Terminating employment in Norway requires careful adherence to specific legal procedures and regulations designed to protect both employers and employees. The Working Environment Act sets forth the framework for how employment relationships can be ended, emphasizing the need for objective grounds and proper process. Understanding these requirements is crucial for companies operating in Norway to ensure compliance and avoid potential disputes.
Navigating the complexities of Norwegian employment law, particularly regarding termination, can be challenging. Employers must be aware of the different types of termination, the required notice periods, the procedural steps involved, and the rights employees have when facing dismissal. Failure to follow the correct process can lead to a termination being deemed unlawful, resulting in significant legal consequences.
Notice Period Requirements
Norwegian law specifies minimum notice periods for employment termination, which vary primarily based on the employee's length of service with the company. These are statutory minimums, and individual employment contracts or collective agreements may stipulate longer periods. The notice period typically starts from the first day of the month following the month in which notice is given.
| Length of Service | Minimum Notice Period |
|---|---|
| Up to 5 years | 1 month |
| 5 to 10 years | 2 months |
| 10 years or more | 3 months |
| 10 years or more, and employee is 50+ years old | 4 months |
| 10 years or more, and employee is 55+ years old | 5 months |
| 10 years or more, and employee is 60+ years old | 6 months |
For probationary employees, the standard minimum notice period is 14 days, unless otherwise agreed in writing. Summary dismissal (termination without notice) is only permissible in cases of gross misconduct.
Severance Pay Calculations and Entitlements
Unlike some other countries, there is generally no statutory right to severance pay (golden parachute) in Norway upon ordinary termination due to redundancy or performance issues. Severance pay is not mandated by the Working Environment Act for standard dismissals.
However, severance pay may be applicable in specific circumstances:
- Collective Agreements: Many collective bargaining agreements include provisions for severance pay, particularly in cases of collective redundancies.
- Negotiated Settlements: Severance packages are often agreed upon during negotiations, especially when an employee challenges a termination or as part of a mutual agreement to end employment.
- Company Policy: Some companies may have internal policies offering severance pay.
- Specific Situations: In cases of collective redundancies (mass layoffs), the employer has a duty to discuss measures to mitigate the consequences, which can include severance pay as part of a social plan.
When severance is provided, the calculation is typically based on factors such as length of service, age, salary, and the specific terms of the agreement or collective bargaining agreement. There is no single statutory formula.
Grounds for Termination
Termination of employment in Norway must be based on objective grounds. These grounds can relate either to the employer's circumstances or the employee's conduct or performance.
Termination with Cause (Objective Grounds)
This is the most common type of termination and requires a valid reason. Objective grounds can include:
- Redundancy (Downsizing): Due to operational necessities, restructuring, or financial difficulties requiring a reduction in workforce. The selection criteria for redundancy must be objective and non-discriminatory.
- Employee's Performance or Conduct: This requires that the employee is unable to perform their duties satisfactorily or has breached their obligations. This typically requires prior warnings and attempts at improvement or adaptation.
Summary Dismissal (Termination Without Notice)
Summary dismissal is an extraordinary measure reserved for cases where an employee has committed a gross breach of their duties or other serious misconduct. Examples include theft, fraud, serious insubordination, or violence. The breach must be so severe that it is unreasonable for the employer to continue the employment relationship even for the duration of the notice period.
Procedural Requirements for Lawful Termination
Norwegian law imposes strict procedural requirements that employers must follow to ensure a termination is lawful. Failure to adhere to these steps can render the termination invalid, even if objective grounds exist.
- Mandatory Meeting (Drøftelsesmøte): Before making a final decision on termination (or summary dismissal), the employer must hold a meeting with the employee. The employee has the right to be accompanied by a union representative or another trusted person. The purpose is to discuss the basis for the potential termination and hear the employee's views.
- Written Notice: The termination notice must be in writing and delivered personally to the employee or sent by registered mail.
- Content of the Notice: The written notice must include:
- The legal basis for the termination (e.g., reference to the Working Environment Act).
- Information about the employee's right to negotiate with the employer and the right to take legal action.
- Information about the deadlines for initiating negotiations (usually two weeks from receipt of notice) and legal proceedings (usually eight weeks from receipt of notice, or eight weeks from the conclusion of negotiations if requested).
- Information about the employee's right to remain in their position during negotiations and potentially during a court case (unless summary dismissal).
- If the termination is due to redundancy, information about the employee's preferential right to re-employment.
- Documentation: Employers should maintain thorough documentation throughout the process, including records of warnings, performance reviews, the mandatory meeting, and the delivery of the written notice.
Employee Protections Against Wrongful Dismissal
Norwegian law provides strong protections for employees against unfair or unlawful termination.
- Right to Negotiate: An employee who believes their termination is unlawful has the right to demand negotiations with the employer. This must be requested within two weeks of receiving the notice.
- Right to Sue: If negotiations do not resolve the dispute, the employee can file a lawsuit against the employer. The deadline for filing a lawsuit is typically eight weeks from the conclusion of negotiations or from the receipt of the termination notice if negotiations were not requested.
- Right to Remain in Position: In cases of ordinary termination, the employee generally has the right to remain in their position during the negotiation period and while a court case is pending, unless the court rules otherwise. This right does not typically apply in cases of summary dismissal, although the employee can challenge the summary dismissal in court.
- Remedies for Wrongful Dismissal: If a court finds a termination to be unlawful, it can either:
- Declare the termination invalid and order the employee's reinstatement.
- Award the employee compensation for economic and non-economic loss. The amount of compensation depends on factors such as the employer's conduct, the employee's length of service, age, and future earning prospects.
Common pitfalls for employers include failing to have objective grounds, not following the correct procedure (especially the mandatory meeting and written notice requirements), insufficient documentation, and discriminatory selection criteria in redundancy cases. Adhering strictly to the Working Environment Act is essential for lawful termination in Norway.
