Developments in Employment Law in the First Half of 2026

Employment protection for managing directors

HR-2026-221-A

In January, we reported that the Supreme Court was to hear a case concerning the limits of an employer’s managerial prerogative, where a senior executive had waived employment protection in exchange for severance pay. The Supreme Court has now issued its judgment, clarifying the scope of judicial review in such cases.

The Supreme Court concluded that the courts may review whether requiring a senior executive to depart under a severance pay agreement constitutes an abuse of managerial prerogative - for example, whether the decision is arbitrary or based on extraneous considerations. Where the employer has stated reasons for the departure, the courts may also examine whether the decision rests on materially incorrect facts. The threshold for overturning such a decision remains high, however. The Court further noted that the executive should be notified if the employer is considering invoking the agreement, but emphasised that this is a procedural requirement with no bearing on the employer’s right to enforce it.

Key takeaways: While employers enjoy broad managerial prerogative in these matters, departure decisions remain subject to judicial review. Employers should ensure that such decisions follow a proper process and are based on accurate facts. The senior executive should also be given advance notice.

Summary dismissal

LG-2025-150279

An employee signed a letter of resignation during a meeting with the employer following allegations of theft. The Gulating Court of Appeal held that the resignation was invalid and, in effect, constituted an unlawful summary dismissal. The court emphasised that the meeting took place without prior notice, the letter of resignation had been drafted by the employer in advance, the allegations were not supported by sufficient evidence, the employee was not given an opportunity to reflect or seek assistance, and the employer failed to ensure proper documentation of the proceedings, such as minutes.

Key takeaways: This judgment illustrates that a resignation may be deemed invalid if the employer pressures the employee. It highlights the importance of ensuring a fair and well-documented process.

LH-2024-29704-1

An operations manager at a bus company was summarily dismissed on the grounds that he had prioritised his own and his relatives’ financial interests over those of the employer. The alleged misconduct included the unauthorised use of the company’s fuel card and telephone subscription while on holiday, employing his daughter as a temporary assistant to clean buses, and a failure to make a customs declaration, which together resulted in additional costs for the employer of up to NOK 87,278. The Court of Appeal declared the summary dismissal invalid, both because the employer’s handling of the case was clearly unreasonable and because none of the alleged conduct constituted a serious breach of duty. The court found that the employer had deliberately and systematically sought to remove the employee, and that the process was solely intended to identify grounds that could be used against him. The court concluded that the summary dismissal could not be upheld as an ordinary dismissal, and the employee was awarded reinstatement as well as NOK 2,560,000 in compensation for lost earnings and NOK 150,000 in compensation for non-economic loss.

Key takeaways: A summary dismissal may be declared invalid if the employer’s handling of the case is unreasonable or tainted by bias, even where the employee has engaged in misconduct. Employers who deliberately seek to push out an employee risk having a summary dismissal set aside, regardless of whether the employee’s conduct was blameworthy.

LH-2025-142017

In January, we reported on the Supreme Court decision HR-2025-1687-A, which clarified that an employer has no duty to offer reassignment before effecting a summary dismissal. The case has now been reheard by the Court of Appeal, which unanimously concluded that the summary dismissal was lawful.

The case concerned a nurse who was summarily dismissed after striking an disabled patient during an episode of agitation. The Supreme Court overturned the previous Court of Appeal judgment, which had invalidated the summary dismissal on the grounds that the employer had failed to offer reassignment, and held that there is no duty to offer reassignment in summary dismissal cases. In a subsequent rehearing before the Court of Appeal, the summary dismissal was unanimously deemed lawful - the blow constituted a gross breach of duty, and considerations of patient protection and the heightened duty of care incumbent on healthcare staff made the summary dismissal proportionate.

Key takeaways: The Court of Appeal confirms that isolated incidents, such as a single act of violence, can justify summary dismissal without any obligation to consider reassignment. Repeated misconduct or prior warnings are not required if the act is sufficiently serious. The judgment emphasises that particularly stringent standards apply to staff providing care for people with disabilities and other vulnerable groups.

Departure from position and the right to remain in position during the notice period

25-191928ASK-BOrg/04

A head of department at a shipbroking firm was dismissed after sharing an inappropriate image through an internal WhatsApp group, which subsequently spread within the shipping community. The employer deemed it unreasonable for the employment relationship to continue while the case was pending and demanded that the employee vacate the position.

