In Norway, a written employment agreement is a fundamental requirement for all employment relationships, regardless of the duration or nature of the work. This contract serves as the primary document outlining the terms and conditions of employment, providing clarity and legal protection for both the employer and the employee. Adhering to the specific requirements of Norwegian labor law is crucial for compliance and to avoid potential disputes.
Ensuring that employment agreements are compliant with the Working Environment Act and relevant collective bargaining agreements is essential for companies hiring in Norway. A well-drafted contract not only fulfills legal obligations but also sets clear expectations regarding roles, responsibilities, compensation, and working conditions, contributing to a stable and productive working relationship.
Types of Employment Agreements
Norwegian law primarily distinguishes between two main types of employment agreements: indefinite (permanent) and fixed-term. Indefinite employment is the standard and preferred form, offering employees greater security. Fixed-term employment is only permitted under specific, limited circumstances defined by the Working Environment Act.
| Contract Type | Description | Permissible Circumstances |
|---|---|---|
| Indefinite | Standard, permanent employment with no predetermined end date. | The default and preferred type of employment. |
| Fixed-Term | Employment for a specific period or for the completion of a specific task. | Permitted only for: work of a temporary nature, work as a substitute for another person, practical training, work with participants in labor market schemes, or for athletes, trainers, referees, and other leaders within organized sports. |
Repeated fixed-term contracts with the same employee can lead to the employment being considered indefinite if certain conditions related to duration and nature of work are met.
Essential Clauses
Norwegian law mandates that all written employment agreements must include specific information. While additional clauses can be included, these core elements are legally required:
- Identification of the employer and employee.
- Place of work. If there is no fixed place, the contract must state that the employee works at various locations and specify the employer's registered business address.
- A description of the work or the employee's title, rank, or category.
- The start date of employment.
- Expected duration if the employment is fixed-term, and the basis for the fixed term.
- Probationary period, if applicable.
- The employee's right to holiday and holiday pay, and the rules for calculating holiday pay.
- The employee's salary, including supplements and other remuneration not included in the salary, the payment method, and payment frequency.
- Length and timing of the agreed daily and weekly working hours.
- Length of breaks.
- Agreement on any special working arrangements (e.g., shift work, night work).
- Information about any collective agreements that regulate the employment relationship.
- The agreed notice periods for termination.
Probationary Period
A probationary period can be agreed upon in the employment contract. The purpose is to allow both the employer and the employee to assess suitability for the role and the workplace.
- The maximum duration for a probationary period is typically six months.
- For employees covered by a collective agreement, different rules regarding the length and conditions of the probationary period may apply.
- During the probationary period, the rules for termination are slightly different, often allowing for termination with a shorter notice period (typically 14 days, unless otherwise agreed or stipulated in a collective agreement) and based on the employee's suitability, skill, or reliability.
- Termination during probation must still be objectively justified and follow procedural requirements.
Confidentiality and Non-Compete Clauses
Restrictive covenants such as confidentiality and non-compete clauses are permissible in Norway but are subject to strict limitations and enforceability rules under the Working Environment Act.
- Confidentiality Clauses: These are generally enforceable to protect legitimate business interests, covering trade secrets and sensitive company information. They typically remain in effect during and after employment.
- Non-Compete Clauses: These clauses restrict an employee's ability to take a position with a competitor or start a competing business after leaving the company. Their enforceability is limited:
- They must be in writing.
- They can only be invoked to protect the employer's specific knowledge about customers or business secrets.
- The maximum duration is 12 months after termination.
- The employer must provide compensation to the employee during the restricted period, typically based on the employee's salary.
- A non-compete clause cannot be invoked if the employee is dismissed without just cause or if the employer terminates the contract without valid grounds.
- Specific rules also apply to non-solicitation clauses (restricting contact with customers or employees).
Contract Modification and Termination Requirements
Any significant changes to the terms of an employment contract generally require mutual agreement between the employer and the employee. Unilateral changes by the employer that amount to a substantial detrimental change in terms are typically treated as a termination of the existing contract and an offer of new employment, requiring the employer to follow the rules for lawful termination.
Termination of an indefinite employment contract by the employer must be based on objective grounds related to the employee's conduct or the employer's operational needs.
- Notice Periods: Statutory notice periods vary based on the employee's length of service, ranging from one month for less than five years of service to six months for 10 years or more of service. Longer notice periods can be agreed upon in the contract or stipulated in a collective agreement.
- Termination Process: The process typically involves a meeting with the employee to discuss the potential termination, followed by a written notice of termination. The notice must meet specific formal requirements and inform the employee of their rights, including the right to negotiate and the right to take legal action.
- Summary Dismissal: In cases of gross misconduct, an employee can be summarily dismissed without a notice period. This is a severe measure reserved for serious breaches of duty.
- Termination by Employee: Employees can also terminate their employment by giving notice according to the agreed or statutory notice period.
