies.
Travel Time for Peripatetic Workers
As a result of recent case law there is limited opportunity for employers to exempt travel time to non-permanent work locations from an employee’s working time.
KEY DEVELOPMENTS FOR 2017
Developments for 2017
The top three developments for 2017 are likely to be (i) increased legal protection for whistleblowers, (ii) increased access to exempt persons with independent positions from working time regulations and (iii) increased focus on harmonization of public sector pension with private sector pension.
KEY DEVELOPMENTS FOR 2016
New legislation regarding non-compete and non-solicitation clauses
In January 2016, new legislation regarding non-compete and non-solicitation clauses in employment relationships was implemented. The new rules have significant implications for both employers and employees, introducing a maximum non-compete period of 12 months, the right to full compensation during the restrictive period, and an obligation for the employer to document specific grounds for applying the clause. The legislation requires that non-compete and non-solicitation clauses are designed differently. Employers have one year to renegotiate existing clauses.