Extended obligations for employers within a group of companies in relation to restructuring and redundancies

At a glance

• In January 2024, the Working Environment Act (WEA) extended protection to employees of companies within a corporate group who are impacted by redundancies.
• If an employee, who works for an employer who belongs to a group (as defined in the WEA), is being dismissed due to a reduction in operations or rationalisation measures, the dismissal will not be justified if there is other suitable work to offer the employee in other Norwegian enterprises within the group.
• The preferential right to new employment in the same undertaking was also extended.
• Employers’ general obligations to provide information and engage in discussions about issues that impact their employees was also expanded.

The obligations for an employer, who operates within a corporate group, have been extended in situations where it is undergoing restructuring and redundancies. From 1 January 2024, the WEA extended protection for employees of companies within a corporate group, who are impacted by redundancies:

• If a notice of dismissal has been issued due to a reduction in operations or rationalisation measures, this is not objectively justified where the employer has other work within the company which is suitable for the affected employee. This has been extended, and from 1 January 2024, if an employer belongs to a group (as defined in the WEA), the dismissal is not justified where other suitable work is available at another Norwegian enterprise in the group.
• An employee who has been made redundant, given certain conditions, holds a preferential right to be re-employed within the same company, unless the vacancy requires qualifications that the employee does not possess. As of 1 January 2024, this preferential right to new employment was extended. If the employer belongs to a group (as defined in the WEA) the employee also has a preferential right to new employment in another Norwegian enterprise in the group, unless it concerns a position for which the employee is not qualified.
• The employers’ general obligation to provide information and engage in discussions about issues that impact the employees has also been extended. This responsibility now includes the parent company, which is required to create an adequate structure for collaboration, information sharing, and consultation across the entire corporate group. This obligation is applicable to corporate groups that collectively employ a minimum of 50 employees.