Illegal termination of employment? Advice to employees in cases of unfair dismissal or redundancy

This article gives some general advice to employees in case of dismissal with notice, redundancy, or summary dismissal. It provides general info about the legal framework, namely the Norwegian Working Environment Act, that applies in case of termination of employment relationship. The article furthermore gives some general tips as to how an employee may secure his or her interests in the situation that arises. We would nevertheless like to emphasize that this article does not contain legal advice regarding your case specifically, as such advice would presuppose you engaging our services. If you require legal assistance, please do not hesitate to contact us or myself, either by phone, e-mail, or the chat function on this page.

1. The employer’s decision to terminate employment

Even though it is self-evident, an employer’s decision to fire an employee is a unilateral decision reached by the employer. This means that the decision is unilaterally made by the employer;

1. based on assessments and conclusions the employer has reached; and
2. based on particular facts that the employer has decided constitutes the basis of the decision.

When terminations or dismissals are considered invalid or illegal, it is usually because at least one of these three criteria is met:

1. Facts that constitute the basis of the decision are considered wrong or are considered not sufficiently proven.
2. The employer’s legal assessment or reasoning, based on the proven facts, is erroneous, for instance that the threshold for dismissal is higher than what the employer has taken account for.
3. The employer has committed so-called procedural errors in the termination or dismissal process.

From the employee’s side, the initial analysis as to whether the termination or dismissal is valid or invalid, should thus consist in desecrating what the employer’s decision is about. Which facts constitute the basis, what is the employer’s reasoning and how has the employer come about reaching that decision. The employee should also seek to uncover whether procedural errors have been made, as they may prove significant for the validity of the termination or dismissal

2. The effect of the termination of employment being viewed invalid or illegal

As a main rule, an invalid termination of employment is viewed as not having any effect. This means that the employment relationship does not end, but continues. If the employee has had to leave his or her position while the case is in progress, the employer has a right to be reinstated in his or her position if the court has concluded that the decision is invalid.

Furthermore, the employer is liable to compensation for economic and non-economic loss caused by the termination.

The employee may choose to only seek damages, and not for the decision to be ruled invalid. This is especially practical if the employee has found new employment or for other reasons just wants to be compensated.

Compensation is set to a fixed amount that the court finds reasonable, considering the financial loss of the employee and other circumstances relating to the employee, the employer, and the case at hand. The biggest element would be loss of salary. The court has found that employers, in cases of unlawful termination of employment, have had to compensate employees with up to two years of future wage loss. The court’s assessment of future wage loss depends on, among other things, how likely the court finds it to be that the employee will find new employment within the foreseeable future.

3. Some tips to employees about how to proceed

3.1. The right to written information on the grounds for termination of employment

To clarify the circumstances claimed as grounds for dismissal, it is often advisable for the employee to demand a written justification from the employer. The employee is entitled to such written justification, see section 15-4 (3) of the Working Environment Act. The written justification must, among other things, specify the circumstances invoked as the basis for the termination of employment.

This written reasoning helps clarify the basis for the dismissal and might uncover possible errors that the employer may have committed. It is also necessary for the employee to have clarity about which grounds constitute the basis for the dismissal. The various reasons are briefly listed below.

3.2. The different grounds for dismissal

According to section 15-7 of the Working Environment Act, dismissal with notice requires justifiable cause. Furthermore, summary dismissal requires gross breach of duty or other serious breach of the contract of employment, see section 15-14.

The threshold for dismissal is high, meaning the employer must prove there are valid reasons for terminating the employment. For summary dismissal, the threshold is substantially higher.

Dismissal with notice may relate to circumstances relating to the employee or to the employer, with the latter often being described as a redundancy process. A summary dismissal can only relate to circumstances relating to the employee, as it presupposes serious breach of contract on his / her part.

In case of a redundancy process, the employer must prove the following:

• That the employer’s decision to downsize is justifiable
• That the selection of employees for redundancy is justifiable
• That there is no other work to offer the employee being made redundant.

A more detailed guide is provided in sections 18.1 – 18.5 in my guide to Norwegian employment law.

In case of dismissal or summary dismissal due to circumstances relating to the employee, the reasons may be listed as follows (a more detailed guide is provided in sections 19 and 20 in my guide to Norwegian employment law):

1. Unsatisfactory or poor work performance
2. Negligence of orders or other cases of disobedience
3. Disloyalty
4. Harassment, including sexual harassment, and uncooperativeness etc.
5. Financial fraud or financial misconduct
6. Improper behaviour irreconcilable with position or employment relationship
7. Alcohol or drug influence during working hours

A more detailed guide is provided in section 19.2 in my guide to Norwegian employment law.

