I Introduction

The basic legal framework in Norway for employment is the Working Environment Act of 17 June 2005, No. 62; the Civil Servants Act of 4 March 1983, No. 3; and the Holiday Act of 29 April 1988, No. 21. In addition, some employers are subject to collective bargaining agreements, which then complement the legislation. The Mandatory Occupational Pension Act, the Defined Contribution Pensions Act, the Defined Benefit Pensions Act, and the Service Pension Act are important pieces of legislation regulating employees’ pension entitlements and employers’ pension obligations and the Data Protection Act gives employers guidelines on the processing of personal information of their employees.

The Working Environment Act covers regulation of the work environment, working hours and employment protection, and applies to all employees working in Norway, including higher management and civil servants. The Civil Servants Act has some supplementary regulations only applicable to civil servants, typically special regulations concerning appointments, notice periods and restrictions against receiving non-official benefits to avoid corruption. All employees in Norway are covered by the Holiday Act, which entitles all employees to a minimum number of days of paid leave and minimum holiday pay.

Although Norway is not a member of the EU, Norway is a part of the European Economic Area Agreement, which provides for implementation of EU employment-related regulations into Norwegian national legislation.

According to the Norwegian Civil Procedure Act, any legal disputes shall as a rule be subject to negotiations under the supervision of the Conciliation Board before the case is taken to court. If a dispute regarding the validity of an employment dismissal has been negotiated between the employer and the employee at the request of the employee, however, the dispute will not be negotiated in the Conciliation Board; rather, claims shall be taken directly to court.

Any employee claims based on the Working Environment Act and Holiday Act shall be heard before the district court in the jurisdiction where the employee resides as the court of first instance. The decision from the district court can be appealed to the appellate district court of appeal. Norway is divided into six appellate districts, with one court of appeal in each district. Both the district court and the court of appeal comprise a judge president and two lay judges chosen by the parties. The hearings are verbal both during the main proceedings and during an appeal hearing. Finally, the verdict from the court of appeal can be appealed to the Supreme Court. The Supreme Court is the nation’s highest court of justice and the court of appeal for verdicts handed down by courts of a lower level. It is located in Oslo. The decisions made there are final verdicts and cannot be appealed. The one special exception is for cases that can be brought before the Court of Human Rights in Strasbourg.

The Labour Court of Norway is a special court for resolving labour disputes concerning the interpretation, validity and existence of collective agreements, cases of breach of collective agreements, claims for damages arising from such breaches and unlawful industrial action. The Labour Court has territorial jurisdiction over the whole country and is the highest court for such cases.

The Ministry of Labour is responsible for the Working Environment Act. The Norwegian Labour Inspection Authority is under the jurisdiction of the Ministry, and ensures that labour activity is in compliance with the Working Environment Act.


New rules for non-compete clauses came into force with effect from 1 January 2016. Until this date, non-compete clauses wore not directly regulated in the Norwegian Working Environment Act. Through case law it was approved that an employee could be subject to a non-compete clause for up to 12 months without compensation from the employer. As from 1 January 2016, a non-compete clause must be limited to a maximum of 12 months, and the employer is obligated to compensate the employee during the non-compete period. For employment contracts drafted before January 2016, a transition period of one year has applied and the ‘old regime’ would apply through calendar year 2016. However, as from 1 January 2017, the new rules for non-compete clauses and compensation requirements will apply for all employment contracts, including employment contracts entered into before January 2016.

At the end of 2015, a report related to change of rules related to overtime work and working time was made by a committee selected by the government. The committee suggested some changes in the prevailing working time regulation in order to make the working environment more flexible than allowed according to current legislation. The suggestion has, however, not yet ended up in a suggestion for changes by the government yet, and it may not be expected that any changes will be suggested during 2017 because of the election coming up in 2017.

