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What is restructuring?

Restructuring involves changes that affect employees' working conditions to a greater or lesser extent than daily/normal variations. This may include, for example, mergers of companies, separation/division of business (demerger), geographical relocation, organisational changes within a company, downsizing, efficiency measures, introduction of new technology, new/changed tasks for the individual, new management or new work tools.

The employer has a duty to inform employees and involve union representatives, safety representatives and, if applicable, the working environment committee (AMU) in discussions on how restructuring is to take place.

The employer shall, as early as possible, inform and discuss with union representatives changes that may be significant for the employees. After the employer has discussed the decision on restructuring with union representatives, the employees will be informed about the further process/course of the restructuring.

Read more about co-determination here.

The right to co-determination is primarily exercised through the union representatives in the company. It is therefore important that you as an employee contact your union representative if you have questions or input to the restructuring that is taking place. As an employee, you also have the right to information, participation and competence development in restructuring processes to ensure a fully safe working environment.

Below is information and advice related to the most common categories of restructuring:

Reorganisation / change of work tasks

Within the limits of the employer's right to manage (the right to lead, distribute and organise the work within the framework of the employment relationship), the employer can adjust your work tasks.

Major changes that alter the basic character of an employment contract may require that the employment relationship be terminated and a new employment contract be offered. This is often referred to as a termination of change (notice of change to terms of employment; endringsoppsigelse) and requires objective grounds. The requirement for objective grounds implies that the employer must comply with the requirements that apply to ordinary dismissals.

This means, among other things, that in the non-state sector, a consultation must be called. In the state and public sector in general, an advance notice must be sent in accordance with the Public Administration Act. The employee must have the opportunity to express themselves before the employer makes their decision.

In some cases, one disagrees with the employer as to whether the change(s) in the employment relationship is/are so significant that it/they require processing as a termination of change. In such cases, it is important to contact the local union representative quickly and, if you do not have an union representative, contact the Forskerforbundet central office for assistance. As a starting point, you have a duty of resignation in relation to the employer's instructions, so that in order to avoid the risk of a personnel case regarding the employer's decision, you must, as a general rule, adhere to it temporarily. You cannot wait long to react, but before protesting, it may be wise to obtain a legal assessment of whether the change(s) is/are sufficiently significant that they/it is legally outside the employer's right to manage.

Even if a change is outside the limits of the right to manage, if you reach an agreement, you can enter into a new employment contract that replaces the old one. Remember that then you may be in a negotiating position in relation to salary and working conditions.

Downsizing

The legislation sets strict requirements for both case processing and objective grounds for dismissing employees. This also applies when the need for downsizing is due to the company's circumstances, such as requirements for financial cuts, etc.

Selection group and criteria for downsizing

In cases where it is clear that downsizing cannot be avoided by other cost-saving measures, the employer has a duty to discuss both the selection group and criteria for selection for dismissals with the union representatives in the company.

The selection group refers to the definition of where in the company the dismissals will take place. The clear main rule is that the entire legal entity constitutes the selection group.

The most common criteria for selection are a comprehensive assessment of the company's future need for competence, the employee's seniority and social conditions of the individual employee. During the selection, the employer must compare and select those who are relevant for dismissal in relation to the selection criteria.

Preferential right to other suitable work/position

Before the employer can consider proceeding with dismissal, the employer must decide whether there is other suitable work that can be offered to the employee. If the company you work for is part of a group, the employer has a duty to look for such work throughout the group. If there is such work, there will be no basis for a dismissal.

In the state sector, more detailed rules regarding what shall be considered another suitable position are to be found in the regulation to the Civil Service Act (in Norwegian)

In the state sector, an employee who is dismissed due to the company's circumstances may also have preferential rights to another suitable position in the state.

If you are to have preferential rights, it is a prerequisite that you are assessed to be qualified for the position you are applying for preferential rights to. There is no requirement that you must be the best qualified.

Consultations / written advance notice

Before your employer makes a decision to dismiss you, they must call an individual consultation meeting in accordance with Section 15-1 of the Working Environment Act.

You shall have the opportunity to be accompanied by a union representative or other advisor at such a meeting. At this meeting, the employer shall present the basis they believe they have for a possible dismissal of you. They must explain both the background for why dismissals are necessary and why it may be relevant to dismiss you specifically based on the selection criteria. At the consultation meeting, you shall also have the opportunity to give your views on the employer's assessments.

It is important that you are given sufficient time with your union representative/ advisor/ lawyer to prepare for the consultation. At the meeting itself, it is important to ensure that minutes are taken and that you are given enough time to provide your input to these. It is also common to be able to request a break during such a meeting where you and your advisor can discuss what the employer has presented and what input and questions you want to provide.

In addition to the consultation meeting (Section 15-1 meeting) as described above, in the municipal/county municipal sector, a written advance notice of dismissal must be given, to which you will be allowed to comment. You do not have the right to appeal the decision on dismissal, as is the case for dismissals in the state sector.

In the state sector, individual consultation meetings are not held. However, the state also requires a written, reasoned advance notice before a decision on dismissal, to which you will be allowed to comment. Furthermore, you can request to meet in person and make an oral statement to the appointment board when the case is being processed there.

In contrast to the municipal and private sectors, as a state employee, you also have the right to appeal the decision on dismissal.

 

Severance packages (as an alternative to dismissals)

In this context, severance packages are understood as a tool in the restructuring process to avoid dismissals as much as possible. Severance packages are voluntary agreements on termination of employment in return for compensation and any other benefits such as exemption from the duty to work, career guidance and support for further education.

It is important to be aware that accepting a severance package can have consequences for you, both in terms of loss of income and loss of pensionable earnings, and the possibility of withdrawing collectively agreed retirement pension (AFP).

It can also take time to move into other relevant work and it is important to be aware that NAV converts the agreed severance pay into monthly salaries, and that you are not entitled to unemployment benefits until the period with severance pay is over. It is also important to ensure that the severance package does not entail a waiting period/waiting time for the right to unemployment benefits after the period with severance pay is over. Therefore, it must be specified in the severance agreement that this has come about as an alternative to downsizing due to the company's circumstances.

It is important to note that our attitude is that severance packages that are offered at this stage in the process and as standard terms must be offered broadly in the organisation and be based on applications. It should not be accepted that the employer only presents severance packages to individuals they have singled out in the company.

Geographical relocation

Based on the right to manage, the employer can decide on geographical relocation within normal travel distance from the current workplace. However, it is not permitted without the employee's consent or authority in the employment contract to make changes that require you to commute weekly or have to change your place of residence.

The courts have placed great emphasis on what is stated about the place of work in your employment contract. If a specific place of work is stated, for example Oslo, the employer has less flexibility than if it says, for example, that "the place of work is currently Oslo".

Geographical relocation in the state

In the state sector, it happens from time to time that it is decided politically that a company should move to another location. For such cases, there is a special agreement on covering relocation costs and a special agreement on the use of instruments in restructurings in the state to facilitate the relocation process. The employer can, for example, decide to provide support for commuting for a certain period of time, support for acquiring new housing, etc. It is the employer who, after discussion with the union representatives in the company, makes the final decision on the use of the instruments.

Even if the decision on relocation is politically determined, the actual implementation of the relocation and the use of instruments to reduce the consequences for the employees must be discussed with the union representatives.