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New requirements in Norwegian legislation for extended content in the employment contract

Deloitte Advokatfirma

From July 1, 2024, new requirements for written employment contracts will be introduced. In the following we will highlight the content of the changes and risks of non-compliance. Employers must

  • Familiarize themselves with the new requirements
  • Implement the changes by issuing updated employment contracts or provide an addendum to the existing employment contract
  • Ensure that employees who take up employment from 1 July receive employment contracts in line with the new requirements

What are the changes?
 

Section 14-6 of the Working Environment Act sets requirements for the content of written employment contracts. The new requirements are in line with the EU's Directive on Transparent and Predictable Working Conditions, which aims to contribute to more predictable and secure conditions for employees.

The new provisions for content in employment contracts include requirements for information on employer paid absences, information on termination of employment, varying working hours, changes in shifts, arrangements beyond normal working hours, and competence development.

Some of the new requirements to be mentioned is that for staffing agencies the changes implies that the employment contract for their employees shall include the identity of the client company. Other changes worth mentioned is that any provisions regarding the place of work should not restrict the employee from working from home office (in accordance with employer’s policy), and specific overview of all salary components, such as base salary, allowances, benefits such as meal or night allowances, coverage of increased tax burden or other benefits to cover costs related to cross-border activities, should be included.

Furthermore, benefits provided by the employer such as social security, pension and insurances shall be mentioned together with the names of institutions receiving payments from the employer in this regard, and additional conditions offered by the employer, such as full pay during sickness and/or parental leave.

Expanded information requirements for employees sent abroad
 

From July 1, 2024, added information requirements also apply to employees who will work abroad for more than one month. In addition to the current requirements for assignment contracts, the following information must be included:

  • The country where the work will be performed, including whether the employee will be sent to another country within the EEA area
  • The coverage of the employee's travel expenses related to repatriation

Timing of employment contracts and implementation of changes
 

The new rules set shorter deadlines for employment contracts and implement changes. Currently, the requirement is one month, but from July 1, 2024, an employment contract must be concluded within 7 days from the start of the employment relationship, and any changes must be included in the employment contract no later than the day the changes take effect.

If an employee requests an update to an existing employment contract, the employer must update the employment contract within 2 months of the request.

New presumption rules
 

Two so-called presumption rules are being introduced:

  • Presumption of permanent employment
  • Presumption of percentage of position

The presumption rules mean that it should be assumed that the employee has permanent employment or the employee's statement regarding the percentage of position is valid if the employment contract does not provide information on this. Exceptions apply if the employer can demonstrate that it is "highly likely" that the employment was temporary or that the percentage of position was different from employee’s statement.

The consequences and risks of non-compliance with the requirements of the law
 

If the requirements of the law regarding the content of employment contracts are not met, the employer risks the Norwegian Labour Inspection Authority instructions to adhere to the regulations, as well as fines and penalty fees.

Having employees in other types of employment or percentage of position than what the employer believes, will, according to the new presumption rules, entail significant risk. For example, in the case of termination, justified cause is required to terminate employees. Termination would be presumed to be linked to permanent employment and the percentage of position indicated by the employee, unless the employer can provide evidence that something else is highly likely.

Based on the new regulations, there are three key priorities for employers to address
 

  1. Familiarize themselves with the new requirements
  2. Update employment contracts for existing employees upon request. In these cases, it is sufficient to provide an addendum or supplement to the existing employment contract
  3. Ensure that employees who take up employment from 1 July receive employment contracts in line with the new requirements

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