The coronavirus - labour law issues (updated 15 April)

We have compiled our assessments of certain practical issues for employers related to the coronavirus situation.

The situation is subject to rapid development, and everyone should stay oriented about what applies to each specific business. In the current situation, all parties in labour life must act responsibly and be pragmatic and solution-focused.

Staffing adjustments – temporary lay-offs and/or workforce reductions

Many businesses have temporarily laid off employees based on an assessment that the situation as a consequence of the coronavirus will be of a temporary nature. Now, after the situation has lasted for a while, some businesses may experience that the effects for the company's economy seem to be of a permanent nature. If such effects involve that it is necessary to make permanent adjustments of the staffing by way of reorganisations and/or workforce reduction, the conditions for termination of employment due to circumstances in the business may be fulfilled. Such processes must in such case be implemented according to the general principles for workforce reduction.

Link to labour law tips regarding workforce reduction (in Norwegian):

It should be emphasised that the fact that the business has temporarily laid-off employees, does not prevent the implementation of redundancies if it later turns out that the effects on the company's economy result in a need for staffing adjustments of a permanent nature. In such case, it is important to be aware that temporarily laid-off employees whose employment will be terminated must be summoned back to work in the applicable notice period.

It should further be emphasised that the scheme regarding "cash support for businesses", passed by the Norwegian Parliament before Easter, does not include conditions stating that businesses which are receiving such support cannot implement staffing adjustments that are considered as necessary.

Temporary lay-offs

The effects of the situation relating to the coronavirus may give basis for temporary lay-offs of employees. This will be the case if the situation results in disruptions of operations that hinder the employment of employees in an economically justified way, and it is considered to be of a temporary nature. For further information about lay-offs please see: 

Labour law tips regarding temporary lay-offs:

A significant number of temporary lay-offs have been effected in Norway in the past weeks, and a number of temporary amendments have been made to the lay-off rules. The employer's period (the period in which the employer must cover salaries after implemented lay-offs) is reduced from 15 to two days. Temporary amendments have also been made to the conditions for and increase in unemployment benefits ("Nw: dagpenger") to laid off employees from the Norwegian Labour and Welfare Organisation (NAV). Unemployment benefits can be paid to employees whose position has been reduced by at least 40 % (against normally at least 50 %) as a result of lay-off, and shall constitute 80% of the annual salary up to 3G, and 62.4% of the annual salary between 3G and 6G.

In addition, a temporary regulation has been passed on 8 April 2020 clarifying the conditions for salary compensation from NAV from day 3 until and including day 20 of the lay-off period. In this period, the employees will receive full salary upward limited to an annual salary of 6G (approximately NOK 600,000). It is important to note that the days are not counted as merely days on which the laid-off employee would otherwise not have worked, but five days per week. The periods will not be longer for employees who are partially laid off. The scheme applies to temporary lay-offs effected as from 20 March 2020. The employer can pay salary in advance in this period and be refunded by NAV in respect of the amount which is covered by the scheme – this applies to temporary lay-offs effected until 20 April 2020.

Temporary lay-off, pension and insurance

According to the pension legislation, temporarily laid-off employees shall cease to be members of the employer's collective pension scheme unless otherwise is set out in the rules for the relevant scheme. In practice, few pension schemes include provisions which allow for the membership to continue in the event of temporary lay-off. To prevent a large number of employees from suddenly being without risk coverage, having their membership periods disrupted and having to submit a new health certificate upon return to the insurance scheme, temporary legislative amendments were passed on 14 April 2020, providing a solution where the employer can let employees continue the membership without payments of pension premium/contributions or insurance premium. The employer will however have to cover the administrative costs.

Holiday

Many businesses are concerned with the possibility to instruct employees to take out holiday in the nearest future, in order to avoid extensive holiday leave during a period when business activities hopefully are picking up again. It is important to be aware that the provisions in the Holiday Act also apply in the current situation. Already agreed holiday leave can only be changed unilaterally by the employer if it is necessary due to unforeseen events. On the other hand, the employee cannot demand that already agreed holiday is rescheduled either, for instance as a consequence that it turns out to be impossible to go on planned trips. The employer determines the holiday, but this must be done after individual consultation with the employee and as a main rule at least two months before holiday is taken (unless special reasons prevent this). The employee is also entitled to take three consecutive weeks of main holiday within the main holiday period (1 June to 30 September), and to take the statutory remaining holiday of one week and one day in one batch. Many businesses have four additional contractual days of holiday (five weeks of holiday in total), and the employer may often be allowed to schedule these holidays without prejudice to the limitations in the Holiday Act.

Duty to safeguard a fully proper working environment

The employer has a general duty to provide a fully proper working environment, and will, according to the employer's right to manage, have a wide access to take necessary measures to prevent illness in the workplace. The measures must at all times be proportionate in light of the situation and in particular linked to current advice from public authorities.

Use of home office

For many businesses, it is natural that the question regarding continued use of home offices now is being raised. The recommendation is still that as many as possible should work from home. In many businesses, there are good possibilities for such solutions. If this is not possible – e.g. in order to maintain critical functions – other measures should be considered, such as extra cleaning, closure of common areas etc. The employer may instruct employees to work from home. Employees may normally not demand to work from home instead of the normal work place. Most situations related to this should be possible to solve by dialogue and flexibility from both parties.

Absence due to child care

Schools and kindergartens all over the country are still closed, but it has been notified that kindergartens may open up from 20 April 2020 and that schools may open for the lowest grades from 27 April 2020. Until that happens, a lot of employees still cannot go to the work place. For employees who cannot work from home, it has been clarified in temporary regulations that such absence will give basis for care benefits (Nw. "omsorgspenger") and statutory leave. Furthermore, it has been decided to double the number of days with care benefits (from 10 to 20 days for parents with one or two children), and reduce the employers liability to cover the first three days (from normally 10 days).

Sickness absence (including quarantine)

Covid-19 or suspicion of covid-19 (including quarantine following travels) gives basis for absence due to sickness. The employer's liability to pay sickness benefits has temporarily been reduced (from 16) to three days. It has also been decided in temporary regulations that self-certification (Nw. "egenmelding") gives basis for sickness benefits during the regular employer's period. Employers are encouraged to accept self-certification, in order to avoid that the doctors spend their capacity on issuing doctor certificates rather than fighting the virus.

Travel prohibition

Given the special situation, the employer may in our assessment prohibit the employees from travelling abroad (as the travel will imply that the employee will be quarantined and thus unable to work for a period after return). If an employee has weighty reasons for a travel, the parties should seek to find individual solutions.