Norway

In Norway, labor law outlines two main categories of employment contracts, with a third option existing outside the traditional employee-employer relationship. These different agreements have their own unique characteristics.

Permanent Employment Contracts (Open-Ended)

Permanent employment contracts, also known as open-ended contracts, are the most common type of employment agreement in Norway. These contracts remain in effect indefinitely until terminated by either party, following the procedures outlined in the contract and Norwegian labor law.

Fixed-Term Employment Contracts

Fixed-term employment contracts have a predetermined start and end date. While these contracts offer flexibility for employers with temporary needs, Norwegian law prioritizes permanent employment. For a fixed-term contract to be valid, the employer must have a justifiable reason for the temporary nature of the position. Examples of such justifications include covering for a temporary absence of another employee (maternity leave, sick leave, etc.) or the nature of the work itself being temporary (seasonal projects). If a fixed-term contract exceeds 12 months without proper justification, or if the contract is renewed for more than four consecutive years, the employee will automatically be considered permanently employed.

Freelance Contracts

Freelance contracts function differently from traditional employment contracts. These agreements are established between a freelancer or independent contractor and a company or client. Freelancers are not classified as regular employees; they operate independently, offering their expertise for a set fee and managing their own work schedules and taxes.

Norwegian employment law emphasizes clear and comprehensive contracts to ensure a fair working relationship between employers and employees. While written contracts aren't mandatory, they are highly recommended to avoid misunderstandings. Here's a breakdown of essential clauses required by law or strongly advised for inclusion:

Mandatory Clauses

These clauses must be included in all Norwegian employment contracts:

• Parties to the Agreement: Clearly identify both the employer and the employee with their full names and contact information.
• Place of Work: Specify the employee's primary work location. If the work involves multiple locations, mention "various locations" and include the employer's registered address or home address (if applicable).
• Job Description: Outline the employee's job title, duties, and responsibilities.
• Start Date: Indicate the official commencement date of employment.
• Employment Type: Specify if the contract is permanent or temporary. Fixed-term contracts require mentioning the estimated duration and justification for the temporary nature of the position.
• Working Hours: Detail the standard working hours per week, including breaks.
• Vacation: Specify the total number of vacation days and the vacation pay rate.
• Notice Periods: Outline the required notice period for termination by both the employer and the employee.
• Wage and Salary: Clearly state the employee's wage or salary amount, including payment frequency and any additional benefits or allowances.

Recommended Clauses

While not mandatory, including these clauses in your employment contracts adds clarity and protects both parties' interests:

• Confidentiality: If the role requires handling sensitive information, outline confidentiality expectations and restrictions on employee disclosure.
• Intellectual Property: Specify ownership rights over any intellectual property created by the employee during their employment.
• Non-Compete Clause: These are strictly regulated in Norway. If included, they must be objectively justified to protect the employer's legitimate interests and cannot exceed one year after termination. Compensation during this period is mandatory.
• Social Media Policy Outline acceptable use of social media concerning company information and potential conflicts of interest.
• Grievance Procedures: Establish a clear process for employees to address workplace concerns.

The probationary period, also known as the trial period, is a common feature in Norwegian employment contracts. It serves as a temporary evaluation phase for both the employer and the employee to assess suitability for the role.

Key Points on Probation Periods

The Working Environment Act sets the maximum probation period at six months. This applies to both private and public sectors. In the private sector, a probationary period can only be included with the written consent of the employee within the employment contract. The employer cannot impose it unilaterally after the contract is signed. For public sector employees, a six-month probation period applies automatically unless explicitly excluded. Since 2020, the probation period for temporary contracts cannot exceed half the total contract duration. For instance, in a 6-month temporary position, the probation cannot be longer than 3 months.

Termination During Probation

During the probation period, termination by either party requires a shorter notice period compared to regular employment. This allows for a more flexible assessment phase. Employers are not obligated to provide a specific reason for dismissal during probation, but fairness and good practice still apply. Employees on probation still enjoy fundamental rights like protection against discrimination and unfair treatment.

Considerations for Employers

Clearly outlining the expectations, evaluation criteria, and potential outcomes during the probation period is crucial. The probation period should be reasonable and proportionate to the job requirements. An overly long probation might be deemed unfair. Providing proper training, guidance, and feedback during probation is essential to assess the employee's potential effectively.

Confidentiality and non-compete clauses are common in Norwegian employment contracts to safeguard the employer's legitimate business interests. However, these clauses are strictly regulated to maintain a fair balance between the employer's interests and the employee's right to work.

Confidentiality Clauses

Confidentiality clauses are designed to protect the employer's sensitive or proprietary information. These clauses can cover:

• Trade secrets: Information that provides the employer a competitive edge and is subject to reasonable secrecy measures.
• Customer information: Client data, contact details, or purchasing habits.
• Business plans or strategies: Unpublished information about the company's future direction.

The Working Environment Act (Arbeidsmiljøloven) doesn't directly regulate confidentiality clauses. However, general contract law principles and loyalty obligations apply. An employee is expected to maintain confidentiality regarding such information during and after their employment.

Key points to remember for confidentiality clauses:

• Specificity: The clause should clearly define the type of confidential information protected.
• Reasonable Scope: The restrictions should be reasonable in terms of time and scope of information covered.
• Public Knowledge Exception: Information already publicly known cannot be restricted by a confidentiality clause.

Non-Compete Clauses

Non-compete clauses limit an employee's ability to take up similar employment with a competitor after termination. Norwegian law is particularly restrictive towards non-compete clauses for the following reasons:

• Strict Justification: Employers must demonstrate a legitimate need for protection to enforce a non-compete clause. This justification typically involves safeguarding highly specialized knowledge or confidential information.
• Maximum Duration: Even with justification, a non-compete clause cannot exceed one year following termination.
• Compensation Required: During the non-compete period, the employee must be compensated at a minimum of 100% of their salary up to a certain threshold and then 70% for higher salary brackets.

These limitations highlight the employee's right to work and ensure they are not unfairly disadvantaged after leaving the company.

Additional points to consider:

• Written Agreement: Non-compete clauses must be included in a written employment contract to be enforceable.
• Employer's Obligation to Respond: If the employee inquires about the application of a non-compete clause, the employer must provide a written statement outlining the justification for invoking it.