New rules in the Working Environment Act

New rules in the Working Environment Act came into effect as of 1 July 2024. From this date on, all new employees must receive employment contracts that meet the extended legal requirements. In addition, all existing employees can request a new agreement.

With effect from 1 July 2024, several new provisions apply. This includes, inter alia:

• Additional requirements for the content of employment contracts
• Open-ended employment is presumed if the employment contract does not specify that the employment is a fixed-term employment
• The employment extent claimed by the employee shall be presumed, if the employment contract does not regulate the employment extent
• Stricter requirements for when a written employment contract must be available for the employee at the latest
• Stricter requirements for when changes in the aspects of the employment relationship must be included in the employment contract
• The limitations on the ability to agree on a new probationary period of employment if the employee is to continue in the same position, or in a similar position that the employee has had in the company, has been specified

It is particularly important that the employer is cautious when including the now required information in the employment contract, otherwise, the employer may end up narrowing the scope of their own managerial prerogative. Read more below on how to take precautions against this.

New requirements regarding the content of employment contracts

The list of information that must be included in the employment contract has been extended. The basis for this is Norway’s implementation of the EU’s Working Conditions Directive.
The employment contract must now include information on:

• whether the employee is free to determine his or her place of work
• the employee’s entitlement to paid leave
• procedures for termination of the employment relationship
• the remuneration, including initial basic amount and any other component elements, indicated separately
• whether the daily or weekly working hours vary
• arrangements for shift changes and work beyond agreed working hours
• in the case of temporary agency workers, the identity of the user undertakings
• the training entitlement provided by the employer, if any
• Contribution to social security provided by the employer and the identity of the social security institutions receiving the contributions by the employer (typically pension and insurance)

The mentioned information must be included in the employment contract or in an attachment. For example, it is not sufficient for it to be addressed in the employee handbook.
For the employer, it is important to distinguish between terms agreed with the individual employee and information provided by the employer about arrangements in the company. If the employer is not cautious of this distinction when updating the employment contracts, the employer may be implementing restrictions on the employer’s managerial prerogative, giving the employer less room to make changes in the future.

The legislator has specified in the preparatory works to the new provisions, that the amendments are not intended to reduce the employer’s managerial prerogative. This means that the employer, by being cautious of this, can retain the same room for maneuver as today.

A solution may often be to create a standardized attachment to the employment contracts that contains detailed information in line with the new legal requirements. The attachment should clearly state that it does not grant individual rights to the employees and that the employer has the right to make changes.
The advantage of a standardized information attachment is that it can easily be sent out to the employees in case of changes. The law now requires that changes in the aspects of the employment relationship must be included in the contract at the latest on the day on which it takes effect. In the case of such changes, it would be labor intensive to adjust all individual employment contracts. However, it is easy and efficient to make changes in a standard attachment and send the same revised attachment to everyone.

Always specify whether it is a fixed-term employment and the employment extent

If the employment contract does not specify that it is a fixed-term employment relationship, it shall be presumed that the employee has an open-ended employment relationship. This does not apply if the employer can prove with a high degree of probability that the employment is a fixed-term employment relationship.
Similarly, the employee’s claim about the employment extent shall be presumed if the employment contract does not specify the employment extent. This does not apply if the employer can prove with a high degree of probability a different employment extent.

For employers who has employees with a fixed-term employment or part-time position, it may be wise to check what is stated in the employment contracts.

Short deadline to update the employment contract in case of changes

In employment relationships with a total duration of more than one month, a written employment contract must be available as soon as possible and within a period of seven days starting on the first working day.

Changes in the aspects of the employment relationship must be included in the employment contract as soon as possible and no later than the day the change takes effect. This does not apply to changes that merely reflect a change in the laws, regulations, or collective agreements.

Limitations on the ability to agree on probationary period

The legal provisions on probationary period are also being changed. The legal protection for fixed-term employment relationships has been strengthened as now the maximum duration of the probationary period for these employees is half the duration of the employment period, and maximum six months.

Furthermore, the previous unwritten rule stating that in the case of the renewal of a contract for the same function or tasks, the employment relationship shall not be subject to a new probationary period, is now codified. In the case of an open-ended employment, a new probationary period can still be agreed upon if the employee’s previous employment period and the new probationary period combined do not exceed six months.

Employers should be aware of these limitations when entering a new employment contract.