The right to remain in position after termination

The employee's right to remain in position is a distinctive feature of Norwegian labor law and an important factor in termination cases. What consequences does this right have for the employer?

When the employer terminates the employee, this triggers more rights for the employee. The employee has, among other things, the right to demand negotiations and to have the validity of the termination tested before the courts. In addition, the employee can, as a general rule, demand to remain in position until the case is finally settled. In practice, this is one of the employee's best negotiation counter in the case of termination - and a cost driver for the employer.

What does it imply that the employee demands to remain in the position?

If an employee is terminated, either because of the employee's own circumstances, the employer's or the company's circumstances, the starting point is that the period of employment ends after the notice period has expired. If the employee believes that the termination is invalid, and therefore takes legal action against the employer, the notice period will normally expire long before the case is finally decided in court.

The problem that can then arise is that the employee, after a long process where the court concludes that the termination is invalid, must re-enter the position he/she has been out of for a long time. This can also have major financial consequences for the employee, who will not receive salary after the employment period has ended.

In order to counteract these problems, Section 15-11 of the Working Environment Act gives the employee the right to demand to remain in position while negotiations are ongoing and when lawsuits have been brought within the deadlines set by the law. The main purpose behind the provision is to ensure continuity in the conditions of employment  in the event that the dismissal is ultimately found to be invalid.

The right to remain in position is a safety mechanism to ensure that the employee is not unjustly deprived of his/her rights as a result of an invalid termination. The right to remain in the position means that the rights and obligations that follow from the conditions of employment remain as long as the termination case is ongoing. This means that the employee must perform the work tasks that follow from the employment contract and is entitled to receive wages and other benefits in the conditions of employment.

Are there any exceptions?

The fact that the employee shall remain in the position well beyond the notice period can have major consequences for the employer. Salary costs can be high, and the employer can be left with an employee who does not work. The Working Environment Act therefore opens up the possibility for the employer to put forward a demand that the court must rule that the employee shall resign from the position while the case is being processed. The term is that the court finds it unreasonable for the conditions of employment to be maintained.

Here, the Court must consider the interests and needs of both the employee and the employer. Relevant factors in this assessment include the basis for the termination, what is the likely outcome of the case, whether the employee has obligations to support someone and the employer's financial position. Both the legislative preparations and case law indicate that the employee is not normally required to resign in the event of workforce reductions and the like, while less is required if the termination is justified in the employee's own circumstances.

What about dismissal?

In the case of dismissal, the main rule of the law is different from that in termination cases: Here, as a starting point, the employee does not have the right to continue in the position while the case is pending. The rationale for this is that dismissal presupposes that the employee has substantially breached the employment contract, and it is then not reasonable that the person in question should be able to continue to demand their rights in the contractual relationship. The same rule also applies to hired, temporary employees and employees who are terminated during the probationary period.

Because of the different rules, it can be tempting for the employer to go for dismissal instead of termination, in order to avoid the employee's right to demand to remain in the position. In the same way that the employer in termination cases can put forward a demand that the employee resign from the position, a dismissed employee can, however, put forward a demand that the court issue a ruling that the person concerned should remain in the position as long as the case is pending. In the past year, the courts of appeal and the Supreme Court's appeals committee have handed down several decisions where this has been the situation.

In these cases, the court first assesses whether the grounds for dismissal are questionable. In cases where the grounds for dismissal are questionable, the Supreme Court's appeals committee has stated that there will "often" be reason to let the employee remain in the position. Among other things, this is to prevent the employer deliberately giving a dismissal in order to deprive the employee of the right to remain in the position.

In addition to assessing whether the grounds for dismissal are questionable, the court must also make a specific assessment of whether there is sufficient reason to allow the employee to remain in the position. This is emphasized in a relatively new decision from the Supreme Court's appeal committee ruling - HR-2022-1348-U.

Here, the appeal committee emphasizes that it is not sufficient to only look at the employee's interests - the employer's interests must also be factored into the assessment. This means that the assessment by and large corresponds to the assessment in termination cases where the employer requires a ruling for the employee to resign.