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The Norwegian government proposes to extend the temporary layoff period until 1 July 2021

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Legal news
calendar 31 January 2021
globus Norway

Many companies have been affected by coronavirus and the national restrictions introduced as a consequence. For many companies this has meant having to temporarily lay off employees over a longer period. The Norwegian government has previously increased the maximum temporary layoff period from 26 to 52 weeks but is now proposing to extend the period until 1 July 2021. The proposal aims to prevent unnecessary terminations in light of the new vaccine.

Normally, employees can only be temporarily laid off for 26 weeks. However, in November 2020, the Norwegian government extended the temporary layoff period to 52 weeks to avoid unemployment. For employees who have been temporarily laid off since March 2020, the maximum temporary layoff period will soon expire, which might lead to terminations.

However, the Norwegian government has started vaccinations against coronavirus, and vaccines will gradually become available for everyone. This will result in fewer restrictions and may lead to more temporarily laid off employees being able to return to the workplace. To prevent unnecessary terminations, the Norwegian government therefore proposed to extend the maximum temporary layoff period until 1 July 2021.

Although there is a consensus of an increased temporary layoff period, the opposition in the Norwegian parliament has asked the Norwegian government to extend the period for the purpose of predictability, until 1 October 2021.

The second employer period

The employer period refers to a set number of days at the start of the temporary layoff period, where companies are required to still pay salary to the temporarily laid off employees. During the first part of the coronavirus, the employer period was reduced to two days, but in September 2020 the period was extended to ten days.

With the extension of the temporary layoff period from 26 to 52 weeks, it was simultaneously decided to implement a second employer period. The second employer period lasts five days and applies when employees have been temporarily laid off for 30 weeks or more. The second employer period was initially to apply from January 2021, but has since been changed to 1 March 2021.

IUNOs opinion

Temporary layoffs can be a positive alternative to terminations, both for the company and its employees, as the employment relationship remains, and the economic aspect is put on hold. By the end of the temporary layoff period, the employees will keep their position, and the company can resume work functions without needing to hire new employees.

Even if temporary layoffs can be a positive alternative, the conditions for temporary layoffs must be met. The conditions include that, a temporary layoff requires a just cause, there must be a need for work stoppage, and this need must be due to the company’s conditions. Further, the conditions that justify the temporary layoffs must be temporary. All conditions must be met throughout the whole temporary layoff period.

IUNO recommends that companies enters into discussions with its employee representatives on the need for both new temporary layoffs and continued temporary layoffs, even if not required under a collective bargaining agreement. This is especially recommended where only some employees are being temporarily laid off because this entails an assessment of which employees to include and exclude.

IUNO has previously written about the salary compensation scheme for companies who brought back their temporarily laid off employees between October and December, here.

[Proposed regulation on the changes of the periods of exemption of the duty of salary and the corresponding right to unemployment benefits during temporary layoffs of 15 January 2021]

Normally, employees can only be temporarily laid off for 26 weeks. However, in November 2020, the Norwegian government extended the temporary layoff period to 52 weeks to avoid unemployment. For employees who have been temporarily laid off since March 2020, the maximum temporary layoff period will soon expire, which might lead to terminations.

However, the Norwegian government has started vaccinations against coronavirus, and vaccines will gradually become available for everyone. This will result in fewer restrictions and may lead to more temporarily laid off employees being able to return to the workplace. To prevent unnecessary terminations, the Norwegian government therefore proposed to extend the maximum temporary layoff period until 1 July 2021.

Although there is a consensus of an increased temporary layoff period, the opposition in the Norwegian parliament has asked the Norwegian government to extend the period for the purpose of predictability, until 1 October 2021.

The second employer period

The employer period refers to a set number of days at the start of the temporary layoff period, where companies are required to still pay salary to the temporarily laid off employees. During the first part of the coronavirus, the employer period was reduced to two days, but in September 2020 the period was extended to ten days.

With the extension of the temporary layoff period from 26 to 52 weeks, it was simultaneously decided to implement a second employer period. The second employer period lasts five days and applies when employees have been temporarily laid off for 30 weeks or more. The second employer period was initially to apply from January 2021, but has since been changed to 1 March 2021.

IUNOs opinion

Temporary layoffs can be a positive alternative to terminations, both for the company and its employees, as the employment relationship remains, and the economic aspect is put on hold. By the end of the temporary layoff period, the employees will keep their position, and the company can resume work functions without needing to hire new employees.

Even if temporary layoffs can be a positive alternative, the conditions for temporary layoffs must be met. The conditions include that, a temporary layoff requires a just cause, there must be a need for work stoppage, and this need must be due to the company’s conditions. Further, the conditions that justify the temporary layoffs must be temporary. All conditions must be met throughout the whole temporary layoff period.

IUNO recommends that companies enters into discussions with its employee representatives on the need for both new temporary layoffs and continued temporary layoffs, even if not required under a collective bargaining agreement. This is especially recommended where only some employees are being temporarily laid off because this entails an assessment of which employees to include and exclude.

IUNO has previously written about the salary compensation scheme for companies who brought back their temporarily laid off employees between October and December, here.

[Proposed regulation on the changes of the periods of exemption of the duty of salary and the corresponding right to unemployment benefits during temporary layoffs of 15 January 2021]

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Etgen Reitz

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Aurora Braut Bache

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