During 2016, a governmental elected committee has worked with evaluations related to the age for compulsory retirement in Norway. During 2015, the retirement age was raised from 70 years to 72 years. The committee should evaluate whether the retirement age should be higher than 72 years, or removed. In December 2016 the report was finalised by the committee without advising on a higher mandatory retirement age. It is, therefore, not expected that the retirement age in Norway will be removed or raised above 72 years.



i The Directive on Temporary Agency Work

An employee of Manpower was hired out to the Norwegian Directorate of Public Roads. When the Manpower employee had to travel from his normal place of work to other offices he was paid for travel expenses and normal working hours. The employees who are employed directly by Norwegian Directorate of Public Roads are also paid for the additional time occurred as a result of extended travel. The employee claimed that he should qualify for additional payment for travel time in accordance with the Directive on Temporary Agency Work. The question was whether this additional payment should be considered as ‘salary’ covered by the Norwegian legislation that implemented the Directive. The Higher Court judged in favour of the employee and concluded that the additional payment should be considered as subject to the definition of ‘salary’ in this perspective.

ii Unfair dismissal and salary costs for the employer during the course of the trial

If an employee institutes legal proceedings, claiming unfair dismissal, the employee can, as a main rule, claim to continue in his or her position until the case is tried by the court. The court can, however, approve that the employee resign during the period up until the court hearings if the employer requests that the employee resign and if the employer has good reasons for the employee resigning immediately after the end of the notice period. The Supreme Court judged in favour of the employer in a case where the employer had good economic reasons and that a continued salary requirement towards these employees would threaten continued activities and operations for the employer. The case is significant as it may lead to reducing a number of cases raised by employees only for obtaining full salary payments for a longer period than the notice period.


i Employment relationship

All employees shall be provided with an employment contract in writing. The employment contract shall be signed by both the employer and the employee. For employment relationships longer than one month, the employment contract shall be finalised and signed as soon as possible and one month after the employment has commenced at the latest. For temporary employment relationships for periods shorter than one month and for labour contracting, a signed employment contract is required on the first day at work.

It is required that the employment contract includes the identity of the employer and the employee, position, the place of work, commencement date, duration of a temporary employment, notice period during and after the probation period, holiday regulations, the remuneration package, any applicable collective agreement, working hours, breaks and special arrangements for night work, age and flexibility of working hours in general.

Generally, any change in the employment contract requires the agreement of the employee in advance. If the employer decides to change the contract without the prior consent of the employee, the change may be considered a termination of the existing employment contract, requiring the employer to follow the formal procedures connected to an ordinary termination, namely information and negotiation, notice period, etc.

If the employer is subject to a collective agreement, some terms negotiated by the union, typically remuneration, would require renewed negotiations with the union to implement changes.

ii Probationary periods

A probationary period is permissible but not required. The probation period is limited to six months, and the notice period for both the employer and the employee can be a minimum of 14 days during the probation period.

While ordinary notice periods commence the first day in the first month following a written notice, the notice period during a probation period commences the first day after the notice is given.

The employer may prolong the notice period if the employee has been absent during the probation period and if this is described in the employment contract. The probation period will under such circumstances be prolonged by a period equal to the period of absence.

iii Establishing a presence

All companies that have employees performing an activity on their behalf in Norway will, as a general rule, be considered as employers in Norway and have corresponding reporting obligations to the Norwegian authorities. Most reporting obligations will apply irrespective of whether the individual is employed directly by the company or is hired through an agency.

A company that pays remuneration to individuals for work performed in Norway shall register with the Employer and Employee Register.

In addition, all Norwegian and foreign employment agencies are obliged to register in the Public Register of Staffing Enterprises, overseen by the Labour Inspection Authority. Companies in Norway are not allowed to use workers from employment agencies that are not lawfully registered.

Norwegian tax legislation provides that a foreign company must report any activity in Norway to the tax authorities on certain registration forms and at the same time report the names and other details of each foreign employee performing work in Norway. If the foreign company has a Norwegian contracting party, the Norwegian contractual partner has joint liability for the reporting obligations.

For the foreign company to fulfil all tax-reporting obligations in Norway, the company needs to register as an employer with the Central Coordinating Register for Legal Entities to obtain a Norwegian organisation number. Further, as of 1 January 2015 the company has a duty to report personal withholding taxes to the tax authorities on a monthly basis, since the employer is obliged to withhold personal income taxes before remuneration is paid to the employee. Personal taxes must be submitted every second month.

The level of personal income taxes to withhold is set by the tax authorities and is given on a personal tax deduction card all employees in Norway shall receive from the authorities every year. Foreign employees must register with the Norwegian tax authorities to obtain a personal identification number and a tax deduction card by attending a tax office in person. The employee’s social security contribution is included in the total taxes to withhold. The employer’s social security contribution shall also be reported to the tax authorities every month and submitted every second month. Finally, the company shall submit year-end reports on remuneration paid and taxes deducted.

