All questions

Discontinuing employment

i Dismissal and redundancies

Section 15-7 of the WEA provides that a dismissal with notice from the employer must be objectively justified owing to circumstances relating to the undertaking, the employer or the employee.

Necessary workforce reductions owing to the company's financial or operational situation will usually be objectively justified. The employer is required to first consider less drastic measures than redundancy, for instance temporary lay-offs. When selecting redundant employees, the selection area and selection criteria must also be objectively justified, and must be applied in a just manner. Furthermore, there is a duty to consider whether suitable alternative work for the employee is available within the company, in addition to carrying out a weighing of the respective interests of the employer and the employee. Many collective bargaining agreements have provisions applicable to redundancy processes, including on the principles of selection.

The WEA distinguishes between collective redundancies and dismissals with notice involving individuals or only a few employees, and establishes specific procedures for collective redundancies. Redundancies are collective when notice of dismissal is given to at least 10 employees within 30 days without being warranted by reasons related to the individual employees. In the event of collective redundancies, the employer must inform and consult with the employees' representatives regarding specific topics that must be covered before a final decision on redundancies is made. In addition, the employer must notify the Norwegian Tax Administration and the Labour and Welfare Service of the impending redundancy. Applicable CBAs or Chapter 8 of the WEA may require that consultations with employee representatives shall take place in the event of smaller redundancies as well.

A termination based on circumstances related to the employee will in general be objectively justified if there is a breach of duty or if the employee has neglected his or her obligations as stated in the employment agreement. However, breach of the employment agreement or the employee's duties will not necessarily constitute sufficient grounds for dismissal, as the threshold for dismissal is high.

Pursuant to Section 15-14 of the WEA, the employer may summarily dismiss an employee if he or she is guilty of a gross breach of duty or other serious breach of the contract. Summary dismissal implies that the employment relationship is terminated with immediate effect.

The employer is obligated to consult the relevant employee before deciding whether to give notice of dismissal or a summary dismissal. The employee is entitled to bring an adviser to the meeting.

A decision on termination of employment shall be made only after the consultation meeting with the employee. Requirements as to the form, content and delivery of the notice of dismissal or summary dismissal also apply.

The WEA sets out requirements as to the length of the notice period if an employment contract is terminated. The notice period will be a minimum of one month calculated from and including the first day of the month following that in which notice was given. A longer notice period may apply, however, depending on an employee's age and seniority in the company, or according to the employment contract. The employee is both entitled and required to work during the notice period. Pay in lieu of notice is not allowed, unless both parties agree.

Employees are not entitled to severance pay or other termination indemnities. However, such clauses may be included in settlement agreements, which may be entered into as an alternative to a dismissal with notice.

Employees who have been employed for a total of at least 12 months during the previous two years and who are being dismissed with notice due to workforce reductions have a preferential right to new employment with the same company for a period of one year after expiry of the notice period, unless the employee is considered not to be suited for the vacant position.

The chief executive of the undertaking may waive his or her employment protection in return for severance pay, in which case the material and procedural requirements outlined above do not apply.