Hire in Norway

Norwegian labor law is generally employee-friendly in comparison to many other European countries and certainly the USA, for example. All employers must comply with the full terms of the Working Environment Act (WEA). It is not allowed, even with the agreement of the employee, to waive any provisions of the WEA to the detriment of the employee.

A written employment contract is required for all employment engagements. Writing up the contract is the responsibility of the employer and it should be presented to the employee no later than one month after they begin work.

An employment contract is generally entered into for an indefinite period of time. Thus, the employees have a right to continue working for the employer until the employment contract is terminated by one of the parties. Temporary and fixed-term employment may only be used in specifically defined situations, such as when the required work is of a temporary nature.

All hired employees shall be entitled to permanent employment after three years of continuous service at the employer, regardless of the basis for hiring.

An employment contract may include a trial period for up to a maximum of six months. The trial period must be regulated in the employment contract. During the trial period, the threshold for a legal dismissal with a notice period, due to circumstances related to the employee, is considered to be somewhat lower and may be based on the grounds of the employee’s lack of suitability for the work or a lack of proficiency or reliability.

Within the trial period, the notice period must be at least 14 days. The trial period may be extended if the employee is absent during parts of the trial period and such absence is not caused by the employer, provided an allowance for this has been made by a clause in the written employment contract. Additionally, the employee must receive written information about the prolongation prior to the expiration of the trial period.

In general, the maximum normal working hours must not exceed nine hours in any twenty-four hour period and not exceed forty hours in any seven day period. For some groups, such as shift workers, the normal working hours for a seven day period shall be less. Upon agreement between the employer and the employee, the maximum normal working hours can be calculated as an average over a maximum of 52 weeks. This calculation is limited to 10 ordinary hours of work per 24 hours and 48 ordinary hours per seven days. Alternative arrangements can be made by agreement between the employer and the employees’ elected representatives by means of a collective pay agreement.

The WEA also allows employees the right to flexible working hours provided this does not cause any significant inconvenience to the employer. The above-mentioned rules shall not apply to employees in senior positions or employees in particularly independent positions.

From the age of 62 years, employees are entitled to reduced working time if the reduction in working hours can be completed without significant inconvenience to the business. Furthermore, the same applies if an employee claims reduced working time for health, social or serious welfare reasons.

Overtime work and additional work must not be established as a regular system and must be performed only in extraordinary cases. Exceeding hours are subject to overtime payment. Overtime work is subject to a supplementary payment of at least 40% extra per hour.

Overtime is only permitted when there is an exceptional and time-limited need for it. Overtime cannot exceed 10 hours in seven days, 25 hours in four consecutive weeks and 200 hours during a period of 52 weeks. As a rule, the total working hours shall not exceed 13 hours in 24 hours and 48 hours in seven days. Only upon agreement between the employer and the employees’ elected representatives in undertakings bound by a collective pay agreement may this limit be extended. The above-mentioned rules shall not apply to employees in leading positions or employees in particular independent positions.

Grounds for termination include: 

• Dismissal of an employee for business-related reasons
• Dismissal of an employee because of reasons specific to the individual employee
• Collective dismissal based on objective grounds
• Resignation by the employee
• Expiration of the employee contract term or the end of the specific job
• Employer’s death, retirement or permanent illness

Collective Dismissals

Terminations stemming from economic, technical, organizational or productivity reasons 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 can be considered, provided that at least five employees are made redundant.

When an employer considers dismissing a number of employees at the same time, the employer must follow a strict procedure as outlined in the WEA. The employer must retain information and have meetings with the employees’ representatives and inform NAV (The Norwegian Labor and Welfare Administration) about the mass redundancy. The employer is required to define the selection group and specify criteria for the selection of employees, which may receive notice of termination. After the employees are informed of the collective dismissal, individual meetings must be held with each employee who might be dismissed.

Individual Dismissals

An employer may dismiss employees either with notice (discharge) or without providing notice (dismissal). Discharge with notice is the usual method of termination in Norway. Dismissal without notice (‘avskjed’) is only allowed if the employee has committed a fundamental breach of the employee contract, such as gross misconduct or disloyalty. Thus, the dismissal of an employee should be executed by an employer only in extraordinary circumstances. In both cases, the WEA outlines a procedure that must be followed prior to the employee being informed of the decision.