Independent contractors may perform activities in Norway on behalf of foreign registered companies. However, both the tax authorities and the labour authorities will make independent evaluations of whether the individual shall be considered an independent contractor according to Norwegian legislation. Despite the contractual situation between the company and the contractor, an independent contractor may be considered as an employee according to Norwegian law, depending on an evaluation of the situation. The evaluation will typically consider whether the individual has the final responsibility for the profit and services performed in such a way that the individual is personally liable for damages, whether the individual is free to perform activities for other contractors, whether the individual is responsible for any necessary equipment, and whether the individual is free to use other individuals to complete the project for the foreign company. If the contractor is considered to be an independent contractor after such evaluation is made by the authorities, the company would be exempted from the employer’s liabilities mentioned above and the contractor will be responsible for the reporting requirements.

Nevertheless, the contractual arrangement shall be reported to the tax authorities, and the tax authorities will make a separate evaluation of whether the activity in Norway is at a level that creates a taxable permanent establishment (PE) in Norway.

In general, a foreign company that performs activities in Norway for a period exceeding six to 12 months may be considered as having a taxable PE in Norway. The tax authorities would make such evaluations based on local tax legislation and based on applicable tax treaties. A taxable PE in Norway would imply that the foreign company is obliged to file a Norwegian corporate income tax return and a statement of accounts for every income tax year so long as the PE exists.


A specific regulation on non-compete clauses was added to the Working Environment Act, with effect from 1 January 2016. The maximum length of non-competition clauses is set to be 12 months and the employee shall be remunerated with full salary from the employer during the non-compete period. Maximum remuneration is, however, set to be 18 times the basic amount. The non-compete clause must be in writing, and the employer is obliged to confirm or waive the clause upon request from the employee. If the employer confirms the clause upon request of the employee, the confirmation is binding for the employee for three months and the employer will be obliged to remunerate the employee for the non-compete period if the employee resigns during this three-month period. A non-compete clause cannot be used where the employer has terminated the employment contract because of circumstances caused by the employer, such as redundancies and restructuring.


i Working time

Working time can be set by the parties in the employment agreement. However, the working time is limited through legislation, and the Working Environment Act is the general legislation for employees. Special working time arrangements may be applicable for special occupations through legislation or collective agreements. Collective agreements may have an extremely detailed set of rules on how to calculate working hours and maximum limits.

According to the Working Environment Act, the maximum working time is 40 hours during a seven-day period. However, the working time shall not exceed nine hours during any 24-hour period. Furthermore, employees are entitled to a minimum of 11 hours’ rest time during a 24-hour period, and during seven days employees are entitled to a minimum continuous rest period of 35 hours.

Management employees or those with independent positions are exempt from the main working time regulations.

Night-time working hours, defined as the hours between 9pm and 6am, are not allowed unless the nature of the work makes it necessary. The working hours for employees working more than three night-time hours on a regular basis shall on average not exceed eight hours during a 24-hour period.

The legislation gives employers the possibility to make agreements with employees individually or with unions to exempt parts of the restrictions and regulations regarding working hours and calculation of working hours.

ii Overtime

As a starting point, any work beyond ordinary working hours is not allowed unless there is an exceptional need for overtime work. If overtime work is still carried out, the overtime shall not exceed 10 hours during a seven-day period, 25 hours during a four-week period, and 200 hours during a 52-week period. Overtime work that exceeds maximum limits must be approved in advance by the Labour Inspection Authority upon application from the employer.

Overtime work shall be compensated by the worker’s ordinary salary plus a minimum of 40 per cent additional overtime pay. Alternatively, the employer and the employee may agree in writing that the hours of overtime may be compensated for with additional time off.

iii Minimum wages

In general, there are no minimum wage requirements set out in the Norwegian employment legislation. Immigration legislation does, however, have minimum remuneration requirements in order to obtain residence and work permits in Norway. Furthermore, the minimum wage collective agreements made with the unions within certain sectors have been made applicable and mandatory for employers also not a direct part of the collective agreement with the unions. Employers within the following industries and sectors are subject to the collective agreements and the minimum wage regulations in collective agreements:

  • a construction sites (for construction workers);
  • b the maritime construction industry;
  • c the agriculture and horticulture sectors;
  • d cleaning workers;
  • e fish-processing enterprises;
  • f electricians;
  • g freight transport by road; and
  • h passenger transport by tour bus.


