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Notice periods in Norway
Employment termination in Norway
Post-termination restraints in Norway
Waivers in Norway
Transfer of undertakings in Norway
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End of employment in Norway
An employment relationship may come to an end for a number of different reasons, such as an employee retiring, resigning, being dismissed, or being part of a collective redundancy process. And there are certain rules that apply in each of these situations, which both employers and employees need to be aware of.
The rules surrounding the end of employment in Norway are set out in the Working Environment Act — and we’ll go through some of the most important aspects in this section. Read on to learn about notice periods, termination procedures, post-termination restraints, and transfers of undertakings in Norway.
Notice periods in Norway
When an employee or an employer wants to end their employment relationship, they have to give the other party a certain amount of notice. In Norway, notice periods are defined in the Working Environment Act.
Notice period for employees and employers in Norway
The standard notice period in Norway is one month for either party unless the relevant collective agreement or employment contract specifies otherwise. When an employee has been in continuous employment with the same employer for a certain period, they are entitled to a longer notice period. The notice periods for both employers and employees are:
- Two months after five years of service
- Three months after ten years of service
If the employee has been employed for more than 10 years, there are some situations where the employer has to give more notice to dismiss them. They must give:
- Four months’ notice if the employee is over 50
- Five months’ notice if the employee is over 55
- Six months’ notice if the employee is over 60
In all of these cases, the notice period for employees is still three months. In Norway, the resignation notice period can never be longer than the notice period for employers.
How notice periods work in Norway
Notice periods in Norway run from the first day of the month following the month when notice is given. For example, if an employee with a notice period of one month gives notice on 16 July, their notice period would begin on 1 August and end on 31 August.
Terminating a contract during the probationary period in Norway
It’s common for employers in Norway to include a probationary period of up to six months in their employment contracts. If an employee or an employer wants to terminate the employment during the probationary period, the standard notice period is usually 14 days. A collective agreement or individual employment contract may specify a different notice period.
Severance pay in Norway
There is no statutory requirement for severance pay in Norway. However, employers sometimes offer severance pay to encourage employees to accept notice. The reason for this is that employees in Norway have the right to contest a dismissal and remain in their post until the court makes a decision on their case.
Employment termination in Norway
There are strict laws concerning employment termination in Norway. In general, an employer can only dismiss an employee if they have a legitimate and serious reason. Employers also need to give the employee the appropriate notice of termination except under very specific circumstances.
Dismissal with notice in Norway
To dismiss an employee, employers typically need to give them notice, as described in the previous section. They also need to have an objectively justifiable reason for the dismissal. Normally, this falls into one of two categories:
- Economic reasons: A company needing to adjust its operations for financial reasons is typically a reasonable ground for employment termination in Norway. However, the employer must first offer the employee alternative suitable work.
- Employee conduct: Employers can also dismiss employees for reasons relating to their behaviour or performance. In this case, the employer must first address the problem by giving the employee guidance and a fair chance to improve.
In any of the above circumstances, the employer needs to give the employee notice according to their length of service. Notice must be given in writing, either in person or by registered post.
Summary dismissal in Norway
In certain rare circumstances, employers in Norway can dismiss an employee without notice. This is known as a summary dismissal and is usually only possible when the employee has grossly neglected their duty or committed another serious breach of contract.
Negotiations and legal proceedings in Norway
Employees in Norway have the right to request negotiation if their contract is terminated. They must make their request within two weeks of receiving their notice, and the employer has to hold a negotiation meeting within two weeks of receiving the employee’s request. Both parties have the right to be accompanied by an advisor (e.g., a company lawyer or trade union representative) during negotiations.
If the employer and employee are not able to reach an agreement during negotiations, the employee can initiate legal proceedings. If their dismissal is found to be invalid, they could be due either compensation or reinstatement. Employees are typically entitled to remain in their post while negotiations and legal proceedings are underway, except in the case of summary dismissals. In this case, they usually don’t have the right to stay in their post unless the court says otherwise.
Post-termination restraints in Norway
Post-termination restraints are restrictions that employers can impose on their former employees in order to protect their legitimate business interests. There are strict rules in Norway about the post-termination restraints that employers can impose and how these should work.
Non-compete clauses in Norway
Employers in Norway can ask their employees to sign a non-compete clause, which prohibits them from working for or launching a competing business after the termination of their contract. This is only permissible in Norway if it’s necessary to protect a particular need to safeguard against competition.
A non-compete clause must be agreed in writing and can have a maximum duration of one year. Employers must also compensate their former employees during the period when the restriction applies. The standard compensation is 100% of the employee’s former salary. However, the employer can deduct up to half of this amount based on any salary earned by the employee during the restriction period.
Non-solicitation of customers in Norway
Employers can also prevent their former employees from contacting or soliciting the employer’s customers. These clauses only apply to customers that the employee in question had contact with or was responsible for during the year immediately preceding the termination of their employment.
Non-solicitation of employees in Norway
A non-solicitation of employees clause is an agreement that prevents employees from taking up employment with other undertakings. This type of agreement is generally not possible in Norway, apart from in connection with a transfer of undertaking.
Waivers in Norway
In some countries, employees can waive statutory rights as part of an agreement with their employer. However, in Norway, a waiver of rights set out in the Working Environment Act is typically not possible. An employee and an employer can’t agree on terms that are less favourable to the employee than those set out in the Working Environment Act unless the Act explicitly states that the provision can be departed from.
The exception is during a termination procedure, when employees are sometimes able to waive statutory rights related to the termination of the employment relationship as part of a settlement agreement. For example, an employee may agree to forgo their notice period in exchange for severance pay.
Transfer of undertakings in Norway
When one business buys or acquires another business, the employees of the purchased entity have certain rights under Norwegian employment law. This is known as a transfer of undertaking, and the rules that apply are set out in the Working Environment Act.
What is a transfer of undertaking in Norway?
The Working Environment Act defines a transfer of undertaking as a transfer of ‘an autonomous unit that retains its identity after the transfer’. That means that the purchasing of a business’s premises or stock would likely not count as a transfer of undertaking under Norwegian law. When a transfer of undertaking is planned, both the new employer and the old employer must inform employee representatives of the transfer as soon as possible.
Employee rights following a transfer of undertaking in Norway
In Norway, the employees of a transferred entity are automatically transferred to the new employer and retain all of their existing rights and obligations. A transfer of undertaking is not a legitimate ground for dismissing an employee. However, if the transfer results in significant changes to the employee’s working conditions, this could be deemed to be a valid reason for dismissal related to the employer.
Collective bargaining agreements and transfers of undertaking in Norway
After a transfer of undertaking, the new employer is generally bound by any collective agreement that applies. If they don’t wish to be bound by the collective agreement, they must declare this to the relevant trade union in writing within three weeks of the transfer. However, employees will retain any individual working conditions outlined in the collective agreement until the agreement expires or a new collective agreement is concluded.
If employees object to the transfer of undertakings in Norway
If an employee doesn’t want to be transferred to the new employer, they can object to the transfer. They must do this within a timeframe specified by the former employer. In this case, employees have a preferential right to any new positions that arise with the former employer for one year after the transfer.
Avoid risk and missed opportunities with our end-to-end employment solutions
There are many different ways an employment contract can come to an end. But whatever the situation, you need to understand the rules that cover the end of employment in Norway — or you could end up facing legal issues.
Our solutions ensure your business is protected from risk when a relationship with a worker comes to an end — whatever the reason. We can also help you to avoid missed opportunities by re-deploying talent where possible.
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