Employment And Labour Law In Norway

• Published date: 07 September 2023
• Subject Matter: Employment and HR, Privacy, Contract of Employment, Unfair/ Wrongful Dismissal, Redundancy/Layoff, Employee Rights/ Labour Relations, Data Protection
• Law Firm: Dalan Advokatfirma
• Author: Mr Svein Steinfeld Jervell

1. INTRODUCTORY REMARKS

1.1 Introduction

Norwegian employment law (also called labor or labour law) is based on the principle of contractual freedom, though with statutory regulation in certain areas to ensure worker protection. Statutory regulation follows first and foremost from legislation - mainly the Working Environment Act - though it may also follow from collective bargaining agreements, given that such agreements apply to the employment relationship.

1.2 Norwegian employment law - some key traits

1. Employers must as a main rule attract labour through permanent employment, as legislation limits when employers may employ workers on a temporary basis or when employers may attract labour through other means (independent contractors, hiring in from temporary work agencies etc.)
2. Statutory minimum wage is confined to certain sectors such as the building industry, cleaning industry, ship building industry agriculture and horticulture, hotels, restaurants and catering and freight and passenger transport.
3. The Working Environment Act contains strict rules when it comes to working time, holiday, overtime and overtime pay. The regulation goes further in some areas than what follows from the Working Time Directive (2003/88/EC) and other relevant EU-regulation. Compliance with working time etc. is monitored by the Norwegian Labour Inspection Authority. Remedies in case of non-compliance are orders, coercive fines, halting of work or administrative fines or penal provisions.
4. The threshold for dismissal is high and is cause-based Dismissal with notice requires a just cause, and summary dismissal requires a serious breach of contract. There are furthermore strict procedural rules that the employer must adhere to in the dismissal process. Those include requirements as to the form of the dismissal letter and a mandatory consolidation meeting before the decision of dismissal.
5. Even though collective bargaining agreements are entered into on a voluntary basis, many employers and employees are bound by such agreements.

1.3 Sources of regulation

Most employment relationships in Norway are governed by the Working Environment Act, with the main exceptions being employment relationships within central government (governed by the Civil Servant Act) and employment relationships onboard ships (regulated by the Ship Labour Act).

Certain elements of the employment relationship are regulated by other acts, such as the Personal Data Act, the National Insurance Act, the Act of General application of Collective agreements etc, the Holidays Act, the Industrial Disputes Act and the Civil Service Disputes Act.

A secondary source of regulation is different collective agreements between employer or employer organizations on one side and unions on the other side. Collective agreements are entered into or renegotiated voluntarily by the parties, though one party may exert pressure through industrial dispute means such as strikes, to force through a collective agreement.

A third source of Norwegian employment regulation is EU-regulation. Norway, as a part of The European Economic Area (EEA), has implemented most EU-regulation as part of Norwegian law. Examples include, the Posted Workers Directive (96/71/EC), the Working Time Directive (2003/88/EC), the Collective Redundancies Directive (98/59/EC), the Temporary Work Agency Directive (2008/104/EC), the Directive of the Transfer of Undertakings (2001/23/EC) and the Directive of General Data Protection Regulation (GDPR) (EU 2016/679).

1.4 Application of Norwegian Employment regulation

Norwegian employment law applies to employment relationship with a sufficiently close connection to Norway.

Disputes in international employment relationships may thus only be brought before Norwegian courts if the facts of the case have a sufficiently strong connection to Norway. Such connections would presumably be established if the employer is registered in Norway or if the employee's place of work is in Norway.

Norwegian case law has established the rule of closest connection when deciding the applicable law. Relevant criteria in the assessment is place of work, the wording and language of the employment contract, in which country the employment relationship is entered into, as well as the parties' behaviour during the employment relationship.

1.5 Collective agreements

An employer is bound by a collective agreement upon entering into such with a union or through membership in an employer's association bound by such agreements. The application of the collective agreement is primarily confined to the union members amongst the employees.

Even though collective agreements are voluntarily established, such agreements are often reached through pressure from Unions through strike or other means of labour dispute.

Collective agreements often contain provisions on working time, pay, leave of absence (with or without pay), worker participation and co-determination. Legal disputes concerning collective agreements, rights which arise from such agreements or labour dispute means are resolved by the Labour Court.

2. CONSIDERATIONS BEFORE EMPLOYMENT

2.1 Employer obligations

All employers are obligated to register in the NAV State Register of Employers and Employees. The register contains information relating to employment arrangements and provide NAV with information needed for certain of its tasks.

Employers are required to provide occupational injury insurance for its employees and occupational pension for employees apart from employees who work 20 % part-time or less. Employers must furthermore pay national insurance contributions. The amount is usually 14,1 % calculated based on pay. The percentage is lower in certain parts of Norway.

For foreign companies establishing employment relationships with basis in Norway, it might presuppose establishing a branch (so-called NUF) or alternatively a separate Norwegian company.

2.2 Foreign employees

Foreign employees must be registered in Norway in order to perform assignments here.

• Employees from countries outside EU/EEA must obtain residence permits before gaining entry.
• Employees from EU/EEA must register themselves.
• For so-called posted workers; workers sent by their employers to Norway for time-limited work assignments, special provisions apply.
• INPAT

Foreign workers would generally be entitled to the same social benefits, including 100 % sick pay and accruement of pension rights, as other employees.

3. CONSIDERATIONS UPON EMPLOYMENT

3.1 Permanent or temporary employment

Even though employees, as a main rule, must be employed on a permanent basis, temporary employment may be agreed upon,

• for work of temporary nature,
• for work as a temporary replacement for another person or persons
• for work as a trainee
• with participant in labour market schemes under auspices of or in cooperation with NAV
• with athletes, trainers, referees or other leaders within organized sports,
• for a maximum period of twelve months. Such agreements may apply to a maximum of 15 per cent of the employees of the undertaking, rounded up, but temporary appointment may be agreed upon with at least one employee.

Employees who have been temporary employed three consecutive years in the above-mentioned exceptions or for four consecutive years, given that the employment is based on work of a temporary nature, shall be deemed as permanently employed. The same applies if the employment relationship, for other reasons, no longer can be grounded in the listed exceptions.

Temporary engaged employees who, owing to circumstances relating to the undertaking in not offered continued employment, have a preferential right to new appointment at the same undertaking, unless the vacant post is...