All foreign employees are allowed to work in Norway for a Norwegian or foreign employer, provided that the employee holds a valid work permit. There are no limitations on the numbers of foreign employees allowed in the workplace.

As a starting point, all foreign individuals must obtain a valid work permit before the commencement of work in Norway. Nationals from the Nordic countries (Sweden, Denmark, Finland and Iceland) are exempt and may commence work without a valid work permit. Other EU or EEA nationals may work in Norway without prior approval or a permit for up to three months. If the assignment in Norway exceeds three months, the employee must register with the local police for a residence permit.

A foreign worker is as a main rule protected under the Norwegian Working Environment Act. The employment contract may state that the parties have chosen the employment law of another country; however, some of the protective rules under Norwegian law may not be waived through an employment contract if the employment contract is less protective than the Working Environment Act.

Any company with employees working in Norway, whether they are Norwegian or not, is obliged to report wages and benefits to the Norwegian tax authorities, to withhold and pay personal income taxes on behalf of the employees and to report and pay the Norwegian employer’s contribution unless exemptions are given under social security agreements made between Norway and other countries. Employees must approach the tax office in person to obtain a tax deduction card, and all employees on construction sites must apply for and wear an ID card approved by the Norwegian Labour Inspection Authority.


Internal disciplinary rules are not required by Norwegian law. It is, however, common for Norwegian companies to draft internal disciplinary rules in their employee manuals to avoid all details being regulated by the employment contract. An employee manual will typically contain company regulations regarding discipline, travel, pensions and insurance, the company health service, leave regulations, working hours, holiday and holiday pay and any other special entitlements the company may choose to offer to all employees. The employee manual applicable to all employees in the company will normally include regulations that the employer is entitled to change without prior acceptance from the employees.


Employment agreements do not need to be in Norwegian, but it is recommended to have the agreement in a language that both the employer and the employee understands. Agreements in English will normally be accepted and considered as a language that is understandable for both the employer and the employee. It is, however, the employer that is responsible for ensuring that the contractual clauses are understood by the employee, and, if there is uncertainty, the clauses may not be applicable to the employment relationship in the event of a dispute.


The Companies Act of 13 June 1997, No. 44 and No. 45, states that all companies established in accordance with the acts are obliged to form a corporate assembly if the company employs more than 200 employees. The corporate assembly will have a minimum of 12 members, according to decisions made by the general meeting of the shareholders. One-third of the members of the corporate assembly shall be employees elected by the employees. The duties of the corporate assembly are to elect members of the company board, supervise the board and the general manager’s management of the company, and make a statement to the general meeting of the shareholders regarding the accounts.

It is possible to make agreements with the employees that the company shall not establish a corporate assembly, and the company’s articles of association may also stipulate a corporate assembly even if the company employs fewer than 200 employees.

The employees of a company without a corporate assembly can request that there are employee representatives on the board of the company. Such request must be proposed by a majority of the employees, and employee representatives on the board may only be requested if the company employs more than 30 people. The number of employee representatives on the board depends on the size of the company.

Membership of the corporate assembly and the board is, in general, two years, but the articles of association can determine that the period of service shall be less than two years, or longer, but the maximum period of service is four years.


i Requirements for registration

In Norway, processing of personal data is defined as any use of personal data, such as collection, recording, processing, storage and disclosure or a combination of such uses.

An employer’s collection of employee data is considered to be processing of personal data, and as a general rule all processing of personal data electronically must be notified to the Data Inspectorate. Exemptions from the notification requirements may be made for the necessary filing or registration of employee information, typically identification numbers, home addresses, details of the tax deduction cards, etc.

Registration of employee information is limited to what is relevant to the employer’s activity and business. However, employee information may never be used for purposes other than the original purpose of the collection without the consent of the employee.

It is required that the employer shall, by means of planned, systematic measures, ensure satisfactory data security with regard to confidentiality, integrity and accessibility in connection with the processing of personal data.

The employer shall not store personal data longer than necessary to carry out the purpose of the processing, or beyond the time limits given in Norwegian legislation.

