Grounds for Termination
Grounds for termination include i) Dismissal of an employee due to business related reasons; ii) Dismissal of an employee due to reasons related to the individual employee; iii) Collective dismissal based on objective grounds; iv) Resignation by the employee; v) Expiration of the contract term or end of the specific job; vi) Employer’s death, retirement or permanent illness.
Terminations based on economic, technical, organisational or productivity grounds are deemed collective when at least 10 employees have been given notice of dismissal within a period of 30 days. Other forms of termination that are not warranted by reasons related to the individual employee shall be included in the calculation, provided that at least 5 employees are made redundant.
When an employer considers dismissing a number of employees at the same time, the employer must follow a strict procedure; the employer must hold information and discussion meetings with the employees’ representatives and inform NAV (The Norwegian Labour and Welfare Administration) about the mass redundancy. The employer must define the selection group and criteria for the selection of employees, which may receive notice of termination. After the employees are informed, individual meetings must be held with the employees who might be dismissed.
A dismissal must be objectively justified due to circumstances relating to the operation of the business, the employer or the employee. This applies to both individual and collective dismissals. Before making a decision regarding dismissal with notice, the employer shall discuss the matter with the employee and an elected representative of the employee, unless the employee himself does not desire this. The notice of termination itself needs to be in writing and shall fulfill certain minimum requirements.
Is severance pay required?
There is no statutory right to severance pay in Norway. The only payment that the employee is entitled to is ordinary salary payment and additional contractual benefits during the period of notice in accordance with the terms of employment. Many undertakings are immediately bound by different collective agreements to offer employees severance pay. In addition, employers who are not bound by any collective agreement may choose to offer some kind of severance package including, for instance, job-training, education, release from the duty to work, severance pay, etc. The right to such benefits is normally conditional upon the employee entering into a termination agreement whereby the employee, inter alia, waives the right to institute legal proceedings pursuant to the Employment Act. Termination agreements may be entered into before the employee receives notice, or the parties may reach an agreement after notice is given.
Is a Separation Agreement required or considered best practice?
It is not required for the parties to enter into a settlement agreement. To obtain clarity between the parties it is, however, considered best practice.
Remedies for employee seeking to challenge wrongful termination
An employee is entitled to a negotiation meeting with the employer, but only if the employee has been notified within two weeks after the dismissal. The employee can accept or challenge the termination decision. If the employee challenges the notice of termination, the employee will be entitled to remain in his or her position until a court has settled the case, provided that the employee has finished his or her trial period. This, in worst-case scenario, may take two to three years. During this period, the employee has the right to keep working as usual and to keep receiving a salary as usual.
The Working Environment Act regulates the employee’s right to notify the employer, public authorities, the media or others in whistleblowing cases. According to Section 2-A (1) an employee has a right to notify of censurable conditions at the employer’s undertaking. The same applies to workers hired from temporary-work agencies. The employee shall proceed responsibly when making such notification, notwithstanding the right to notify in accordance with the duty to notify or the undertaking’s routines for notification. The same applies to notification to supervisory authorities or other public authorities. Retaliation against an employee who notifies pursuant to section 2 A-1 is prohibited. The same applies for workers hired from temporary-work agencies. The prohibition applies for both employers and hirers. Anyone who has been subject to unlawful retaliation may claim compensation without regard to the fault of the employer or hirer. It is recommended for the employee to seek counselling before notifying of censurable conditions. The Norwegian Labour Inspection Authority, an employee representative, or a lawyer may consult in such matters.