The Court of Appeal, like the District Court, found that there were no grounds for ordering the employee’s removal from the position, and that the employee was entitled to remain in the role during the notice period. The adverse effects of the employee remaining in the position, including on the working environment, were not sufficiently documented, and the outcome of the dismissal proceedings remained uncertain.

It has since been reported in the media that the underlying dispute regarding the validity of the dismissal was resolved through an out-of-court settlement.

Key takeaways: The general rule is that an employee has the right to remain in position during the notice period. The employer must document specific adverse effects to succeed with a demand for the employee’s removal from the position, even in cases where the employee’s conduct is reprehensible.

Non-competition clauses for shareholders who are employees

LA-2026-7531

The case concerned an application for an interim injunction to enforce a non-competition clause in a shareholders’ agreement. A minority shareholder, who was also employed by a subsidiary, took up a position with a competitor in breach of the non-competition clause in the shareholders’ agreement. The question was whether the non-competition clause was, in reality, a restriction directed at the minority shareholder in their capacity as an employee, and thus in breach of statutory rules limiting non-competition clauses for employees.

The Court of Appeal granted the application for an interim injunction. It concluded that the connection to the share purchase and the minority shareholder’s role as a reinvesting shareholder meant that the mandatory provisions of the Working Environment Act regarding non-competition agreements in employment relationships did not apply. The court considered that there could be entirely legitimate reasons for the agreement to have been entered into with the parent company, given that the shareholders are situated at this level in the corporate structure. However, the court acknowledged that this arrangement could provide an opportunity to circumvent the employee protection provisions of the Working Environment Act.

Key takeaways: This case differs somewhat from other similar cases in recent years, and in our view, it is uncertain whether the Court of Appeal’s assessment reflects current law. The decision illustrates that the courts conduct a case-specific assessment of whether a non-competition clause has a sufficient factual connection to the employment relationship for Chapter 14A of the Working Environment Act to apply, or whether the clause is in reality rooted in the shareholder relationship and is therefore governed by general freedom of contract.

TOSL-2026-33148

DNB did not succeed in its application for an preliminary injunction against a former key employee at Carnegie who had signed non-compete clauses both in a transaction declaration (as an indirect shareholder) and in the employment contract. The court held that the transaction declaration was in fact an employment contract subject to Chapter 14A of the Working Environment Act, because the employee’s competition-relevant knowledge stemmed from the employment relationship - not from a marginal shareholding. The employee was therefore bound by the non-competition clause for one year - not two years as stated in the transaction declaration. The one-year period was calculated from the date the employee was excluded from the workplace, not from the expiry of the formal notice period, as the court found that the employment relationship effectively ceased upon the barring.

The decision has been appealed to the Court of Appeal and is therefore not yet binding.

Key takeaways: Non-competition clauses in transaction documents may be subject to the mandatory provisions of the Working Environment Act if the clause has a sufficient connection to the employment relationship. The ruling illustrates the courts’ clear emphasis on labour market mobility.

Employers who exclude employees during the notice period risk the employment relationship being deemed to have effectively terminated at the time of exclusion. This means that the binding period for non-competition restrictions begins to run from the date of exclusion.

Personal liability for damages under the Limited Liability Companies Act in employment relationships

The courts are dealing with an increasing number of cases in which employees and shareholders bring claims for damages directly against the company’s officers, typically the managing director or board members, instead of, or in addition to, the company itself. Three recent decisions illustrate this trend and the legal challenges it raises.

In LG-2025-102682, a shareholder dispute between two equal owners (50/50), the Court of Appeal ruled largely in favour of the chairperson. On one point, however, the court found negligence: the chairperson had taken a decision to dismiss the managing director in breach of both the Limited Liability Companies Act and the Working Environment Act. Liability for damages was nevertheless not imposed, as the dismissal was never carried out and therefore no financial loss occurred. In TOSLO-2025-96498, the District Court found that the managing director/chairman had intentionally caused the employee loss through wrongful termination and was held jointly and severally liable with the company for the financial loss (lost sick pay and holiday pay). The compensation for non-economic loss of NOK 100,000, however, was imposed solely on the company. In our view, this distinction is correct, as Section 17-1 of the Limited Liability Companies Act does not provide for compensation for non-financial loss. In TOSLO-2025-7383, the District Court found that the conditions for personal liability under Section 17-1 were met in respect of unpaid wages and sick pay, but did not uphold the claims for compensation for lost earnings or non-economic loss.

