A layoff means that an employee is temporarily released from the obligation to work in connection with cutbacks or operational stoppages.
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.
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.
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 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.
Maximum duration of layoffs
Employees can lay off their employees for a period of 26 weeks over a period of 18 months.
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. The basic collective agreement between the Norwegian Confederation of Trade Unions (LO) and the Confederation of Norwegian Enterprise (NHO) contain specific time limits to notify employees of layoffs in the event of Force Majeure or labour disputes. In the event of natural disasters, the time limit is 2 days. Normally, these time limits also applies for employees who are not part of this collective agreement. However, other time limits may be imposed through other collective agreements or specific labour requirements.
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.
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
You must notify NAV if at least ten of your employees will be laid off without pay or have their weekly working hours reduced by more than 50 percent for a period of more than four weeks. The notification obligation must ensure that NAV is able to assist the enterprise and the employees concerned.
A-melding and layoffs
In connection with layoffs, employees must 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 fifteen days of a period of layoff (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, the employer will not be required to make salary payments for obligatory salary days until the employee is declared fit for work again.
Unemployment in connection with layoffs
Employees who have been laid off can apply for unemployment benefit from NAV. NAV must receive documentation of all circumstances relating to the layoff. When you apply for unemployment benefit in connection with a layoff period, you will be notified what information will be required.
Layoffs at Christmas and Easter
Unemployment benefit will not be paid in connection with layoffs during the period from 20 December to 1 January inclusive, and from Palm Sunday to Easter Monday inclusive, unless the employee has been laid off for more than six weeks or the layoff is due to an accident, natural circumstances or other unforeseen events.