An employer may only give notice to terminate an employee if the decision is based on objective grounds (‘saklig grunn’). The term “objective grounds” is not defined by law, but can be either:

• Subjective personal reasons include factors such as an employee’s conduct or performance (‘personlige årsaker’); or
• Objective reasons include all discharges that are not based on subjective personal reasons e.g. redundancy, lack of work and the economic situation of the employer (‘arbeidsmangel’).

A discharge cannot be based on objective grounds if it could be avoided through alternatives such as reassigning the employee to another role. Thus, it is important for employers to investigate all the possibilities of the employee prior to making the ultimate decision to discharge them.

In individual terminations based on the conduct of the employee, there is no statutory obligation to give a written warning or to consider other suitable work for the employee. However, these circumstances are often taken into account in considering whether the dismissal was justified. Before making a decision regarding dismissal, the employer must discuss the matter with the employee and an elected representative of the employee, unless the employee does not wish this. The notice of termination itself must be given in writing.

In case of a severe breach of obligation, either party can also terminate the employment agreement for cause with immediate effect. In this case, there is no need to observe a notice period.

Workers enjoying special protection against dismissal include pregnant women, women on maternity leave and workers with particular family responsibilities.

During the trial period, the notice period is 14 days. The employment contract may allow for a longer notice period. A notice period may also be established through collective agreements. Notice of termination given during the trial period begins from the date the employee received the notice.

Notice of termination given to the employees hired on a permanent basis must be a minimum of one month. This begins on the first day of the month following the date the employee has received the notice in writing.

*In the event an employee resigns, the period of notice is never more than three months.

Agreement to use a shorter period of notice may only be reached between an employer and elected representatives if the enterprise is bound by a collective agreement.

Norway does not maintain statutory rights to severance pay. However, the employee is still entitled to their ordinary salary payment and additional contractual benefits during the period of notice in accordance with the terms of the employee agreement. Many times, an employer is bound by different collective agreements to offer severance pay to employees.

In addition, employers who are not bound by any collective agreement may choose to offer some kind of severance package including, severance pay, education, release from work duties, etc. Any severance payment according to this type of agreement is generally based on one to 24 months of salary, taking seniority, age, social factors and other factors into account. The right to such benefits is normally conditional upon the employee entering into a termination agreement whereby the employee waives the right to take legal proceedings pursuant to the WEA. A termination agreement may be outlined before the employee receives notice, or the parties may reach an agreement after notice is given.

Non-Compete Clauses

A non-compete clause may be invoked in order to safeguard the employer’s specific and particular need for protection against competition. The clause may not be invoked for longer than one year from termination of the employment.

In order to be deemed valid, a non-compete clause must be put into writing. It may not be invoked after dismissal, unless the dismissal is objectively justified or terminated on reasonable grounds.

Upon written request by the employee, the employer shall within four weeks provide a written statement of whether, and to what extent, a noncompete clause will be invoked. The employer must state their particular need for protection against competition in this statement. If the employee resigns and no binding employers’ statement already exists, the resignation shall be considered to have the same effect as a written enquiry from the employee. If the employer gives the employee notice and no binding employers’ statement exists, such a statement must be provided together with the dismissal notice.

When a non-compete clause is invoked, the employer must compensate the employee at a rate equivalent to 100% of the employee’s salary up to eight times the National Insurance basic amount. Thereafter, the employer must pay a minimum of 70% of the employee’s salary in excess of eight times the National Insurance basic amount. This calculation is made on the basis of salary earned during the previous twelve months prior to the date of notice or summary dismissal. The compensation may be capped at twelve times the National Insurance basic amount.

Deductions (up to a maximum of 50%) from the compensation may be made in respect to salary or income received by the employee during the period the non-compete clause is in effect.

