New bill enhancing employee protection adopted by the Norwegian Parliament

The Bill involves changes to the Working Environment Act’s definition of an “employee”, as well as the employer’s liability within a group of companies. The Bill also introduces a new presumption rule stating that one shall be considered an employee unless the principal makes it highly probable that a contractor relationship exists. The new regulations could lead to more cases regarding "reclassification" to an employment relationship.

In addition, in the event of downsizing, companies that are part of a group of companies will be obliged to offer other suitable work and preferential rights to a new position in other companies which are part of the group of companies. This will in our opinion imply significant logistical challenges for a company that in cases of downsizing will have to document whether there are any other suitable and available positions within the group of companies, what qualifications are needed for a possible position and whether the employee in question fulfills the necessary qualifications. Group companies will, therefore, have to co-operate more closely in order to meet the new requirements.

The mentioned changes enter into force 1 January 2024. We recommend that preparations for the changes are initiated now.