New requirements for employment contracts - what employers need to know

From 1 July 2024, companies must meet a number of new requirements for the content of employment contracts.  In the worst-case scenario, failure to provide information may mean that the employee is given permanent employment.

The Norwegian Parliament recently adopted a number of new requirements for what organisations and employers must provide information about in employment contracts, cf. (Innst. 60 L (2023-2024) . The government's proposal was submitted to the  Norwegian Parliament on 16 June this year (Prop. 130 L 2022-2023) and means that businesses and employers must change the standard contracts.

The changes to the employment contracts come as a result of the Norwegian implementation of the EU Directive on more predictable and secure working conditions, also known as the Working Conditions Directive. The requirements for labour contracts will apply to all new contracts from the time the amendments enter into force. For existing contracts, these must be supplemented in line with the changes if the employee requests it, with a deadline of two months for the employer.

The biggest changes are in employment contracts for temporary and part-time employment.

New requirements must be met

For all employees, employment contracts must now contain the following information.

• If the work is to be performed periodically or the daily and weekly working hours will vary, the employment contract must specify this and establish or provide a basis for determining when the work will be performed.
• What arrangements apply to shift changes and work beyond the agreed working hours, as well as payment for such work, must be disclosed in the employment agreement.
• If there is no fixed workplace, the employer must inform the employee that they may work at different locations or have the freedom to decide.
• The rights of employees to training and competence development.
• Benefits organized by the employer related to social security, and the names of institutions receiving payments from the employer in such cases (e.g., benefits related to illness or pregnancy).
• The identity of the hiring company in the case of temporary employment agencies.
• Entitlement to vacation and holiday pay, as well as other absences paid by the employer.
• The procedures to be followed to terminate the employment contract.
• The various components of the salary must be specified separately.
• Arrangements for work beyond the agreed working hours and payment for such work (extra work and overtime).

In practice, this means that the templates for employment contracts need to be updated to meet the new information requirements. The information must now be in place as soon as possible and no later than seven days after the commencement of the employment.

Lack of information may result in permanent employment - presumption rules

The legislative changes introduce two presumption rules: The first rule states that if the employer fails to inform the employee that the employment is temporary, the employee may assume that the employment is permanent. The same applies to part-time contracts, where a lack of information about the scope of the position will lead to the employee's claimed scope being assumed. In both cases, the employer must make it highly probable that something else is the case. These two rules are intended to ensure predictability for temporary and part-time employees, and to fulfil the directive’s objective of ensuring clarity for atypical employees with regard to the form and scope of employment.

New rules on probationary periods

New rules on probationary periods have also been adopted. The probationary period may not exceed more than half the length of the temporary contract. Nor is it permitted to agree on a new probationary period if the employee continues in a significant or similar position. In the case of permanent employment, a new probationary period may nevertheless be agreed if the employee's previous period of employment and the new probationary period together do not exceed six months. Corresponding rules on probationary periods are also included in the State Employees Act.

Right to request a permanent job

Temporary and part-time employees will have the right to request a form of employment with more predictable and secure working conditions. The employer must respond to this request in writing with a justification within one month. The rule applies to anyone who has been employed for more than six months. However, the right does not apply if less than six months have passed since the previous request.

Recommendation:

Employers should review the standards for their employment contracts to ensure that they meet the requirements of the law. This will be particularly important when entering into temporary employment and part-time contracts.