Customer Non-Solicit Clauses

Customer non-solicitation clauses may only apply to customers with whom the employee has had responsibility for and contact with during the previous 12 months. The clause must be in writing and may not be invoked more than one year from termination of the employment.

Upon written request by the employee, the employer shall within four weeks provide a written statement of whether, and to what extent, a non-solicitation clause will be invoked. The statement must specify precisely which customers the clause applies to. The non-solicitation of customers’ clause becomes void if the requirement regarding this statement is not met.

Employee Non-Solicit Clauses

As a general rule, the employer is prohibited from entering into employee non-solicit agreements. The exception relates to negotiations and completion of transfer of undertakings, where the employee can enter into such agreements for a maximum period of six months.

All time spent in the service of the employer must be registered as working hours. The employer must have a routine established for the registration of working hours and employees must be informed of this routine. It is important that the recording of employees’ working hours is clear and easy to understand. As a rule, the start and end times of the day or shift must be recorded

The two main unions in Norway are the LO (Norwegian Federation of Trade Unions), representing employees, and the NHO (Confederation of Norwegian Business and Industry), which represents employers. Both unions are actually umbrella organizations which are made up by a number of smaller unions. The LO affiliated unions cover both blue and white-collar workers. They also cover both the private and public sectors. These unions are actively involved in political and judicial issues. They serve as influential bodies in the Norwegian community and social life.

Trade unions’ rights are regulated in the Labor Disputes Act. Generally, trade unions have a right to enter into collective agreements between employees and employer organizations. A Main Agreement has been developed. This is a framework agreement that contains the general rights and basic rules for workplaces. The Main Agreement is typically the foundation for most collective bargaining agreements entered into by the affiliated organizations. Collective bargaining agreements are usually negotiated every other year.

Disputes over the validity of collective bargaining agreements and disputes arising out of the collective bargaining agreements are heard by a separate tribunal, the labor court.

Employees appointed to represent the organized employees shall be elected at every enterprise where the enterprise or the employees so demand.

In Norway, employees are predominantly appointed permanently. Temporary employment is only permitted in specific circumstances, such as engaging an employee to cover someone who is temporarily absent or that the nature of the work justifies the use of a fixed-term contract. If the specific circumstances are not met, the employee is automatically considered permanently employed. Similarly, any employees who have been employed on a fixed-term contract for more than four consecutive years in the same company are automatically considered permanently employed.

In all circumstances, employees with fixed-term contracts have the right not to be discriminated against on the basis of such status.

Temporary Employment

Temporary employment on a general basis is possible under certain conditions. This allows for the worker to be temporarily employed without the employer having to justify the need for temporary employment. Such a temporary engagement may not be in effect for a period exceeding 12 months. After 12 months, the employment contract may be terminated, the employee may be employed permanently or under a fixed-term contract under the circumstances described above. If the employee is not offered a new position, the employer may not hire a new temporary employee on a general basis to perform the same type of work.

Temporary employment engagements must not exceed 15% of the total number of employees in the undertaking. However, it is always permissible to enter into such engagement with at least one employee in the company.

In all circumstances, temporary employees have the right not to be discriminated against on the basis of such status.

It is common in Norway to agree that the wages be paid once a month and directly deposited into an employee’s appointed bank account. After the wages have been paid, or immediately thereafter, the employer shall provide the employee with a pay slip. As a rule, an employer cannot make deductions from an employee’s salary or holiday pay. Deductions can only be made if they are statutory or agreed upon in writing, in advance.

The payslip (‘lønnsslipp’) should show gross salary, tax and other deductions made from the gross salary, net (‘netto’), as well as the calculation basis for holiday pay.

The Annual Holiday Act states that the employee shall receive 25 days of paid holiday each year, which amounts to four full weeks and one day. The term “working days” includes Saturdays. Many collective agreements grant extended holiday rights. Indeed, five weeks of holiday is now the general arrangement in Norway, particularly for white collar employees. Once an employee turns 60 years of age, they are entitled to an additional six working days of holiday leave.

The holiday year goes from January 1st to December 31st. As a general rule, an employee is entitled to three consecutive weeks of holiday leave during the period June 1st and September 30th.

