Termination of Employment by the Employer

Termination of employment is a unilateral decision made by the employer to end the employment relationship. Due to the strong protection of workers’ rights in Norway, strict requirements apply to the procedure and justification for such terminations. Below we review employee rights in the event of termination, as well as how our lawyers can assist.

Termination – a brief explanation

Termination may be linked to circumstances relating to the employee, the employer, or the business. For these alternatives, a range of conditions set out in law and case law determine when a termination can be considered legally justified, whether it relates to the employee, the employer, or the business.

If the termination is based on the employee’s circumstances, it is typically due to work performance or behaviour in the workplace. For example, if the employee fails to carry out the duties encompassed by the position, or harasses or bullies colleagues, these are typical grounds that may lead to dismissal based on the employee’s circumstances.

When it comes to the employer’s or the business’s circumstances, typical grounds are the need for rationalisation and reorganisation following changes in the market. A common example is that the employer or business has lost market share to competitors and no longer has sufficient work for all employees. Employees’ rights in the event of termination – specifically the right to a legally justified termination – are among the fundamental rights enshrined in the Norwegian Working Environment Act (Arbeidsmiljøloven).

Consultation meeting before termination

Before making a decision on termination, the employer should hold a consultation meeting in accordance with Section 15-1 of the Working Environment Act. The purpose of this meeting is to review the grounds for termination with the employee, and to give the employee an opportunity to present their views. This is intended to improve case handling and reduce the risk of unjustified dismissals.

Failure by the employer to call a consultation meeting does not in itself render the termination invalid. However, case law shows that the absence of such a meeting is often given significant weight by the courts when assessing disputes where the termination has been challenged as unjustified. Lack of a consultation meeting therefore increases the likelihood that a court may deem a dismissal unlawful.

It is common for the employee to be accompanied at the consultation meeting by a representative or a lawyer.

Formal requirements for termination – information about rights

There are strict formal requirements for termination, and if they are not met, the dismissal may be deemed invalid. These rules exist to ensure that every employee who loses their position is made aware of their rights.

As a general rule, termination must be delivered in person or sent by registered mail. To enforce the dismissal, the employer must ensure that the notice reaches the employee. For this reason, many employers either send termination letters by registered post or ask the employee to sign for receipt if handed over personally.

Other formal requirements follow from Section 15-4, second paragraph, of the Working Environment Act, which specifies the mandatory content of a termination notice. The most important requirements include:

The employee’s right to demand negotiations and to bring legal action

The employee’s right to remain in the position pursuant to Sections 17-3, 17-4 and 15-11 of the Act

The deadlines for demanding negotiations, filing a lawsuit, and remaining in the position

The identity of the correct defendant in a lawsuit for reinstatement or compensation

If the termination is due to business-related circumstances, the notice must also provide information about preferential rights under Section 14-2 of the Working Environment Act. If the notice does not include this information, it is invalid. The defect can be remedied by issuing a new, formally correct termination notice.

However, the employer may still be liable for damages based solely on the defective notice. The employee also has the right to receive a written justification for the dismissal if requested.

Fundamental right – the dismissal must be objectively justified

One of the fundamental rights of employees in the event of termination is that it must be objectively justified. This follows from Section 15-7 of the Working Environment Act. While the Act provides little detail on what constitutes objective justification, guidance is drawn from case law and preparatory works.

The requirement of justification concerns both the grounds for dismissal and the employer’s handling of the case.

Termination due to the employee’s circumstances
Dismissal based on the employee’s circumstances relates to performance or conduct. The distinction between justified and unjustified dismissal is often complex. For example, extensive case law establishes that theft and embezzlement from the employer almost always constitute justified grounds for termination. On the other hand, case law is less clear regarding conflicts with colleagues or management.

Key issues in assessing whether termination is justified include:

Factual basis: What can the employer document about the alleged grounds for dismissal?

Relevant considerations: Are there extraneous circumstances that should not be part of the grounds?

Warnings and opportunity to improve: Has the employee received warnings or feedback on performance or conduct? Can the employer document this?

Alternatives to dismissal: Have other measures been considered and ruled out?

