Workforce reductions: a brief explanation

Consultation meeting prior to dismissal

Before a decision regarding dismissal is made, the employer is obliged to discuss the matter with each employee. You have the right to have an union representative accompany you to the consultation meeting.

At this meeting, it is important that you inform the employer of all circumstances that may have a bearing on the final selection of redundant employees; for example, any competencies or social circumstances of which your employer may not be aware.

Minutes of this consultation meeting must be kept. It is important to check that the minutes present an accurate record of what was said at the meeting. Remember that your employer may use the minutes as evidence in a subsequent dispute concerning your dismissal.

Contact NITO before the consultation meeting takes place for advice about what you should place emphasis on at the meeting.

What constitutes objective grounds for dismissal?

The Working Environment Act affords the individual employee protection against dismissal unless it is objectively justified by circumstances pertaining to the enterprise, the employer or the employee.

A dismissal made in connection with a workforce reduction process constitutes a dismissal based on the enterprise's circumstances. A concrete assessment of what constitutes objective grounds in such situations must be made on a case-by-case basis.

Cutbacks and rationalisation generally constitute objective grounds

Operational reasons that entail rationalisation and cutbacks will generally constitute objective grounds for dismissal.

An enterprise is not required to perform poorly before implementing workforce reductions, so implementing whatever rationalisation measures are needed for it to achieve its objectives will also constitute objective grounds.

The courts have so far been highly restrictive when it comes to reviewing employers' assessment of the need to make cutbacks.

Is suitable alternative employment available?

For operational cutbacks or rationalisation measures to constitute objective grounds for dismissal, the employer must have no suitable alternative employment to offer. This means that, for example, a dismissal will normally not be objectively justified if a department is closed and the enterprise has suitable alternative employment for you in another part of the enterprise.

Weighing the needs of the individual employee against the needs of the enterprise

The employer must weigh the strain imposed on the employee by dismissal against the enterprise's need to implement cutbacks.

The decisive factor will be whether or not dismissal of an employee is sufficiently justified. The more adverse the effect dismissal will have on the employee, the greater the enterprise's need for dismissal must be.

Who should be dismissed in a workforce reduction: sound selection criteria

When an enterprise decides to dismiss multiple employees, the selection process must be sound. In addition to making individual assessments, the selection process must be objective.

The generally accepted objective selection criteria can be divided into three groups:


Seniority will serve as a good starting point for assessing the objectivity of the selection process. However, the enterprise is not obliged to base selection exclusively on seniority unless there are particular grounds to do so.

One such ground may be an existing agreement with employee organisations. In such cases, the courts may attach importance to whether or not the dismissals were made after consulting the employee organisations and to whether or not they were in line with whatever the parties agreed on.

Although no principle regarding seniority is laid down in Norwegian law, it is, as mentioned above, one of the criteria employers must take into consideration. Put more simply, the employer must have objective grounds for departing from the seniority principle, but the smaller the difference in seniority between the employees under assessment, the easier it will be for the employer to argue that other relevant factors weighed heavier in the selection process.

In other words, the longer the employee's seniority, the more weighty the enterprise's reason must be for attaching weight to other selection criteria.


From the enterprise's perspective, it will often want to base its selection based on employees' competencies. Again, put simply, the weaker the financial position of the enterprise, the more likely it is that the courts will accept more weight being given to individuals' competencies than to seniority.

Social circumstances

From a legal perspective, social circumstances will also be weighed against the enterprise's need to retain employees.

The criterion of social circumstances requires that consideration be given to whether a workforce reduction will place some employees in an extremely difficult situation, particularly when it comes to finding a new job. Examples of social considerations are disability, illness or advanced age.

You have 14 days' notice to request negotiations with your employer if you disagree

If you feel that your dismissal is not objectively justified or if you lack enough information to make an assessment, you may request negotiations with your employer. A request for negotiations must be submitted in writing within two weeks of receiving a notice of dismissal; see the Working Environment Act, section 17-3 .

Contact NITO for advice and assistance

If you feel that your dismissal was not objectively justified, you will receive assistance from NITO's secretariat at the negotiation meeting with your employer. At such a meeting we can assess whether or not your dismissal was objectively justified.

If no agreement is reached in the negotiations, NITO can consider further assistance in the legal system. If we find that there is legal basis for instituting legal proceedings, and if the employee desires this, all the costs of the process will be covered by NITO.

Conditions for legal assistance

The condition for receiving any legal assistance beyond verbal advice is that the employee has been a member of NITO for at least three months prior to receiving notice of dismissal and that the reason for joining NITO had no connection with the situation that led to dismissal. 

The reason for this is that legal proceedings are costly, and it would be unfair to other members if we were to give priority to individuals who join NITO to obtain free assistance in a specific case.