Norway: New legislation on temporary layoffs

New regulations on temporary layoffs have been introduced by the Norwegian Government at the request of the social partners. The new legislation extends the maximum duration of temporary layoffs, aiming to avoid unnecessary direct layoffs in a time of rising unemployment.

The economic slow-down caused by the fall in crude oil prices and the subsequent wave of layoffs in the Norwegian petroleum sector has led to rising unemployment, a source of concern for both the social partners and the government. During the renegotiation of the trend-setting collective agreement for manufacturing industries, the involved social partners Fellesforbundet (affiliated with the Norwegian Confederation of Trade Unions, LO) and the Federation of Norwegian Industries (affiliated with The Confederation of Norwegian Enterprise, NHO), sent a joint letter to the Norwegian Prime Minister, Erna Solberg, asking for changes in regulations on temporary layoffs.

In a bid to counter rising unemployment, and to contribute to an agreement between the social partners in the initial and trend-setting bargaining round, the government adhered to the wish of the social partners and recommended new legislation. The bill, passed by the Norwegian Parliament in May, extends the maximum period for temporary layoffs from 30 weeks to 52 weeks. According to the new regulations, in force from 1 July, temporary laid-off employees will initially receive regular pay from the company for 10 days, then 30 weeks of unemployment benefit followed by 5 days of regular pay, and finally 19 weeks of unemployment benefit.

The Minister for Labour and Social Affairs, Anniken Hauglie, underlined that the government places importance on the tripartite cooperation and that it was key for the government to be able to facilitate an agreement between the social partners. This was achieved partly by the new legislation on temporary layoffs, and partly by taking the highly-contested issue of occupational pensions out of this year’s negotiations by offering to undertake a public inquiry on pensions, building on an agreement between Fellesforbundet and the Federation of Norwegian Industries.

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