Establishing a clear and compliant employment agreement is fundamental when hiring employees in Norway. Norwegian labor law, primarily governed by the Working Environment Act (Arbeidsmiljøloven), mandates written employment contracts for all employees, regardless of the duration or nature of the work. These agreements serve as the legal foundation of the employment relationship, outlining the rights and obligations of both the employer and the employee, and ensuring adherence to statutory requirements.
Understanding the specific requirements for employment contracts in Norway is crucial for businesses to avoid potential legal disputes and ensure fair treatment of their workforce. The law provides a framework that balances flexibility with strong employee protections, making it essential for employers to draft contracts that accurately reflect the terms of employment while complying with all applicable regulations.
Types of Employment Agreements
Norwegian law primarily distinguishes between two main types of employment agreements: indefinite and fixed-term.
- Indefinite Employment (Fast ansettelse): This is the standard and preferred form of employment in Norway. An indefinite contract has no predetermined end date and continues until terminated by either party in accordance with the legal requirements for notice or dismissal.
- Fixed-Term Employment (Midlertidig ansettelse): Fixed-term contracts are only permitted under specific circumstances outlined in the Working Environment Act. These circumstances include:
- Work of a temporary nature (e.g., project work, seasonal work).
- Work as a substitute for another employee (e.g., parental leave cover).
- Practical training.
- Work with participants in labor market schemes under the direction of or in cooperation with the labor authorities.
- For athletes, trainers, referees, and other leaders within organized sports.
- For a period of up to 12 months, provided the temporary work is limited to a specific type of work and the employee is hired for a specific project or task. This specific basis has limitations on renewal.
Employees on fixed-term contracts generally have the same rights as those on indefinite contracts, proportional to their employment period. If a fixed-term contract exceeds certain durations (typically four years for general temporary work or three years for substitution/temporary nature work), the employee may be considered permanently employed.
Essential Clauses
Norwegian law requires that all written employment agreements contain specific minimum information. While additional clauses can be included, these mandatory terms must be present:
| Clause | Description |
|---|---|
| Identity of Parties | Names and addresses of the employer and employee. |
| Workplace | Where the work is to be performed. If there is no fixed workplace, state that the employee works at various locations and provide the employer's address. |
| Job Title/Description | A description of the work or the employee's title, rank, or category. |
| Start Date | The date the employment commenced. |
| Expected Duration (Fixed-Term) | If temporary, the expected duration of the employment. |
| Probationary Period | If applicable, the duration and conditions of the probationary period. |
| Employee's Rights to Absence | Reference to applicable rules regarding vacation and vacation pay. |
| Notice Periods | The applicable notice periods for termination by either party. |
| Salary and Benefits | The agreed salary, any supplements, and other remuneration not included in the salary (e.g., bonuses, pension contributions). |
| Payment Intervals | When the salary is paid (e.g., monthly, bi-weekly). |
| Working Hours | The length and placement of the agreed daily and weekly working hours. |
| Breaks | Information about breaks. |
| Collective Agreements | If applicable, mention any collective agreements that regulate the employment relationship. |
| Pension Scheme | Information about the employer's occupational pension scheme. |
This list represents the minimum requirements. Employers should also include details specific to the role and company policies, provided they do not contradict statutory rights.
Probationary Period
A probationary period (prøvetid) can be agreed upon in the employment contract. The purpose is to allow both the employer and the employee to assess the suitability of the employment relationship.
- Maximum Duration: The maximum duration for a probationary period is six months.
- Notice Period: During the probationary period, a shorter notice period of 14 days typically applies, unless a longer period is agreed upon or stipulated in a collective agreement.
- Termination during Probation: Termination during the probationary period requires the employer to demonstrate that the employee's suitability, skills, or reliability are unsatisfactory, or that the employee is absent from work. The requirements for dismissal during probation are less stringent than for permanent employees, but the dismissal must still be objectively justified and follow procedural requirements.
It is crucial that the possibility and duration of a probationary period are clearly stated in the written employment agreement.
Confidentiality and Non-Compete Clauses
Restrictive covenants such as confidentiality and non-compete clauses are common but subject to specific legal limitations in Norway to protect employees' ability to seek future employment.
- Confidentiality Clauses: Clauses requiring employees to maintain confidentiality regarding company information are generally enforceable, provided they are reasonable in scope and duration and relate to legitimate business interests.
- Non-Compete Clauses (Konkurranseklausuler): These clauses restrict an employee's ability to take up employment with a competitor or start a competing business after leaving the company. Norwegian law significantly limits the enforceability of non-compete clauses.
- They must be in writing.
- They can only be invoked when necessary to protect the employer's specific know-how or trade secrets.
- They cannot exceed 12 months from the termination date.
- The employer must provide compensation to the employee during the period the clause is active, typically equivalent to the employee's full salary for the first six months and at least 70% of the salary for the remaining period, capped at 8-12 times the National Insurance basic amount (G).
- The employer must issue a written statement explaining why the clause is being invoked upon termination.
- Non-compete clauses are generally not enforceable if the employee is dismissed without just cause or if the employer is in serious breach of their obligations.
- Non-Solicitation Clauses (Kundeklausuler): These clauses restrict an employee from contacting the employer's customers after leaving. Similar to non-compete clauses, they are limited to 12 months and require compensation. They can only apply to customers the employee has worked with or been in contact with during the last year of employment.
Due to the strict requirements and limitations, employers must carefully draft and assess the necessity of restrictive covenants.
Contract Modification and Termination Requirements
Any significant changes to the terms of an employment agreement must be agreed upon in writing between the employer and the employee. Unilateral changes by the employer are generally not permitted unless they fall within the employer's managerial prerogative (styringsrett) for minor adjustments to duties or work organization, or if they constitute a lawful variation of contract following a formal process.
Termination of an indefinite employment contract by the employer must be objectively justified. Valid grounds for dismissal include:
- Employee's conduct: Serious breaches of duty, repeated poor performance, or other circumstances related to the employee.
- Employer's circumstances: Downsizing, restructuring, or other operational necessities.
Termination must follow a specific legal procedure, including a meeting with the employee and potentially their representative, and providing written notice. The notice period depends on the employee's length of service:
| Length of Service | Notice Period (by Employer) |
|---|---|
| Up to 5 years | 1 month |
| 5 - 10 years | 2 months |
| 10+ years | 3 months |
| 10+ years (age 50+) | 4 months |
| 10+ years (age 55+) | 5 months |
| 10+ years (age 60+) | 6 months |
Employees can terminate their employment with a standard one-month notice period, unless a longer period is agreed upon. Summary dismissal (avskjed), which results in immediate termination, is only permissible in cases of gross misconduct. Fixed-term contracts typically end automatically on the agreed date, but they can also be terminated prematurely based on the same rules as indefinite contracts if specified in the agreement.
