A Law Guide on Termination of Employment in Norway

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A law guide on termination of employment in Norway
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The global pandemic is forcing an increasing number of companies to take extreme measures to deal with the health crisis, such as temporary closure of the workplace and implementing remote working. In businesses where teleworking is not possible, employers are put in the situation of not being able to meet their financial obligations and closure is unavoidable. Companies all over the world are implementing layoffs and restricting roles so as to cope with COVID-19. Hotel and travel businesses are the worst affected and the number of people without jobs will continue to rise. In Norway, the easing of closures and restrictions has encouraged employers to ask their laid-off staff to come back to work, but it implies making tough decisions about how to resume operations.

Being terminated from an employment is something that can happen to virtually anyone. Regardless if it is due to cutting costs to keep the company's finances in order or performance, termination of employment is sometimes necessary. If you are working for a foreign employer in Norway, you must be aware of the extensive protection that employees enjoy under the Norwegian Working Environment Act. This guide will provide you an overview of Norwegian employment law that impacts workers and employers. Keep in mind that it is a highly sensitive matter, which is why you need all the information you can get. 

In order to terminate a contract, there must be a valid reason 

It is not possible to fire an employee without having a just cause. Under Norwegian law, an employer may dismiss an employee if they have reasonable grounds to do so, which are based on the circumstances relating to the person in question or the organization. This rule is meant to strengthen employees' rights. Let us exemplify, shall we? If any of the terms of the employment contract are broken, for instance the employee does not work the agreed hours, that represents grounds for contract termination. We are not aware of any statutory provisions that indicate what type of employee conduct is sufficient to justify a dismissal. More exactly, decisions are made separately, according to the facts of each particular situation. 

The company may decide to terminate several employees at the same time in an effort to save money. In other words, to downsize. In Europe, many companies are slashing their workforces due to the global pandemic. Even if furloughing schemes provide much-needed help in terms of cushioning the economic impact of COVID-19, some have not been fortunate enough to benefit from this aid. As a rule, retrenchment is a good reason for termination of employment because the reduction of personnel is motivated by poor financial returns. Nevertheless, the company has to carefully determine which employees are to become redundant. 

There is no requirement for employers to issue a formal warning

According to the experts at Advokatmatch.no, the notice of termination of employment has to be provided in writing; otherwise, they can sue for wrongful termination. It is not legal for the employer to terminate the employment all of a sudden, without so much as providing a warning. Not only should the notice be in writing but also it must be delivered in person. It has to continue all the details pertaining to the employee's right to negotiate, the right to take legal action, and the right to remain in the current position. The final written warning should clearly state what the misconduct or performance issue is. Employers tend to provide termination notices, but they mostly do it out of compassion and tradition. Undoubtedly, they also want to avoid a costly lawsuit. 

In rare cases, an employee can be dismissed without notice of termination. This happens when there has been a gross breach of duty. Working for a competitor represents a good example. Disloyalty is punished severely and, as far as the dismissal is concerned, it is carried out in extraordinary circumstances. The misconduct is serious enough if it breaches the employment contract entitling the employer to end the employee's contract. You must be aware of what you are agreeing to when committing to an employment contract. To be more precise, you have to get a good understanding of what represents a breach of contract and what the penalty might be. If you are at fault, the company could take legal action against you, although this rarely happens. 

Severance pay is not prescribed by the law in Norway 

Severance pay refers to the amount of money that the employee receives after they have been removed from a position. It is a sort of financial compensation. Individuals can receive severance pay if they have been terminated by the employer due to organizational reasons. Attention should be paid to the fact that there are no statutory requirements relating to severance pay. This basically means that it is up to the employer whether or not they provide this type of financial compensation prior to the redundancy procedure. If the employee does receive a cash benefit, it might impact the unemployment benefits they claim. What happens is that the person does not immediately receive unemployment benefits, in spite of the fact that they are actively seeking a job

Severance pay schemes in collective agreements are available as of fee-based insurance schemes, employers having to contribute a minimum sum of money. Financial compensation is awarded in the case of redundancy, illness, or bankruptcy. It is recommended to seek legal counsel prior to signing a severance package. The agreement should be reviewed by a lawyer if there are terms that you do not comprehend. Perhaps you have specific questions related to the cash benefit and the global pandemic. If this is the case, do not hesitate to address the issues by talking to a legal professional. It is best that a lawyer negotiates the financial compensation offer. The earlier you involve legal counsel, the better. 

Finally yet importantly, termination of employment is a difficult issue no matter what side you are on. The aim is to make the transition as smooth as possible and ensure that everyone is left with a good experience. 

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