The corona pandemic: Labour law issues
Updated 25 January 2021
The corona pandemic has had a major impact on Norwegian working life and has led to a number of temporary rule changes.
Here we have gathered our assessments of some of the most practical labour law issues related to the corona pandemic that employers should be aware of.
Staffing adjustments – layoffs and/or downsizing
Many companies have laid off employees based on an assessment that the situation as a result of the corona pandemic will be of a temporary nature. Now, after the situation has persisted for almost a year, some companies will experience that the effects on the company's finances turn out to be of a permanent nature. If such effects imply that it is necessary to make permanent adjustments to the staff in the form of reorganization and/or downsizing, the conditions for dismissal due to the company's circumstances may be present. In these cases, such processes must be carried out in accordance with the general rules for downsizing.
Labour law tips on downsizing (in Norwegian only)
- When can the employer downsize?
- Decision-making process and procedure
- Do you always have to follow seniority?
- From layoffs to downsizing
The consequences of the corona pandemic will still provide a basis for temporary lay-off of employees if the situation leads to operational disruptions that prevent the employment of workers in a financially sound manner, and this is considered to be of a temporary nature. For ongoing lay-offs, this evaluation must be made continuously by the employer.
Employer-financed period I (the period during which the employer must cover salary after lay-offs has been initiated after notification) is set at 10 days. Furthermore, the Employer-financed period II of 5 days will be introduced from 1 March 2021 and applies to lay-offs beyond 30 weeks, meaning that all employers who have laid off an employee for more than 30 weeks as of 1 March must pay again for five days. However, the Norwegian Parliament) has asked the Government to postpone the Employer Period II until 1 July 2021.
The period during which the employer is exempt from the wage obligation has been extended several times during the pandemic, and is currently 49 weeks during a period of 18 months (which together with the employer's period I and II amounts to a total of 52 weeks). The Norwegian Parliament has announced that this limit will be extended until 1 October for companies that reach the maximum period during the spring and summer.
Temporary changes have also been made concerning the rules for unemployment benefits for the laid-off. The waiting time for unemployment benefits has been reintroduced from 1 January and laid-off employees must now wait for three days before they are entitled to unemployment benefits from NAV. However, the Norwegian Parliament has announced that the Government will be ordered to abolish the waiting period for unemployment benefits until 1 October 2021. The increased unemployment benefit rate of 80% of annual salary up to 3 G, and 62.4% of annual salary between 3 and 6 G applies in principle until 1 April, but this too has been notified to be extended and will apply until 1 October.
For redundancies implemented after 1 November 2020, the requirement for unemployment benefits has been that the employee's working hours have been reduced by at least 50% (against the previous temporary limit of 40%). From 1 January 2021, there is a general requirement that the employee's working hours are reduced by a minimum of 50% during the report card period in order to be entitled to unemployment benefits. In practice, this means that all laid-off employees, including those who were laid off before 1 November, must now, as a minimum, have their working hours reduced by 50% in order to be entitled to daily unemployment benefits.
Labour law tips on lay-offs
- Lay-offs: You need to know this (in english)
- Competition and customer clauses for redundancies and downsizing (in Norwegian onlyl)
- Newsflash: The redundancy period is further extended (in Norwegian only)
Lay-offs, pension and insurance
According to the Pensions Act, laid-off employees must be removed from the employer's pension scheme unless the regulations for the scheme in question stipulate otherwise. In practice, there have been relatively few pension schemes that stipulate that membership shall continue upon redundancy. In order to prevent a large number of employees from being without supplementary risk cover, having their membership period interrupted and having to submit a new health certificate when they eventually return to insurance schemes, temporary legislative amendments were adopted that provide a solution where employers can continue the membership of laid-off employees without paying pension premiums/deposit or insurance premium. However, the employer will have to cover the administration costs. These temporary rules apply until 30 June 2021.
For pension schemes where it is stipulated in the regulations that membership continues during redundancy, this will apply until the regulations are changed. This will also apply in any case to lay-offs that were implemented before the temporary legislative changes came into force. In such cases, the employer will have higher costs for redundancy than what follows from the temporary rules. Employers who are considering new lay-offs should therefore examine what applies to their pension schemes, and possibly consider changes in the regulations.
Holidays and holiday pay
The starting point is that the corona pandemic has not yet led to changes in the Holiday Act, and the holiday settlement for 2021 will therefore follow the general rules. This means, among other things, that employees who did not take a full holiday in 2020 will normally have the right to have these holidays transferred to the current year.
Unemployment benefits received during redundancy do not provide a basis for earning holiday pay and long-term laid-off employees will therefore be able to experience significantly less holiday pay being paid in 2021 than "normal". In this connection, it is important to be aware that the employee can normally reject to taking more holiday than the period covered by the holiday pay.
Labour law tips about holidays, holiday pay, etc. (in Norwegian only):
Work from the office/from home office
It is still the authorities' encouragement that as many people as possible use home offices and in many municipalities, including Oslo, this is mandatory as far as it is "practically possible" for the employee to work from home. Employers have a duty to ensure this, and must be able to document that notice of the implementation has been given to employees.
In this connection, the employer has the opportunity to order employees to work from home. On the other hand, the employees cannot normally claim to work from home instead of from the office if this is not necessary.
The use of a home office is regulated by the Working Environment Act and a separate regulation on work performed in employees' homes. The regulations do not apply to homework that is considered "short-term or accidental", which according to a specific evaluation may include home offices as a result of the coronary pandemic. However, the Ministry of Labour and Social Affairs has stated that a home office imposed by the authorities may also mean that the regulations apply. This may be of particular relevance if the home office scheme has acquired a permanent character and persisted over several months – as is the situation for many companies today.
If the regulations – after a specific evaluation – are applied, this will among other things cause a requirement that a written agreement regarding the home office has to be entered into with the employee. One must also be aware that the requirements for HSE also apply in the home office.
Labour law tips concerning home office (in Norwegian only):
Duty to maintain a safe working environment
The employer has a general duty to ensure a fully justifiable working environment, and will, in accordance with governing law, have a wide margin of appreciation to implement necessary measures to prevent sickness in the workplace. The measures must at all times be proportionate in light of the situation and especially related to current advice from public authorities. In accordance with this obligation, the employer will normally be able to impose specific obligations on employees, such as imposing the use of face masks. The same will probably apply to the introduction of a travel ban abroad if such travel will result in the employee being quarantined and thus unable to perform his or her work tasks.
Labour law tips on a safe working environment during the pandemic (in Norwegian only):
Absence due to care for children
The rules related to care days have been changed several times, but from 1 March 2021 the following rules apply: An employee is entitled to care benefit when the child must be at home because it is in quarantine or because school or kindergarten is closed. The same applies if the child must be at home as a result of special infection control considerations concerning the child or its family members in the household. The number of care days has doubled in 2021 (from 10 to 20 days for those who has up to two children), of which the employer is obliged to cover the salary for 10 of these days.
Sick leave (including quarantine)
Corona infection or suspicion of this (including quarantine after travel) does normally provide a basis for sick leave. However, this does not apply to employees who are quarantined as a result of travel made in violation of the authorities' national travel advice. Since 16 March 2020, the employer's period for sickness benefits has been reduced (from 16) to three days for sick leave related to the corona pandemic. In the event of corona-related absence, the employee should specify via the self-report or doctor's statement that the absence is due to corona in order for the employer to be able to demand reimbursement from NAV.