There must be a ‘cause’ for dismissal under Norwegian law. For employees in the central government sector, specific rules apply that are intended to strengthen their employment protection.
Dismissals during the trial period must be based on either the employee’s lack of suitability for the work or lack of proficiency or reliability. When the employee has finished the trial period, a dismissal of the employee upon proper notice must be objectively justified on the basis of matters connected with the company, the employer or the employee.
There are no statutory provisions that specify or indicate by way of example what kind of employee conduct is sufficient to justify a dismissal. This is determined on a case-by-case basis.
An employee cannot be made redundant if the employer has other suitable work to offer. In addition, the needs of the company must be weighed against the inconvenience of a dismissal for the individual employee. The consequence of this rule is that, even if an employer has cause for dismissing an employee, the dismissal will not automatically be legal.
The selection of the employees who may be made redundant must be carried out in accordance with the non-statutory guidelines arising from case law or applicable collective agreements, or both. It is not always the employee whose position will be eliminated who will have to be dismissed. When making the selection for dismissals, the employer is required to take into consideration all the employees in the company. If the company is organised in divisions that are significantly different from each other, the employer must take into consideration all the employees within the division.
Must notice of termination be given prior to dismissal? May an employer provide pay in lieu of notice?
Notice requirements are imposed on both employers and employees. Further, to the extent possible, employers must, in advance of a dismissal, discuss the possibility of dismissal in a meeting with the individual employee, who is entitled to be assisted by an employee representative or other adviser in such meeting.
The notice period varies from one month (14 days in the trial period) to six months, depending on the employee’s age and seniority.
The employer’s notice of dismissal must also meet other requirements, including that it must be made in writing and state the procedure to be followed if the employee wishes to dispute the dismissal.
As the rules regarding dismissals are mandatory, payment in lieu of notice is only possible if the employee agrees to this.
In which circumstances may an employer dismiss an employee without notice or payment in lieu of notice?
Employees can be dismissed without notice in the event of a gross breach of duty or serious breach of the employment contract.
Is there any legislation establishing the right to severance pay upon termination of employment? How is severance pay calculated?
Severance pay is not prescribed by law in Norway. However, there is a severance pay scheme agreed between the Norwegian Labour Organisation and the Norwegian Business Confederation that applies to all employees in almost all companies with trade unions. This scheme provides for severance pay in the case of redundancy, illness or bankruptcy. Severance pay pursuant to this agreement is granted to employees aged between 50 and 67, and varies from 20,000 to 80,000 Norwegian kroner.
Severance pay is often agreed between the employer and the employee representatives before a redundancy process is carried out.
Are there any procedural requirements for dismissing an employee?
After the employee has received a notice of dismissal, he or she is entitled to demand that the grounds for dismissal be stated in writing if this is not already the case. If the employee makes such a request, the employer must comply.
Prior approval from a government agency is not required by law. However, before making a decision regarding dismissal with notice, the employer shall, to the extent that it is practically possible, discuss the matter with the employee and his or her elected representatives.
In the case of redundancies, the employer also has to comply with statutory requirements regarding information and consultations with the employees’ representatives and additional non-statutory requirements in advance of any dismissals, including assessments of whether there is any other suitable work available for employees who are considered redundant.
Under guidelines established through case law, in selecting the employees for dismissal, the employer must discuss the selection criteria with the employees’ representatives, including formal and factual qualifications, ability, age, seniority, and social and health conditions.
An employee who chooses to dispute a dismissal, will, in the main, be entitled to remain in his or her position until an amicable solution is reached or, in the case of legal proceedings, there is a final verdict from the court.
In what circumstances are employees protected from dismissal?
Employees who are sick or injured may not be dismissed on grounds of sickness or injury during the first 12 months after their period of sickness or injury started.
Pregnant employees may not be dismissed on grounds of pregnancy; employees who are on maternity, paternity or adoption leave may not be dismissed on grounds of absence for reasons related to their leave; and employees who are in the military or civil service may not be dismissed on grounds of absence for reasons related to their service.
Pursuant to the Basic Agreement, the employees’ elected representatives are given specific protection against dismissal by requiring that due regard must be given to the special position that they have in the company.
Under the whistle-blower provisions of the Working Environment Act, employers are prohibited from dismissing, or in any other way from retaliating against, a whistle-blower who has acted in good faith when reporting on alleged misconduct in the company.
Mass terminations and collective dismissals
Are there special rules for mass terminations or collective dismissals?
Yes. Before collective dismissals (involving possible dismissal of 10 or more employees within a period of 30 days), the employer must, at the earliest opportunity, enter into consultations with the employees’ elected representatives with a view to reaching an agreement to avoid employee dismissals or to reduce the number of employees who will be dismissed. For purposes of these consultations, the employer must provide the elected representatives with written notification containing information on several issues, such as the grounds for the redundancies, the number of employees who may be made redundant, the selection criteria for those who may be made redundant and the criteria for calculating extraordinary severance pay, if applicable.
The employer must also notify the Labour and Welfare Organisation of the possible mass termination, and the dismissals cannot take effect before 30 days after such notice has been sent.
Class and collective actions
Are class or collective actions allowed or may employees only assert labour and employment claims on an individual basis?
Class actions were not permitted in Norway until 2008. Before that, disputes that involved several employees were organised in alternative ways and with each claimant individually named in lawsuits, and these alternative procedures are still allowed.
Collective disputes regarding the understanding of collective agreements can only be brought to the Labour Court, and only by the involved trade union or employers’ organisation.
Mandatory retirement age
Does the law in your jurisdiction allow employers to impose a mandatory retirement age? If so, at what age and under what limitations?
Yes, under Norwegian law, employers are entitled to impose mandatory retirement ages that deviate from the Working Environment Act’s stipulated retirement age of 72. In most cases, the mandatory retirement age has been set to 67 years. With effect from 1 July 2015, the employer can set the mandatory retirement age to 70 if this is discussed with the employees’ representatives and the retirement age complies with the prohibition against discrimination based on age, which means that the retirement age must be reasonably justified by a legitimate aim, and lowering the retirement age must be an appropriate and necessary means of achieving that aim.
Further, the retirement age must meet the following three, non-statutory requirements:
A mandatory retirement age of lower than 70 years can only be set if this is necessary owing to health or security reasons.
