Layoffs

A layoff means that an employee is temporarily released from the obligation to work in connection with cutbacks or operational stoppages. In order to reduce the financial consequenses of the Coronavirus outbreak, the rules regarding layoffs are temporarily changed.


Changes in the rules concerning layoffs are in force

In order to reduce the economic impact of the coronavirus the rules concerning layoffs were changed as of 20 March 2020. Our pages are updated according to the new rules.

The Norwegian Government - The Changes in the Layoffs- and Unemployment benefit rules (in Norwegian only)

NAV - Q&A regarding layoffs (in Norwegian only)

NAV - Layoffs - information for employers (in Norwegian only)

Midlertidig forskrift om midlertidig lønnskompensasjon til permitterte for å avhjelpe konsekvenser av utbrudd av covid 19 (in Norwegian only)

Layoffs can be implemented either over a continuous period (full layoff) or through the introduction of reduced working hours (partial layoff). Employees who are laid off retain their status as employees. Subject to certain rules, the employer is exempt from the obligation to pay salary for a limited period of time. NAV will consider whether the reason for the layoff gives entitlement to unemployment benefit.

NAV about Layoff and termination (in Norwegian only)

NAV about unemployment benefits during layoff (in Norwegian only)

NAV about layoffs due to the coronavirus outbreak (in Norwegian only)

Conditions for layoffs

You must have reasonable grounds to lay off your employees. Examples of this include a lack of orders and full warehouses, loss of competitive bidding rounds, accidents and natural events. As employer, you must also have done what can be considered reasonable in order to avoid the layoff. Layoffs must be based on circumstances which are considered to be temporary in nature. If there are no reasonable grounds to believe that the employee will be recalled, the employee's employment must be terminated instead.

Arbeidstilsynet om permittering (in Norwegian only)

Who can be laid off

It is primarily people who are defined as employees who can be laid off. Owners of sole proprietorships are defined as self-employed persons and cannot lay themselves off.

Employees of own limited company

Employees of their own private limited company are considered to be employees and are normally entitled to unemployment benefit in the event of being laid off. If you are the only employee in your own limited liability company and decide to lay yourself off (more than 80 % partial layoff), it is questionable whether the company can do what is required in order to secure future contracts and reduce the need for layoffs. If the company suspends operations completely, the situation may indicate that the company is winding up rather than going through a temporary interruption of operations. In light of the special circumstances (the Covid 19/coronavirus pandemic) you, as the sole employee of your own limited liability company, may apply for unemployment benefits even if you are laid off 100 %. NAV will consider the right to unemployment benefits individually.

Maximum duration of layoffs

Employees can lay off their employees for a period of 26 weeks over a period of 18 months.


Prolonging the maximum period of layoffs

Employers that, by the end of June 2020, had 19 weeks or less left of the maximum period of layoff (26 weeks over the span of 18 months) get an extended maximum period of layoff up to, and including, 31 October 2020.

Discussion meeting prior to layoffs

Before you can lay off employees, you as employer must hold a discussion meeting with the elected representatives. During this meeting, you must explain why the layoff is necessary and which employees are affected. If the layoff does not apply to everyone, the selection procedure must be based on objective criteria based on the needs of the business (+examples of criteria include seniority, suitability and skills). This meeting must be minuted and the minutes must state what the employer has done to avoid the layoff.

Notification of the employees

The employees must be given at least 14 days' advance notice before the layoff takes effect. In the event of unforeseen incidences the period of notice is normally two calendar-days.

Layoffs due to the coronavirus outbreak might be expected or unexpected. The reason behind choosing a two day period of notice should be stated in the notification. NAV generally does not overrule a shorter notification period if the situation is regulated by the Working Environment Act´s definition of accidents, natural disasters or other unforeseen incidences. 

The notification must be dated and state the start date of the layoff, the reason for the layoff, the layoff percentage, the duration of the layoff and the number of days for which the employer will be covered by the statutory salary obligation. If the duration of the layoff is not known with any certainty, a probable duration should be stated. In such cases, the question of a further period of layoff must be discussed with the elected representatives within one month.

Arbeidstilsynet om permitteringsvarsel (in Norwegian only)

Hovedavtalen mellom LO og NHO (in Norwegian only)

Withdrawing notified layoffs

The commencement of a notified layoff can be deferred, but the employees must be notified accordingly as soon as possible.

Obligation to notify NAV when laying off ten or more employees

If you, as an employer, are considering a mass layoff you are required to notify NAV as soon as possible, but no later than when you summon the employees to a discussion meeting. A mass layoff is when ten or more employees are laid off, without pay, or have their weekly working hours reduced by more than 50 % for four weeks or more. The notification obligation aims to ensure that NAV is able to assist the enterprise and the employees concerned.

Withdrawing notified layoffs

The commencement of a notified layoff can be deferred, but the employees must be notified accordingly as soon as possible.

A-melding and layoffs

In connection with layoffs, employees are not be de-registered from the Register of Employers and Employees (NAV's AA register), but it must be specified in the a-melding that the employee has been laid off.

Obligatory salary days

You must pay salary for the first two daysproposed to increase to ten days from 1 September 2020 of the layoff period (obligatory salary days, i.e. days on which the employee should normally have been at work). If an employee is on sick leave before the layoff commences, you will not be required to make salary payments for obligatory salary days until the employee is declared fit for work again.

Rundskriv om arbeidsgivers lønnsplikt (in Norwegian only)

Lov om lønnsplikt under permittering (in Norwegian only)

Unemployment benefits in connection with layoffs

In order to be entitled to unemployment benefits the employee must have had his or her weekly working hours reduced by more than 40 percent. A full-time employee laid off two days a week might therefore be entitled to unemployment benefits.

If the employee attach the layoff notice when applying for unemployment benefits, NAV will generally receive the necessary information required in the current situation.

Employers are to pay full salary the first two working days after the layoff is in force (obligatory salary days). The state will pay a compensation for the next 18 working days up to 6 G (NOK 599,148). Employers should not pay these 18 days in advance. The employees must apply to NAV for compensation for day three to day 20. Following these 20 days, the employee may be entitled to unemployment benefits. The laid off employee is entitled to salary and salary compensation for the first 20 days, regardless of whether or not the employee is entitled to unemployment benefits during the layoff period. The salary compensation scheme is proposed to be removed as of 1 September 2020.

NAV om endringer i permitterings- og dagpengeregelverket (in Norwegian only)

Circular concerning unemployment benefits during layoff (in Norwegian only)

NAV about unemployment benefits during layoff (in Norwegian only)

NAV - the National Insurance basic amount (G) (in Norwegian only)

Lovdata - refusjon når arbeidsgiver har forskuttert ved å utbetale lønn (in Norwegian only)

 

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