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Employees lost years of seniority

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calendar 29. August 2021
globus Norway

In connection with a temporary layoff process triggered by coronavirus, the question on how the affected employees’ seniority had to be calculated arose. Seniority either had to be calculated based the total time of employment or continuous time of employment. According to the Norwegian Labour Court, seniority had to be calculated based on continuous time of employment. Several employees thereby “lost” years of seniority.

As a direct consequence of the coronavirus pandemic, a company which owned and operated airports began a temporary layoff process. During the temporary layoff process, disagreement arose on how the affected employees’ seniority had to be calculated. Seniority should either be calculated based on the total time of employment or continuous employment.

In the past, several employees had resigned from the company because they knew their positions had been threatened due to an expected redundancy. However, within a period of two years, many of them came back and got re-employed by the company. For these employees, the question on how seniority should be calculated was therefore important. If seniority should be calculated based on their continuous employment, they would have a significantly lower seniority for the purpose of selecting the affected employees, than if seniority was calculated based on total time of employment, back from when they had first been employed.

As the issue could not be resolved, the case was brought to the Norwegian Labour Court. The court then had to decide how the employees’ seniority should be calculated.

Continuous time of employment is the main rule

The parties had not entered into any previous agreement on how to calculate seniority. According to the Norwegian Labour Court however, the main rule had to be continuous time of employment when calculating an employee’s seniority.

Two factors especially impacted the court’s assessment. First, that the agreement, which among other things regulated the rules on the temporary layoff process, was based on the Main Agreement between LO and NHO. In the Main Agreement, the main rule was that seniority had to be calculated based on the continuous time of employment. Second, that the company had previously established an internal restructuring policy. According to the policy, seniority had to be calculated based on the continuous time of employment. The court noted that when that policy had been drafted, no comments had been made by the employee’s association. As no objections had previously been made, it could be assumed that that calculation method could be applied and was acceptable for the employee’s association and so, the employees.

In conclusion, the court therefore found that the seniority had to be calculated from the last date of employment. Accordingly, the re-employed employees lost up to several years of employment. This loss would affect them in the ongoing temporary layoff process, as well as any later redundancy processes.

IUNO’s opinion

The question on how to calculate seniority has not previously been dealt with by neither the Norwegian Labor Court nor the Norwegian Supreme Court. Although the judgement concerns a specific main agreement, it gives certain clarifications on how to calculate seniority in connection with temporary layoffs, as well as terminations. Going forward, the judgement will be important for the understanding of seniority in relation to other main agreements. The judgement can also be relevant for companies that are not bound by a collective agreement when seniority is used as a selection criterion.

IUNO recommends that companies carry out concrete and individual assessments in each case., irrespective of the main rule specified by the judgement. Whether a selection is justified will depend on several factors, and both the selection criteria and selection of employees should be discussed with the employee representatives.

[The Norwegian Labour Court’s judgement AR-2021-16 of 3 June 2021]

As a direct consequence of the coronavirus pandemic, a company which owned and operated airports began a temporary layoff process. During the temporary layoff process, disagreement arose on how the affected employees’ seniority had to be calculated. Seniority should either be calculated based on the total time of employment or continuous employment.

In the past, several employees had resigned from the company because they knew their positions had been threatened due to an expected redundancy. However, within a period of two years, many of them came back and got re-employed by the company. For these employees, the question on how seniority should be calculated was therefore important. If seniority should be calculated based on their continuous employment, they would have a significantly lower seniority for the purpose of selecting the affected employees, than if seniority was calculated based on total time of employment, back from when they had first been employed.

As the issue could not be resolved, the case was brought to the Norwegian Labour Court. The court then had to decide how the employees’ seniority should be calculated.

Continuous time of employment is the main rule

The parties had not entered into any previous agreement on how to calculate seniority. According to the Norwegian Labour Court however, the main rule had to be continuous time of employment when calculating an employee’s seniority.

Two factors especially impacted the court’s assessment. First, that the agreement, which among other things regulated the rules on the temporary layoff process, was based on the Main Agreement between LO and NHO. In the Main Agreement, the main rule was that seniority had to be calculated based on the continuous time of employment. Second, that the company had previously established an internal restructuring policy. According to the policy, seniority had to be calculated based on the continuous time of employment. The court noted that when that policy had been drafted, no comments had been made by the employee’s association. As no objections had previously been made, it could be assumed that that calculation method could be applied and was acceptable for the employee’s association and so, the employees.

In conclusion, the court therefore found that the seniority had to be calculated from the last date of employment. Accordingly, the re-employed employees lost up to several years of employment. This loss would affect them in the ongoing temporary layoff process, as well as any later redundancy processes.

IUNO’s opinion

The question on how to calculate seniority has not previously been dealt with by neither the Norwegian Labor Court nor the Norwegian Supreme Court. Although the judgement concerns a specific main agreement, it gives certain clarifications on how to calculate seniority in connection with temporary layoffs, as well as terminations. Going forward, the judgement will be important for the understanding of seniority in relation to other main agreements. The judgement can also be relevant for companies that are not bound by a collective agreement when seniority is used as a selection criterion.

IUNO recommends that companies carry out concrete and individual assessments in each case., irrespective of the main rule specified by the judgement. Whether a selection is justified will depend on several factors, and both the selection criteria and selection of employees should be discussed with the employee representatives.

[The Norwegian Labour Court’s judgement AR-2021-16 of 3 June 2021]

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Etgen Reitz

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Aurora Braut Bache

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