If the data processing is transferred from the employer to a third party (processor), it is necessary to have a data processor agreement between the employer and the third party (processor) in writing. The third-party data processor may not process personal data in any way other than stated in the agreement, and the agreement must make the processor liable to carry out all security measures required in the Data Protection Act.

ii Cross-border data transfers

Personal data may only be transferred to countries that ensure an adequate level of protection of the data. Countries within the EEA meet this requirement. In addition, personal data may be transferred to countries licensed by the European Commission and companies in the US that are part of the Safe Harbor agreement.3 Such transfers do not have to be registered at the Data Inspectorate, nor is consent from the employee required.

Personal data may also be transferred to countries that do not ensure an adequate level of protection if the third party (processor) guaranties for the employees personal data, or if the employee gives their approval in advance.

In some situations, processing of personal data in general requires notification to the Data Inspectorate or a licence from the Data Inspectorate. To perform cross-border data transfers in these situations, such notification must include information on the transfer and a licence must include approval for cross-border transfers.

iii Sensitive data

Sensitive data is defined as information related to:

  • a racial or ethnic origin, political opinions and philosophical or religious beliefs;
  • b the fact that the person has been suspected of, charged with, indicted for or convicted of a criminal act;
  • c health;
  • d sex life; and
  • e trade union membership.

Social security numbers are not regarded as sensitive data; however, social security numbers may only be processed where there is an objective need for a certain identification and the method is necessary to achieve such identification.

As a general rule, processing sensitive data requires a licence from the Data Inspectorate.

iv Background checks

In accordance with the Working Environment Act the employer may only require that medical examinations are performed if it is stated in statutes or law, if it is necessary as the work is high-risk, or if the employer finds it necessary in order to protect employees’ health. Similarly, credit checks and criminal record checks are allowed only if objectively justified.

As information related to employees’ criminal records and health will be considered sensitive data under the Personal Data Act, there may be additional requirements for processing the information.


i Dismissal

There are two kinds of dismissals, ordinary and summary dismissals. The distinction is important in relation to the reasons for dismissal and the notice period. Both kinds of dismissal must have reasonable justification, which means there have to be specific reasons for the dismissal.

An ordinary dismissal must be based on circumstances related to the undertaking, the employer or the employee. Downscaling due to economic circumstances will normally be regarded as reasonable justification. Employee-related conditions such as bad behaviour, non-performance and breach of internal policies may also be regarded as reasonable justification.

A summary dismissal can be considered if the employee is guilty of a gross breach of duty or other serious breaches of the employment contract.

An employer may not decide to dismiss an individual without prior notification and discussion with the employee or a representative of the employee. When a decision of dismissal is made, a notice is obligatory. It must be in writing and be delivered personally or by registered letter. The notice will not be considered as delivered until it is received by the employee.

There are some requirements for the content of a notice. The notice shall typically include the employee’s entitlement to negotiations and to dispute the notice in court, due dates for such actions, the name and contact details of the employer who shall be the recipient of a claim and the possibility for the employee to maintain the position during the legal process.

If the reason for dismissal is based on the circumstances of the employer, the employee will have rehire rights. Such rehire rights shall also be included in the notice. Norwegian law has no legal requirement for severance pay. However, the employee is entitled to a full salary during the notice period, and the employee is entitled to perform work during the notice period. If the employee chooses to be relieved of his or her present duties upon an offer from the employer, the employer is still obliged to pay full salary during the notice period. The employer and the employee may enter into a settlement agreement and waive the compulsory requirements set out in the legislation.

The minimum notice period according to the Working Environment Act is one month and the maximum is six months, depending on age and seniority. The notice period runs from the first day of the month following the month the notice is given. During a probation period, the notice period can be set at 14 days.

In general, pregnant employees and employees with maternity leave, sick leave and leave for military service benefit from special protective rules for dismissals.

The protective rules for dismissals in the Working Environment Act apply to all employees at all levels. However, the employer and the chief executive can waive these rules as not applicable to the chief executive if an agreement is made in advance, typically in the employment contract. A renunciation of dismissal protection for the chief executive is only allowed if the agreement includes an entitlement to a severance payment.

