Violation of working hours regulations can result in prison sentences

The Supreme Court has for the first time imposed a prison sentence for violating the Working Environment Act's provisions on working hours.

Facts

The case involved a defendant who was both Chairperson of the Board of Directors and CEO of the company Veireno, which ran the collection of household waste in Vestfold and Oslo from 2015 and 2016, respectively. Both in Vestfold and Oslo there were early implementation problems and the company had extensive use of illegal overtime. The Norwegian Labor Inspection Authority conducted inspections in both Vestfold and Oslo and revealed several violations of the working hours regulations. HR staff also pointed out the problems with overtime use on an ongoing basis. However, the CEO & Chairperson failed to comply with the working hours rules. In early 2017, Veireno lost its contracts and the company went bankrupt.

Legal backdrop

Section 19-1 of the Working Environment Act contains rules on penalties for managers of companies for violating the rules of the Working Environment Act. The Working Environment Act also contains rules on penalties for employees in section 19-2 and for enterprises in section 19-3.

Pursuant to section 19-1 first paragraph of the Working Environment Act, intentional or negligent violations will be punishable by a fine or imprisonment for up to one year, while particularly aggravating circumstances may result in imprisonment for up to three years under section 19-1 second paragraph. The sentence was sharpened in 2015. Prior to this, the sentence was three months and two years respectively.

When determining whether particularly aggravating circumstances exist, particular importance shall be attached to whether the offence involved a serious hazard to life or health or if it was committed notwithstanding orders or requests from the authorities.

Not all provisions of the Working Environment Act are penalized, and traditionally only breaches of HSE rules and serious accidents have led to prison sentences. In this case, however, it was sections 10-6 and 10-8 of the Working Environment Act on overtime, and daily and weekly working hours that were not complied with. These provisions are punishable because violations of these provisions can cause major health and social burdens.

Veireno, had failed to comply with the working hours provisions because several employees had, among other things, less than 11 hours of continuous leave within 24 hours, or less than 35 hours within 7 days.

There were also several cases where employees worked more than 13 hours over 24 hours and more than 48 hours per seven days. After the Labor Inspection Authority for a period approved that the workers could work up to 65 hours a week, there were also several violations of this overtime limitation.

Punishment and decisive matters

The CEO & Chairperson was sentenced to one year and three months unconditional imprisonment by the District Court but appealed to the Court of Appeal where he was sentenced to nine months unconditional prison. The CEO & Chairperson appealed the case to the Supreme Court. In the Supreme Court case, the CEO & Chairperson acknowledged that he was responsible for the violations of the working time regulations. It was therefore only a matter of sentencing.

Being in doubt, the Supreme Court finally decided that the CEO & Chairperson should be punished in accordance with Section 19-1, second paragraph of the Working Environment Act, because there were particularly aggravating circumstances.

The Supreme Court found that the violations in the Vestfold project were not serious enough to be considered as particularly aggravating circumstances, as the violations occurred early in the contract period, and most of the violations were less severe. Furthermore, there was no serious risk to life or health when being in noncompliance with the working hour regulations in this case.

The Supreme Court considered that there were particularly aggravating circumstances after the first start-up period in the Oslo project. The CEO & Chairperson played a central role in Veireno and should have learned from the problems in the Vestfold project and implemented measures to prevent breaches of working time regulations.

It was emphasized that the violations were intentional, systematic and had occurred over a certain period. The violations also continued after Veireno had received several inspection reports from the Labour Inspection Authority, and after HR staff had continually pointed out the problems. The Supreme Court also emphasized that Veireno was unable to comply with the working time regulations after receiving an exemption from the Labor Inspection Authority so that the employees could work up to 65 hours per week.

In the sentencing, the Supreme Court chose to reduce the sentence from nine months to 120 days unconditional prison. The reason for this was that no one had previously been sentenced to prison for this type of violation of the Working Environment Act. In addition, most of the violations were less serious. There had also been significant overtime use both in the Oslo municipality and in Norway in general. Emphasis was also placed on the time that had passed from the case was dealt with in the District Court in September 2018 until the Supreme Court ruling came in mid-February 2020.

What can we learn from the Supreme Court's decision?

The Supreme Court's decision gives a clear signal that violation of the working time regulations may result in imprisonment. Although the 120-day sentence may initially seem low compared to the result in the District Court and the Court of Appeal, it is nonetheless more stringent than previous Supreme Court practice.

The Supreme Court's decision shows a development in the form of stricter penalties for violations of the provisions of the Working Environment Act in accordance with the legislature’s intention. Based on the court’s reasoning, there is reason to believe that breaches of the working time regulations could result in even stricter penalties, especially if there are serious violations.

The Supreme Court's decision gives all leaders reasonable grounds for reflection. In order to avoid criminal liability, it is important to establish good routines to ensure that the labour regulations and other provisions of the Working Environment Act are complied with.