Temporary lay-off

A temporary lay-off, or temporary redundancy, is a temporary scheme where the employee is ordered not to come to work, while the employer is relieved of its obligation to pay a salary. The employment relationship persists, and it is a condition that the cessation of work is temporary.

Rules for temporary redundancy

Temporary redundancy is only to a very limited extent based on statutory provisions, with the exception of the Act on the obligation to pay salary during temporary redundancies. The non-statutory rules are consequently based on a number of collective pay agreements such as the Basic Agreement between the Norwegian Confederation of Trade Unions (LO) and the Confederation of Norwegian Enterprise (NHO). Below follows an overview of the key rules relating to temporary redundancy.

If the redundancy is certain or highly likely to be of a permanent nature dismissal with notice must be used.

Full or partial temporary redundancy

Full redundancy means the employee has no duty to work. Partial redundancy means that the employee works a percentage of his position and is made temporarily redundant for the remaining time.

The employee may be entitled to unemployment benefit during all or parts of the temporary redundancy period. Read more about the rules for temporary redundancy and unemployment benefit (nav.no)

Terms and conditions for temporary redundancy

All temporary redundancies must be objectively justified. Reasons given for the redundancy must be related to the undertaking, not the employee. Necessary cost reductions, including wage costs, may constitute a basis for temporary redundancy. The prerequisite is that the need for reductions is of a temporary nature.

Examples of objective grounds include: a decline in the number of orders, full stockrooms, practical obstacles to work, accidents, etc.

Undertakings that consider temporary redundancy should discuss this with the trade union representatives. Such discussions between the employer and trade unions representatives are not legally required in connection with temporary redundancy but may be stipulated in a collective pay agreement. In general, the discussion obligation thus only applies to undertakings bound by a collective pay agreement. However, we recommend that all undertakings follow this procedure.

Strike, lock-out or natural disasters

In the event of natural disasters (force majeure), strikes or other labour conflicts such as lockout, go slow campaigns or refusal to work overtime, the objective grounds condition is normally fulfilled.

Assessment of which employees should be selected for temporary redundancy

Pursuant to the Basic Agreement (LO and NHO) the principle of seniority should generally apply. It has been decided, however, that an undertaking may depart from the seniority principle because of objective needs.

Undertakings that are not bound by the Basic Agreement are not required to apply the seniority principle. However, selection must still be based on objective grounds. Other collective pay agreements may also contain agreements to apply the seniority principle.

Specific advice

Employees:

Check whether the company you work for is bound by a collective pay agreement that may apply to temporary redundancy.
Consult your shop steward (trade union representative) if you have any doubts about the reason for or selection of employees.
Please note that if you resign, you are entitled to a shorter period of notice when laid-off without pay.

Employers:

Remember the redundancy notification period and notification to NAV.
Remember that many aspects may be governed by the Basic Agreement, if you are subject to this agreement.

Notice of redundancy and the obligation to inform NAV

The employer must provide a written notice of redundancy 14 days before redundancy is implemented. The Basic Agreement between LO and NHO includes special notification rules in the event of force majeure, labour conflicts – such as strike and lockout – as well as unauthorised absence.

Pursuant to the agreement, the notification period does not apply to redundancy when the redundancy is due to labour conflicts or unauthorised absence. The Basic Agreement between LO and NHO stipulates a 2-day period of notice in the event of unforeseen events, such as natural disasters. Many of the Basic Agreement provisions on temporary redundancy have become common practice over time. The notification time limits are therefore also likely to apply to undertakings not bound by the Basic Agreement. However, other rules may apply if the undertaking is bound by another collective pay agreement or company regulations.

During the notice period, the employee must work and will receive salary as usual. The notice period is followed by a period when the employer must pay salary. After this period, the employee is usually entitled to unemployment benefit from NAV.

The employer must notify NAV of the temporary redundancy by completing a special form available from NAV.

Regulations relating to the duty to pay salary, duration of temporary redundancy and unemployment benefit

Following the notice period, the employer has a duty to pay salary. Thereafter, the employee may be made temporarily redundant without pay for a certain period.

An employee who has been made redundant can register as a job seeker and apply for unemployment benefit from NAV. Note that the employer must confirm the reason for the temporary redundancy.

Note that employees who engage in strike action or are affected by a lockout or other labour dispute, are not entitled to unemployment benefit. If you are laid off due to a labour dispute in the company where you are employed, you are only entitled to unemployment benefit if your salary or working conditions cannot be affected by the outcome of the dispute.Read more at NAV about temporary redundancy during strikes (in Norwegian, nav.no)

The employee's duty to return to work

The employee has a duty to return to work when the stated redundancy period is over. If the duration of the redundancy period has not been determined, the employee generally has a duty to return to work one to two days after the employer has told the employee to return. This means that work during the redundancy period must be of a temporary nature and with a non-determined time limit.

Holiday period

Holiday can be taken as normal and is not part of the redundancy period. This means that the Norwegian Act relating to Holidays also applies during redundancy. Within the provisions of the Holiday Act, the employee may be directed to take holiday during the redundancy period.

When taking holiday, the employee will be entitled to holiday pay accrued in the previous calendar year.

Resignation by the employee

After the employer's duty to pay salary has expired, the employee can resign with a 14 days' notice period. The resignation is valid from the date the employer receives it.

The employee must expect to work during the notice period, provided work is available in the undertaking. If not, the obligations to work and pay salary will cease. The 14 days' notice period also applies to partially dismissed employees. There are no clear regulatory provisions governing cases where the employee has resigned before the need for temporary redundancies arose. In the event of a dispute between the employer and the employee, it will be up to the courts to determine in each case whether the employee should be covered by redundancy without pay as other employees.

Other stipulations may apply to undertakings bound by the Basic Agreement between LO and NHO or other collective pay agreements.

Dismissal by the employer

If the employer dismisses an employee who has been made temporarily redundant, the employer's duty to pay salary will apply during the statutory or agreed notice period, in accordance with the ordinary provisions for dismissal.

The employee will normally have an obligation to work. However, if no work is available in the undertaking, the employer's duty to pay salary will still apply.