Staff reduction – what rights do you have as an employee?

In recent months, several large companies have announced layoffs. NRK, Posten Bring, DNB and several insurance companies are among them. Artificial intelligence is being cited as part of the explanation in several of the restructuring processes.

For those who risk losing their jobs, it is important to know your rights. The employer must be able to justify both the need for layoffs and why you were selected in particular. Before you can be dismissed, the employer must also consider other suitable work opportunities and the consequences of the dismissal for you.

In this article, we look more closely at your rights in the event of layoffs under the Working Environment Act.

When can an employer terminate your employment due to layoffs?

The employer must have a reasonable basis for the termination. The employer must therefore be able to demonstrate and justify a need in the business that necessitates downsizing. This may, for example, relate to streamlining or technological changes, even when the business is performing well.

The termination is not justified if the employer has other suitable work to offer you within the business or the group of companies. The obligation may also include a specific, unstated job requirement that can be filled with a position, but the employer must not create a position for which there is no real need. You must also be sufficiently qualified, but do not need to be the best qualified. Some training must normally be accepted.

Why have you been chosen specifically?

The employer must also have a valid reason to select you specifically. First, it must be clarified who is to be compared, i.e., the selection criteria. The starting point is the entire company, but the criteria can also be narrowed down on a valid basis, for example to a department, but must not be too narrow.

Subsequently, the employer must make a selection among the employees within the framework of the specified selection criteria. Again, a requirement of reasonableness applies. Factors that often play a role include:

Length of service, that is, how long you have been employed
Professional skills, expertise and qualifications
Applicability and the company’s future needs
Social considerations and the consequences the dismissal will have for you

Tariff agreements can lead to seniority gaining greater importance. Therefore, it must be investigated whether you are covered by such an agreement.

How do you prepare for a discussion meeting?

Before the decision to terminate is made, the matter shall, as far as practicable, be discussed with you and your employee representative. Request the basis for the downsizing and the assessment of you in advance. Gather documentation of your skills and inform the employer of any special social or economic circumstances that should be known to the employer. Consider seeking assistance from an employee representative and, if necessary, ask to have a lawyer present.

Should you accept an end-of-year package?

An end-of-service agreement usually means that you accept that the employment relationship ends and waive the right to contest the termination later. In return, you may receive additional compensation or other benefits. There is no generally established legal right to an end-of-service package, but the right to end-of-service compensation may result from a collective agreement or other agreements. Beyond such agreed rights, it will normally be up to the parties to negotiate what the end-of-service package should contain.

Before you decide on a final package, you should clarify:

What do you get in addition to what you already have entitlement to?
Do you have to work during the notice period?
Will the payment be reduced if you get a new job?
How are bonuses, pensions and insurance handled?
Which rights do you renounce?

End-of-service benefits can affect when you receive unemployment benefits from NAV. The impact on other social security benefits must be assessed on a case-by-case basis. Also, clarify any consequences for the AFP and pension before signing an agreement.

What deadlines apply if you are laid off?

If you wish to contest the termination, as a general rule, these deadlines apply:

2 weeks: Deadline to request negotiations after receiving the notice of termination (NOTE: remember that the request must be submitted in writing)
8 weeks: Deadline for filing a lawsuit if you claim the termination is invalid
6 months: Time limit for legal action if you only claim compensation

The time limits for bringing a lawsuit are usually calculated from the conclusion of the negotiations, or from the termination of the negotiations if negotiations have not been held.

As a general rule, you can continue in your position while the negotiations are ongoing. If you wish to retain this right during a lawsuit, you must file a lawsuit both within the 8-week deadline and before the termination period expires. Alternatively, you can notify your employer in writing that a lawsuit will be filed within the deadline before the termination period expires. Therefore, seek advice promptly so that your rights are protected.

When should you contact a lawyer?

You do not need to have decided to contest the termination in order to seek advice from us. We can assist you in:

Consider whether the termination is justified
Review the selection and opportunities for other work
Assist you in negotiations
Review and negotiate final agreements

The law firm Halvorsen & Co assists employees through downsizing processes. Together, we assess whether you should contest the termination or seek a negotiated solution. Feel free to contact us for a non-binding discussion.