If legal assistance has not already been obtained, it might be advisable to seek legal assistance at this stage. The reason being that the specifics of the case must be considered against the invoked reasons for dismissal or summary dismissal. This is a legal analysis which involves assessments as to which facts may be proved and which may not, and which implication the proven facts have on the claimed grounds for dismissal. This application of law on the case at hand, is what we lawyers are experienced in doing.

The probability on negotiating a severance package or agreement would also hinge on risk assessment as to whether the dismissal will be viewed as invalid and unlawful. The starting point of negotiation would thus often be analysing how legally robust the dismissal is. An employer would therefore often be more willing to negotiate alternatives if it is clearly pointed out that there is a risk the dismissal will be viewed as invalid.

3.3. Some specifics with regards to procedural errors in the dismissal process

If the employer has committed procedural errors, the termination could often be viewed as invalid, and indemnify itself due to these errors. Therefore, it might be advisable for the employee to look specifically to see whether such errors have been committed, as such errors might make it less complicated to have a court set the decision aside.

There are some errors that are viewed as serious: If a so-called consolidation meeting, pursuant to section 15-1 of the Working Environment Act, has not been held, the termination of employment is likely to be viewed as unlawful. Furthermore, if the letter of dismissal does not fulfil the requirements to form, as laid out in the Working Environment Act section 15-4, the termination is viewed as invalid and indemnifying, unless special circumstances make this clearly unreasonable, see section 15-5.

It might also be that the facts of the case have not been sufficiently mapped out by the employer before dismissal was decided upon. If so, the process would be viewed as incomplete and the termination decision premature. This would also constitute a procedural error.

4. The employee’s right to demand negotiations

A dismissed employee can demand negotiations with the employer pursuant to section 17-3 (2) of the Working Environment Act. The claim for negotiations must be put forth in writing within two weeks, counting from the date of the dismissal. Though the deadline for negotiations is two weeks, the employer tends to comply with a demand for negotiations put forth after that.

The claim for negotiations may be put forth by email. When the claim has been put forth, the employer has an obligation to make sure proper negotiations are held. The negotiations involve the grounds for dismissal, including why it may or may not be legal. Such negotiations also often involve alternatives like redundancy or compensation packages for the employee.

4.1. Negotiations on severance agreements

During a dismissal process, including in negotiations meetings, the parties may enter into discussions on severance agreements as an alternative to dismissal. Such agreements may also be discussed prior to dismissal, for instance as part of a consolidation meeting.

A severance agreement often involves financial compensation to the employee in return for the employee agreeing to terminate the employment relationship voluntarily. The sums agreed upon depend on the specifics of the case and may vary a lot. Relevant circumstances would be how probable it is for the employee to find new employment, the length of the employment relationship and other circumstances relating to the case.

Occasionally, other considerations such as the relationship between employer and employee, industry standards or business practices for such severance agreements, may be governing for the amount agreed upon.

A severance agreement also includes other provisions such as length of obligation to work, holiday pay, confidentiality, leaving certificate, final settlement between the parties etc. Sometimes non-compete clauses are also included.

5. The time after concluded negotiations – should I file a lawsuit against my employer?

If an agreement has not been reached, the employee will have to decide whether the dismissal is to be disputed through a lawsuit. There are deadlines for lawsuits, which are laid out in the Working Environment Act, and which the employee should be informed of, as part of the letter of dismissal, see the Working Environment Act section 15-4.

If a lawsuit is not filed within the relevant deadlines, the dismissal will be viewed as valid and lawful. Whether or not a lawsuit is to be filed, can be a difficult decision. It requires full analysis which would presuppose legal assistance, and the employer should obtain legal services, if for some reason that has not yet been obtained at this point.

If the employee decides to file a lawsuit, the employee has a right to remain in his or her position until the case comes up before court, see the Working Environment Act sections 15-11 and 17-4. This means that the employee has a right to work and receive salary until the dismissal case is decided by the court. There are exceptions to the right to right to remain in position, and the employer may in some cases demand that the employee leaves his or her position until the matter is settled.

6. Court initiated negotiations

Even after legal proceedings are filed, many employment disputes are still resolved amicably between the parties. One of the main reasons for this is court-initiated negotiations. Such negotiations are voluntary for the parties, though most employers and employees agree to such negotiations.

In court-initiated negotiations, a judge will look at the case and try to mediate between the parties so that they reach an agreement. The negotiations take place in the court and the court usually sets aside a day for negotiations.

Our experience is that these negotiations are well functioning and that they contribute to the fact that many employment disputes are settled before they come to trial.