Broadly speaking, the less serious the grounds for dismissal, the greater the requirements for thorough case handling by the employer. For example, an employee accused of poor cooperation should generally be given several opportunities to improve, while an employee who has committed theft cannot expect multiple chances.

Examples of grounds generally deemed justified:

Use of intoxicants during working hours
Acts of violence towards colleagues or customers
Grounds often deemed justified if warnings have been given and the employer can document the issues:
Unauthorised absence
Refusal to follow orders
Poor performance
Harassment
Breach of confidentiality

Warnings and the opportunity to adjust behaviour are therefore important. Lack of warnings does not automatically make a dismissal invalid, but it is a relevant factor. In cases of theft or embezzlement, however, warnings are generally irrelevant.

Termination due to business-related circumstances

The business environment is constantly changing, and companies often need to adapt and restructure to remain efficient and competitive. In such situations, redundancies are not uncommon, whether due to efficiency measures, market changes, or other business needs.

For such dismissals to be considered legally justified, several requirements must be met:

The employer must be able to document the need for redundancies
The employer must weigh the company’s need for redundancies against the disadvantages for employees with permanent positions
Before deciding on redundancies, the employer must consider whether other measures could be taken
Selection criteria for redundancy must be established and should be as objective as possible. Common criteria include age and length of service, as well as competence and personal suitability

For companies with multiple locations, the selection group must also be defined – i.e. which part of the business the redundancies apply to
The Working Environment Act requires that all grounds and criteria for redundancy are objectively justified.

Fundamental right – the right to contest the dismissal

Employees have the right to contest a dismissal if it is formally defective or lacks objective justification. Under Section 15-12 of the Working Environment Act, the employee may claim compensation for financial loss. The employee may also demand to remain in the position while the case is being processed, pursuant to Section 15-11. If the court ultimately rules that the dismissal is invalid, the legal consequence is that the termination is considered never to have occurred.

Right to demand negotiations

Under Section 17-3 of the Working Environment Act, the employee has the right to demand negotiations if they believe the dismissal or summary dismissal was unlawful. This right also applies in cases involving breaches of preferential rights, unlawful temporary employment, hiring arrangements, or suspension.

The employee must demand negotiations within two weeks of receiving notice of dismissal. This is one of the most practically important rights, as it compels negotiations with the employer and gives the employee the right to remain in their position during this period.

Right to remain in the position

The employee has the right to remain in their position while negotiations are ongoing, pursuant to Section 15-11 of the Working Environment Act. If legal proceedings are initiated within the deadlines in Section 17-4, this right is extended until the court case has been resolved.

This right generally does not apply to summary dismissals or terminations during a probationary period, although there are exceptions. Employers may also, in some circumstances, demand that the employee vacates the position even if the employee has the right to remain.

Other relevant rights

Right to unemployment benefits
If a dismissal is not reversed, or if the employee chooses not to contest it, they may be entitled to unemployment benefits. Note that there is a waiting period if the dismissal was based on the employee’s circumstances rather than the employer’s.

Right to have interest on student loans cancelled
Employees who become unemployed after dismissal may have the right to have interest on their student loans cancelled. This right arises after at least three months of registered unemployment.

Legal assistance in dismissal cases
Employees’ rights in dismissal cases are both extensive and complex. Both employees and employers should therefore consider seeking legal advice.

For employees, it is often crucial to have an assessment of the dismissal and the process, as well as an explanation of their rights. Assistance in pursuing claims for compensation or reinstatement may also be necessary.

For employers, it is equally important to ensure proper handling of the process to avoid liability for unlawful or unjustified dismissals.

In many cases, both parties prefer to resolve matters amicably rather than litigating. We therefore always seek to assess whether a negotiated settlement is possible.

Contact us

If you have questions about your rights in the event of termination or other employment law issues, please contact us. The initial consultation is free of charge, and fees only apply once a written engagement agreement has been signed. We can quickly clarify the legal aspects of your case and the assistance we can provide, including whether you may qualify for free legal aid.

Email: post@verito.no
Phone:+47 24 02 21 20

No right to free legal aid? In many cases, the employer covers legal costs.

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