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Protection against dismissal during a workforce reduction

Most sectors of business and industry are in a continuous process of reorganisation, a process which often can result in redundancies. On this page we explain what legal protection employees have in situations like this.

Consultation meeting before dismissal

Protection against dismissal: requirement of objective grounds

Suitable alternative employment

Weighing of interests

Sound selection criteria

Important deadlines: Working Environment Act, chapter 17

How NITO can assist in dismissal cases

 

Consultation meeting before dismissal

Before making a decision regarding dismissal, the employer is obligated to discuss the matter with the employee, pursuant to the Working Environment Act, section 15-1. The employee has the right to be accompanied by an employee representative at the meeting.

At this meeting, it is important that the employee inform the employer of all circumstances that may have a bearing on the final selection for redundancy; for example, employee competence or social circumstances of which the employer may not be aware.

Minutes of the 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.

We recommend that you contact NITO's secretariat before the discussion takes place to seek advice on what you should focus on during the meeting.

Protection against dismissal: requirement of objective grounds

Protection against dismissal in this context means the protection provided under the law to an employee against the employer's termination of the employment relationship. The main provision for this can be found in the Working Environment Act, section 15-7.

Under this provision, the employer may not dismiss the employee unless it is objectively justified to do so based on circumstances relating to the enterprise, the employer or the employee. A dismissal made in connection with a workforce reduction constitutes a dismissal based on the enterprise's circumstances.

What would further constitute objective grounds would depend on a specific assessment. As shown below, the Act itself and case law provide some guidelines.

The courts have so far been highly restrictive when it comes to reviewing employers' assessment of the need to make cutbacks. Operational reasons that entail rationalisation and cutbacks in the number of employees would essentially constitute an objective ground for dismissal.

An enterprise is not required to perform poorly before it may make cutbacks, so implementing whatever rationalisation measures are necessary for it to achieve its goals would also constitute an objective ground.

Suitable alternative employment

For operational cutbacks or rationalisation measures to constitute an objective ground for dismissal, the employer must have no suitable alternative employment to offer.

This means, for example, that if a unit were closed down and the enterprise had alternative employment elsewhere in the enterprise that suited the employee, dismissal would not normally be deemed objectively justified.

Weighing of interests

The employer is obligated to weigh the needs of the enterprise against the effect a dismissal would have on the individual employee. The decisive issue will be whether or not dismissal of an employee was sufficiently justified.

The employer must therefore weigh its own need to make cutbacks against the adverse effect a dismissal would have on the employee. The general rule is that the greater the adverse effect dismissal would have on the employee, the greater the need for dismissal must be.

Sound selection criteria

The enterprise must use sound criteria when deciding which employees are to be made redundant. In addition to making individual assessments, the selection process for redundancies must be objective.

Generally accepted objective selection criteria can be divided into three groups:

  • seniority
  • competence
  • social circumstances

Seniority will serve as a good starting point for assessing the objectivity of the selection process. However, the enterprise is not obligated 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 a case, the court may attach importance to whether or not the dismissals were made after discussions with 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 the employer 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 proved decisive in the selection.

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

The enterprise will often want to base its selection based on employees' competence. Again, put simply, the weaker the financial position of the enterprise, the more likely it is that the court will accept more weight being given to individual competence than to seniority.

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

Important deadlines: Working Environment Act, chapter 17

If the employee considers the grounds for dismissal not to be objectively justified or lacks enough information to make such assessment, he/she may demand negotiations with the employer. A demand for negotiations must be submitted in writing no later than two weeks after receiving a notice of dismissal; see the Working Environment Act, section 17-3 (2).

How NITO can assist in dismissal cases

If you feel that your dismissal was not objectively justified, you can receive assistance from NITO's secretariat in the negotiation meeting with your employer.

NITO is dependent on attending this meeting in order to be able to assess whether your dismissal was objectively justified and to determine whether we can provide further assistance in the form of legal proceedings if negotiations fail to reach an agreement. Should we find legal basis for instituting legal proceedings and the employee desires this, all the costs of the process will be covered by NITO.

The condition for receiving any legal assistance other than 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 with a specific case.

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