Businesses are not immune to shifting markets and economic downturns. When order volumes decline, or future contracts become uncertain, temporary layoffs—known as permittering in Norwegian—may be necessary to reduce costs without resorting to permanent layoffs. However, navigating the rules of temporary layoffs can be complex. As an employer, it’s important to understand your obligations and ensure the process is handled legally and fairly.
What Is a temporary layoff?
A temporary layoff means that an employee is relieved from their work duties for a limited period due to a lack of work, while remaining formally employed. During this period, the employee does not work but is expected to return once conditions improve. Employers must have a valid reason to implement a layoff.
What qualifies as a valid reason for layoff?
A valid reason for temporary layoffs must relate to temporary challenges within the business—not to the employee personally. Common examples include:
- A drop in orders or sales
- Market downturn
- Practical obstacles preventing work (e.g., equipment failure)
- Loss of contracts or bids
- Natural disasters or accidents
Layoffs should not be used if the situation is likely to be permanent—in such cases, regular termination procedures must be followed.
Also read: Rules for temporary layoffs - What employers must know
What happens if you don't follow layoff rules?
Improper layoffs—those done without a valid reason or without following the correct process—can be deemed invalid. This means the employee may still be entitled to full salary and work as usual.
What are layoff rules based on?
Norwegian layoff rules are largely based on agreements between employer and employee organizations, not legislation. The main guidelines can be found in collective agreements, particularly the Basic Agreement between LO (Norwegian Confederation of Trade Unions) and NHO (Confederation of Norwegian Enterprise).
Even in non-unionized companies, employers are encouraged to follow similar principles.
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Here are the essential steps in a Norwegian layoff process
1. Discuss with employee representatives
Although not legally required in all cases, collective agreements may mandate discussions with union representatives before any temporary layoffs. Even in the absence of union ties, it's good practice to consult with safety representatives or staff as a courtesy and to maintain transparency.
2. Select which employees who will we laid off
Seniority is typically the main selection criterion, but employers may use other objective and fair criteria if they can justify them.
3. Provide a written layoff notice
The employee must receive a written notice at least 14 days before the temporary layoff begins, unless special exceptions apply (see below). The notice must include:
- Date of issuance
- Reason for the layoff
- Start date
- Expected duration
- Degree of layoff (full or part-time)
- The days on which the employer is legally obligated to pay wages
4. Beginning of the layoff
The temporary layoff begins 14 days after the notice is issued, unless special exceptions apply (see below). During the layoff, the employee is not expected to work but is still employed and must return once recalled. Layoffs can last up to 26 weeks within an 18-month period.
5. Notify authorities
Employers must report temporary layoffs to Altinn and NAV, stating the duration, scope, and percentage of layoff for each employee.
6. Who pays wages during the layoff?
The employer is obligated to pay wages for the first 15 working days of the temporary layoff. If the layoff is partial (e.g., 50%), this wage obligation period is 30 days. After this, the employee may apply for unemployment benefits (“dagpenger”) through NAV, provided their working hours are reduced by at least 50%.
7. When the layoff ends
Once the temporary layoff period ends, employees are required to return to work. If the duration was not specified, employees must typically be ready to resume work within 1–2 days after notice from the employer.
Exceptions to the standard layoff rules
Shorter notice periods
- Force majeure or natural disasters: 2-day notice
- Strike or lockout: No notice period required
What about layoffs during public holidays
If the temporary layoff is shorter than six weeks, no unemployment benefits are paid during the Easter or Christmas holidays (Palm Sunday to Easter Monday, and December 20 to January 1).
Summary of layoff rules in Norway
Temporary layoffs are never easy—for either party. But when done correctly, they can help businesses weather financial challenges without losing valued employees.
Understanding your responsibilities as an employer is essential to ensure compliance, fairness, and support for your workforce. If you're facing a potential layoff situation and need guidance, professional legal assistance can help ensure that the process is handled properly from start to finish.
Need help with a temporary layoff process?
Our labor law lawyers can assist you in evaluating whether valid grounds exist, selecting which employees to lay off, and ensuring all notifications and formalities meet legal requirements. If you are considering temporary layoffs, contact us for a no-obligation consultation to discuss your situation.
DO YOU NEED HELP WITH THE LAYOFF PROCESS?
Our labor law experts are here to assist. Contact us today!
