We have been sued – now what?
Attorney Svein Steinfeld Jervell
Though legal disputes concerning employment law rarely find their way to the court room, court cases within employment law do happen from time to time. Lawsuits, although stressful, must be handled appropriately, with care and professionally. Norwegian employment law is an area for specialists. There are procedural rules and deadlines for the litigation. Claims would need to be formulated in certain ways and there are alternative routes that one can pursue in filing and handling them.
This article focuses on the employer’s handling of lawsuits in Norway. For the most part employers will be the recipient of lawsuits, as it is the employee, or occasionally a union on behalf of employees, who most often file lawsuits, thus becoming the plaintiff. The exception is cases of damages against former employee’s due to breach of employment covenants such as non-compete clauses, customer clauses or due to other disloyal actions. In such cases employers often instigate legal proceedings and take on the role as plaintiff.
The article is based on our experience in handling such lawsuits both for our Norwegian and international clients. If our services are required please do not hesitate to contact us either through e-mail, phone or by using our contact form.
The outset – which employment related issues do go to court?
Employment cases involve a range of issues. Nevertheless, most employment cases that do go to court involve the legality of;
- termination of employment (for instance dismissal of employees with or without notice), or
- temporary employment.
Other issues that from time to time are settled by courts are disputes concerning;
- wages, including minimum wages due to general applicable collective agreements,
- working hours, including overtime compensation,
- breach of managerial prerogative, for instance change in employee’s workplace or position / title or assignments,
- issues relating to transfer of undertakings,
- control measures,
- discrimination (age, sex, religion, ethnicity etc.),
- suspension, or
- working environment issues, including harassment and retaliation for notification of censorable conditions within the undertaking (whistblower cases).
Furthermore, rights and obligations grounded in collective agreements, as well as legality of labour dispute means, is exclusively settled by the Labour Court.
Why you should engage a lawyer who specializes in employment law
Upon reception of a lawsuit concerning employment law, it would nearly always be advisable to hire a lawyer with expertise within employment law. This means that the lawyer as a minimum requirement mostly works with employment law. The legal terrain of Norwegian employment law with set deadlines, procedural rules, strategies etc. does require professional assistance. Some routes that might be considered viable might prove not be after a closer analysis.
Reception of a lawsuit – how do I proceed?
Lawsuits are initiated by the plaintiff filing a petition to the court. The defendant is then required to respond to the complaint within a set deadline. Failure to respond within that deadline might result in ruling in favour of the plaintiff by default, meaning that the plaintiff would win the case in full and by default. The possibility of appeal on so-called default rulings is slim, as the threshold for overruling is high. First and foremost, it is therefore of the utmost importance that the defence is filed within the deadline set by the court.
Generally, the defendant is entitled to one extension of the deadline. Additional extensions usually require consent from the plaintiff. During the so-called court holiday, which is in July and the Easter and Christmas holidays, the deadline for the defence is prolonged by law for the duration of the court holiday.
The preparation of defence within the set deadline
The complaint should lay out the claim and the foundation for the claim, including the factual basis and the relevant regulation supporting the claim. If the claim or its foundation is so unclear that a defence motion cannot be prepared adequately, the defendant might file a petition to the court that the complaint must be corrected by the plaintiff. Failure by the plaintiff to correct the lawsuit within the date set by the court, might result in a dismissal of the lawsuit. The court can, on its own initiative, demand that the complaint is corrected, if the complaint is sufficiently unclear.
If the claim is sufficiently clear, the defendant should check whether there are grounds for dismissal of the case. The most relevant grounds are;
- lack of jurisdiction by Norwegian courts, or
- incorrect legal venue (the claim must be brought before the Labour Court, to the consolidation board or to the dispute resolution board).
It might also be the case that the claim does not constitute a claim in a legal sense or that the plaintiff is lacking so-called sufficient legal interest.
If the plaintiff has initiated a claim towards the wrong entity, for instance the wrong company within the corporate structure, the case is usually not to be dismissed but that defendant is to be acquitted.
If the lawsuit involves multiple claims or even multiple plaintiffs, the defendant should check whether the claims and plaintiffs can be combined in a joint lawsuit. If not, they must be divided into separate cases.
Grounds for dismissal – does the case have sufficient connection to Norway?
Cases concerning employment relationships must have sufficient connection to Norway to be brought before Norwegian courts.
Norway is bound by the Lugano convention of October 30th 2007 which has similar regulations as follows from the Brussel I-regulation, EF nr. 44/2001. In accordance with Section 19 of the Lugano Convention, an employer, domiciled in a state bound by the Lugano Convention, may be sued;
- in the courts of the state where he is domiciled; or
- in another state bound by the convention;
- in the courts for the place where the employee habitually carries out his work or in the courts for the last place where he did so; or
- if the employee does not or did not habitually carry out his work in any one country, in the courts for the place where the business which engaged the employee is or was situated.
Upon reception of a summons before Norwegian Courts, an employer must most often check that the company is either situated in Norway or that the employee habitually carries out his or her work in Norway. If that is not the case, then it might be advisable to look more thoroughly on whether the case can be dismissed, as Norwegian courts are not competent.
Choice of law – is Norwegian employment law applicable for the case?
If Norwegian courts are competent, then the applicable law is to be decided. Unlike what is the case concerning jurisdiction, choice of law is not regulated by law and must be decided on a case-to-case basis.
EU legislation, especially the Rome I and Rome II conventions, does provide guidance, although Norway is not formally bound by it. In lack of a more substantial regulation on what law to choose, the applicable law would most likely depend on which country the employment relationship has its closest connection. This is the so-called Irma-Mignon formula and was laid down in the Supreme Court decision RT. 1923 II s. 58. Relevant criteria would be place of work, wording and clauses of the employment contract etc.