Holiday Pay

The Annual Holiday Act entitles the employee to holiday payment, which is 10.2% of the annual wages earned the previous year. This amount increases proportionally to 12% if the employee is entitled to five weeks of holiday time through individual or collective agreement. For employees over 60 years of age who are entitled to an additional week, the holiday pay is either 12.5% or 14.3%, depending on whether the employee is entitled to five or six weeks of holiday.

The basis for calculating holiday pay is the salary received during the previous year. Generally, holiday pay is to be paid on the last normal pay day before the holiday. However, it is customary to offer holiday pay during a specific month.

Employers are not allowed to include holiday pay in the regular wage unless this is directly regulated through collective agreements.

Carry Over Rules

In Norway, it is the employer’s responsibility to ensure that the employee has taken all their holiday entitlement within the current holiday year. However, the employer and employee can agree in advance to carry forward up to 12 days’ holiday (two weeks) to the next holiday year. If employees have a contractual entitlement to holiday beyond the statutory minimum of four weeks and one day, the terms of a collective bargaining agreement or contract will carry over.

In the event of sickness employees must notify the employer immediately of their condition. The employer is normally responsible for the payment of the compensation for the first 16 days of the employee’s sickness leave, provided the employee has been employed for a qualifying period of at least four weeks. Employees are entitled to sick pay for one year. Following the employer’s period of responsibility, the National Insurance Scheme is responsible for the payment. The amount of sick pay from the Social Security is limited. The employee is entitled to 100% of their regular salary, limited to approx. NOK 561,804 per year.

There is no legislation in Norway for paid bereavement leave. Whether or not an employee is entitled to such leave and whether the leave is granted with or without pay will often be stated in an agreement (e.g. collective agreement), the employment contract or the company’s internal rules. In practice, in the absence of specific agreement most companies allow at least two days paid bereavement leave in the event of the death of a close family member.

Carers’ Leave

Children: If an employee’s child is sick, the employee is entitled to a maximum of 10 days’ leave of absence per calendar year, and 15 days’ leave if the employee is caring for two or more children. Employees who have sole care of a sick child are entitled to double this period of leave. If the child has a chronic or long-term illness or disability and there is a greater risk of the employee being absent from work, the employee is entitled to a maximum of 20 days’ leave of absence in each calendar year. Employees who have sole care of a sick child are allowed to take double this period of leave.

Close relatives: An employee caring for a close relative with a terminal illness is entitled to 60 days’ leave of absence.

Parents, spouse, cohabitant or registered partner: An employee is entitled to take a leave of absence for up to ten days per calendar year to provide necessary care to a parent, spouse, cohabitant or registered partner.

Pregnancy leave

A pregnant employee is entitled to a leave of up to twelve weeks during pregnancy. Absence because of sickness is regarded as sickness leave and shall not be deducted from the leave. The right to pregnancy leave is included within the statutory maternity benefits set out in the National Insurance Acts. Unlike the mandatory maternity leave for six weeks after birth, leave during pregnancy is voluntary and may be taken at any time during the pregnancy.

Maternity leave

After the birth of the child, the mother must take a leave of absence for at least the first six weeks. The only exception to this rule is if the employee has a medical certificate stating it is better for her to resume work.

Parental leave

Parents have the right to a total leave of 12 months, including the right to pregnancy leave and the right to maternity leave. The leave must be taken immediately after the mother’s pregnancy leave and maternity leave. In total, 10 weeks are reserved for the father as well as 10 weeks for the mother. For the mother, the first six weeks after the birth are mandatory and are included in her 10 weeks. Apart from these requirements, the parents are free to divide between them the remaining period of the entitled leave. In addition, the father is entitled to two weeks of unpaid leave of absence in connection with the birth.

The parents are entitled to compensation from Social Security for loss of wages during the first year of leave if they are employed. In addition, the employee may have a contractual right to full payment from the employer through their individual contract of employment.

Additionally, each parent has the right to 12 months of unpaid leave for each birth.

The right to a leave of absence in connection with birth also applies to situations of adoption.

There are 10 public holidays per year which are considered non-working days.