Statutory right to reduced working time for workers aged 62 plus

In July 2008, all Norwegian employees were given a statutory right to reduced working hours from the age of 62 years. The intention behind the initiative is to make it easier for older workers to combine work with a pension. Furthermore, it aims to encourage more people to stay in employment after having reached the age of 62 years, which is the age limit for entitlement to an early retirement pension.

On 1 July 2008, new rules came into force securing workers a statutory right to reduced working hours from the age of 62 years. The new regulation has been incorporated into the Working Environment Act (Arbeidsmiljøloven). The right to reduced working time for older workers has previously only been applied in relation to time off for health reasons or social care responsibilities. The new rules provide workers aged 62 years and over with the right to demand a reduction in working hours without further justification. Workers are, however, not entitled to pay a compensation regarding their pension entitlements when working reduced hours.

The right to reduced working time pertains to job situations where it may be carried out ‘without causing significant disadvantage to the employer’. The fact that an employer may have to hire substitute workers or reorganise the work is not synonymous with the notion of ‘causing disadvantage’. In cases of disagreement over the right to reduced working hours – namely, whether or not the employer is faced with significant disadvantage – a joint social partner committee will consider the dispute.

The changes made to the work environment legislation must be seen in light of the introduction of more flexible pension provisions in the Norwegian National Insurance Scheme. From 2010, it will be possible for employees to retire on a full or partial pension when reaching the age of 62 years. The recent legislative changes aim to safeguard a real opportunity for older workers to combine work and retirement while maintaining their pension entitlements.

Position of social partners

The proposal (in Norwegian, 128Kb PDF) for such changes to the legislative framework was subject to a hearing among the relevant organisations and authorities before it was submitted to parliament (Stortinget) for further deliberation. The trade union confederations supported the proposal, whereas the employers criticised the proposal for a statutory right to reduced working hours. The employers argued that such a right must be based on an agreement between the employer and the individual employee; in other words, the employer may have greater scope to reject such a demand or at least make the right to reduced working hours subject to the condition that the employee takes up a different role or function within the company. However, the political majority in parliament did not take the employers’ reservations into account.

Commentary

Although the amendments made to the work environment legislation allow for a reduction in working time for older employees, the changes also aim to enable these employees to remain in employment even if they do not want to work full time. This is in line with the new National Insurance Scheme, as well as the revised early retirement scheme AFP (Avtalefestet pensjon), both of which contain strong financial incentives to remain in employment – including part-time work – beyond the age of 62 years (NO0611019I, NO0804039I).

Further arrangements exist in Norwegian working life to encourage continued employment among older employees. For example, employees aged 60 years and over have been entitled to an extra holiday week. In some agreement areas – namely, in the public sector at state level – it is possible to offer more days off with pay to encourage older employees to stay longer in employment. At municipal level, some employers offer bonuses to older employees who chose to continue working rather than to retire. Measures to encourage older employees to stay in employment are also part of the joint social partner agreement, notably the agreement for an inclusive working life, the IA-agreement (NO0601101N). Finally, many companies have also incorporated old-age policy measures as part of their personnel policy.

Kristine Nergaard, Fafo Institute for Applied Social Science