Has the case been filed within the appropriate deadlines?
Certain acts must be filed within certain deadlines.
Legal proceedings in dismissal cases must for instance be filed by the employee within eight weeks after conclusion of negotiations or after dismissal, if such negotiations have not taken place. If the employee only seeks damages, and not his or her job back, the deadline is six months.
The outset for the case for acquittal – which party has the burden of proof?
If the lawsuit cannot be dismissed, the employer needs to prepare the groundwork for acquittal.
The general rule is that the plaintiff – here the employee – needs to substantiate the factual and legal basis for the claim.
Within many areas of employment law, though, the burden of proof is switched to the employer; e.g. for cases involving;
- dismissal or summary dismissal processes,
- legality of temporary employment or hiring of labour from temporary work agencies, independent contractors etc,
- cases concerning worker discrimination.
If the burden of proof lies on the employer, the employer is required to put in an effort to substantiate the case both on the factual and legal basis, as the employee gets the benefit of the doubt.
For certain claims the threshold for the burden of proof is raised, meaning the standard of persuasiveness is raised. This is for instance the case if the employer is accused of circumstances which might provide grounds for criminal prosecution.
Even though there is a free evaluation of evidence, written evidence in general carries more weight than oral evidence, such as witnesses. The room for uncertainty is also substantially lower for written evidence. The written evidence should thus form the basis and starting point for the preparation of a defence, with witnesses as important supplements.
Is it necessary to follow possible procedural rules or requirements to form?
Certain acts from the employer – such as dismissal processes and employment related issues – must be carried out in certain ways and be done in certain forms, oftentimes written forms, for the acts to be viewed as lawful.
If procedural rules have not been followed, its implications should be assessed. For instance, a dismissal which does not fulfil the requirements in the Working Environment Act section 15-4 would in most cases be viewed as invalid and the employer would be liable for damages. The same outcome is likely if a so-called consolidation meeting prior to the dismissal was not held.
In case of procedural errors, the implications of those must be analysed. The employer should thus evaluate the course of action, depending on, amongst other things, the likelihood of the act being viewed as invalid due to the error. The different courses of actions might be as follows:
- To maintain that the act is valid and take the necessary steps to substantiate that and preferably try to make them more robust.
- To withdraw the act in order to limit damages, possibly in combination with restarting the process and issuing a new act.
- Enter into negotiations for instance by demanding a so-called negotiation meeting as a reply to the lawsuit, see the Working Environment Act section 17-3 (4).
When it may be preferable to maintain that the act is valid
If it does not seem likely that the error may cause the act to be viewed as invalid, it would be advisable to maintain the act as valid and prepare the defence thereafter.
The alternative, withdrawal of the act, would make the employer liable to cover the costs accrued by the act, for instance legal costs and loss of salary.
In maintaining the act as valid the focus would often be that the error did not have any negative implications on the act and that the outcome would be the same and, in any case, legal. A classic example would be a dismissal without a proper consolidation meeting prior to dismissal, but where a possible dismissal in any case has been discussed with the employee, and this can be documented. Another example would be lack of information to worker representatives in accordance with regulation laid down in a collective agreement or legislation, for instance in cases of so-called mass redundancy.
When it may be preferable to withdraw the act
If it seems fairly evident that the act, due to the procedural error, will be viewed as unlawful, it might be advisable to revoke the act and restart the process. The desired outcome is to limit damages that the employer is exposed to.
This is especially applicable in cases where a dismissal does not fulfil the requirements to form.
Negotiations in cases brought before the court
For some acts such as dismissal cases and cases involving the lawfulness of temporary employment and / or hiring in from temporary work agency, the employer has the right to demand negotiations, see the Working Environment Act section 17-3 (4).
During the court process the court offers and often encourages so-called court-sponsored mediation. Many employment cases filed to the courts are often mediated and settled during the preparatory proceedings and hence do not make it into the court room.
Handling of the case in the preparatory period
When a lawsuit is filed the case enters a so-called preparatory period. The preparatory period usually ends two weeks before the court case takes place.
During the preparatory period each party can file new evidence, including witnesses; bring forth new lines of argument; bring in new claims, given that certain conditions are met etc.
During the preparatory period the employer must thus take the necessary steps to make the case as robust as possible. For this reason, coordination between the attorney and the client is vital.
For us attorneys it is essential that we are given all the relevant facts, even facts that might damage the case. Our job is to apply the relevant legal regulation on the relevant facts that constitute the case, and we are thus completely dependent on the facts presented to us by the client.
If the facts can be presented in an intuitive or systematic way, this would make the case handling more effective, thus reducing legal costs. One way of systematizing facts is through timelines and other overviews, for instance in Excel spreadsheets.
The oral proceedings
The oral proceedings are divided between the presentation of facts, including written facts and witnesses, and the legal argumentation.
The proceedings start with the plaintiff presenting the case and the relevant facts through a so-called opening statement. The defendant then supplements the plaintiff’s opening statement and goes through facts that the plaintiff has not already gone through or that the defendant needs to go through for some other viable reason.
Thereafter each litigant party gives their witness statements, before other witnesses give theirs. The counsel for each party has a right to cross-examine the opposing side’s witnesses and the court has the right to ask questions.
After the witness statements, the counsel from each party gives their closing speech which involves going through the relevant legal regulations and case law and applying it on the facts of the case.
Some time, usually within a month after the oral proceedings, the court issues a ruling which is forwarded to the counsel. The counsels must then forward the ruling to their clients.
The party that has lost the case, either fully or partially, has the right to appeal the decision. The appeal must be filed within one month after the counsel received the ruling, see the Civil Dispute Act section 29-5. The deadline of appeal may nevertheless differ for some decisions, though the deadline is usually made clear in the ruling.