It is common to settle disputes between employers and employees with settlement agreements, which are entered after consultation meetings are held, or as a part of subsequent negotiations.

ii Redundancies

The requirements for redundancies are the same as for ordinary dismissals. There must be justified reasons based on circumstances related to the undertaking. Redundancies due to economic circumstances will normally be considered a reasonable justification.

An important factor for the evaluation of whether the redundancy is considered as being justified is the selection criteria used for the employees to be made redundant. Criteria for the selection must be set in advance and must be followed for all employees. Selection criteria are often laid down in a collective agreement. The employer is also obliged to offer redundant employees other positions within the company if the employee has sufficient competence and if a position is available.

To justify the redundancy, the employer must be able to prove that the final decision has been subject to a thorough evaluation process. Therefore, it is advisable to take minutes of executive meetings. The decision should also be evaluated and approved by the board.

Redundancies shall follow the same procedure as dismissals, including discussions in advance with the employee or the representative (or both), and notice in writing with the same information as described for dismissals. If the employer is subject to a collective agreement, the collective agreement may require additional information and discussions with the employee’s representatives.

If 10 employees or more are made redundant within 30 days, special procedures for collective dismissals will apply. A collective dismissal requires that both the authorities and the employee’s representatives are informed in writing of several matters connected to the redundancy, such as the grounds for the dismissals, the number of employees affected, the number of employees normally employed, when the dismissals will take place, the criteria for the selection of employees, etc. The information must be given as early as possible and at the same time as the discussions with the employees or the employees’ representatives commence at the latest.

It is common and legitimate to enter into settlement agreements with the employee to avoid the obligatory requirements connected to a dismissal. If five employees or more are dismissed, however, all settlement agreements shall be taken into account when counting the numbers of redundant employees when the employer evaluates whether the collective redundancy procedures are required.


A transfer of an undertaking, or part of one, is governed by a special set of rules in the Working Environment Act or in collective agreements that shall protect the rights of employees in a transfer. The EU Transfer of Undertakings Directive 2001/23/EC (TUPE) is directly implemented in Norwegian legislation, and applies to all relevant transfers including mergers, acquisitions or outsourcing transactions.

The protection of employees implies that all employees employed in the organisation, or part of the organisation that is to transfer, shall enjoy the same terms and conditions with continuity of employment as was formerly the case.

A transfer of business is not accepted as a fair and lawful reason for dismissal, and a dismissal for which the sole or principal reason is the transfer itself is automatically unfair under the unfair dismissal legislation.

Both the former and the new employer are required to inform employee representatives and discuss a planned transfer with the employee representatives as early as possible. The employees’ representatives shall be informed of the reason for the transfer, when it is expected to take place, the implications for the employees, the measures that the employer expects to take in relation to the employees and the measures that the new employer expects to take in relation to the employees.


The upcoming parliamentary election in September 2017 will limit huge changes to employment legislation. Such changes are normally considered controversial, and are therefore not desired by any parties directly in advance of an election. We will, therefore, not expect huge changes in the labour law environment during 2017, despite pre-work relating to a higher mandatory retirement age and more flexibility around working hours for certain groups of employees being finalised during 2016. However, more court cases related to unfair dismissals and compensation are to be expected.

During 2016, the oil and gas sector suffered from large-scale mass redundancies. The government has tried to adapt the flexible scheme for temporary lay-off periods to incentivise employers not to terminate employment contracts on a permanent basis. If an employer foresees only the need for temporary redundancies, the employer can choose temporary lay-offs and the employees remain qualified for unemployment benefits after a 10-day period where they receive salary from the employer. As from June 2016, the employees can receive unemployment benefits for a period of 30 weeks during an 18-month period. If an employer offers work and ordinary salary for five days, the employee can continue receiving unemployment benefits for an additional 19 weeks.


1 Gro Forsdal Helvik is a partner at Deloitte Advokatfirma AS.

2 The author would like to thank her colleague Bjørn Ofstad for his assistance with Section XI.

3 The EU’s highest court ruled on 6 October 2015 that the EU–US Safe Harbor Framework for transferring personal data from the EU to the US is invalid. Present negotiations between the European Commission and US on a new Safe Harbor Framework are ongoing. It is advisable to check the status before any transfer of personal data from Norway to US, based on the Safe Harbor Framework. Other mechanisms for organising data transfer to the US, such as EU model contracts, binding corporate rules (BCR; for intra-group transfers) remain valid.