TOSLO-2025-7383 deserves particular attention regarding the distinction between the company’s liability and the director’s personal liability. In the judgment, Oslo District Court states that “the defendant must be identified with the employer”. The defendant was, admittedly, the sole owner, chair of the board, and managing director, and thus exercised actual control over the employer’s functions. However, the statement illustrates a tendency in lower court practice to draw an insufficiently clear distinction between the employer company as a legal entity and the individual representative as an independent tortfeasor. The company’s officers do not normally bear personal employer liability; it is the company that is the employer. When the district court equates the officer with the employer, there is a risk that the question of whether the individual has acted negligently in a manner giving rise to liability for damages will be conflated with the question of whether the company, as employer, has acted unlawfully. In our view, this conflation of liable parties is problematic and may result in a lower standard of care being applied in practice than that prescribed by Section 17-1.

Key takeaways: Managing directors and board members may be held personally liable for damages under Section 17-1 of the Companies Act in the event of wrongful termination of employment. However, the courts must keep the assessment of the individual’s negligence separate from the assessment of the employer company’s liability - a distinction that is not always observed in lower court practice. Companies should ensure that persons handling dismissal and termination processes have sufficient competence to carry these out in accordance with the law and, where necessary, should engage external assistance. It should also be considered whether the company has directors’ and officers’ liability insurance covering the potential liability of officers towards third parties, including employees.

Overtime pay for part-time employees

TSOS-2025-121698 (Coop øst) and thoo-2025-182601 (innlandet hospital)

In two cases, the District Court has considered whether a part-time employee is entitled to overtime pay for work exceeding the agreed percentage of full-time employment but within the framework of normal working hours (additional work). In both cases, the District Court concluded that the Norwegian model, with a common threshold for overtime pay for full-time and part-time employees, constitutes unlawful discrimination against part-time employees. Both decisions are based on the prohibition against discrimination in Section 13-1(3) of the Working Environment Act and the EU Part-Time Work Directive 97/81/EC, which requires Member States to implement a prohibition against treating part-time employees less favourably than comparable full-time employees solely because they work part-time. In practice, the judgments mean that the threshold for overtime pay must be adjusted proportionally for part-time employees, in accordance with the principle of proportionality set out in the Directive. Both judgments were delivered with a dissenting opinion (2–1).

In both cases, the District Court rejected the argument that the desire to foster a full-time culture constituted sufficient objective justification for the differential treatment. The distinction between voluntary and mandatory overtime was not given decisive weight. Furthermore, the court concluded in both cases that claims for back pay are not limited in time to the period following the Court of Justice of the European Union’s (CJEU) Dialysis ruling (delivered on 29 July 2024), but are subject only to the general three-year limitation period under the Limitation Act.

Both district court judgments have been appealed and are therefore not final. The legal position must consequently be regarded as unresolved. The Government has established a tripartite working group comprising representatives from employer and employee organisations to assess the consequences of the Court of Justice of the European Union’s rulings in C-660/20 (Lufthansa) and the joined cases C-184/22 and C-185/22 (Dialysis). However, the working group’s deliberations have been characterised by entrenched positions. The group is now to proceed on the basis that the Norwegian rules on compensation for overtime must be amended, and to propose regulatory changes that prevent discrimination between part-time and full-time employees regarding payment for overtime and additional work. The proposals are to be submitted by 1 September 2026. Early indications suggest that the group will not reach agreement on proposals for new rules.

Key takeaways: Employers who make extensive use of part-time staff and overtime should already be reviewing their practices regarding overtime pay and assessing the financial exposure in the event of a change in the law. If the current legal position is confirmed by higher courts or the legislature, this could trigger extensive back-pay claims and necessitate changes to collective agreements, pay systems, and employment contracts.

Calculation of average working hours

LF-2025-203370

Frostating Court of Appeal upheld an employee’s claim for wages following the termination of employment with a staffing agency. The case concerned a carpenter employed in an 80% position at a staffing agency who had worked more than the agreed percentage of the position during an assignment period and had subsequently not been given any new assignments. The wage claim related to the period during which he was without assignments.

A key issue in the case was whether a valid agreement had been entered into regarding the averaging of working hours, cf. Section 10-5 (1) of the Working Environment Act. The point of dispute was whether the working hours were “arranged” within the meaning of Section 10-5 (1). The employee’s employment contract specified that work could be carried out periodically, and that working hours, breaks, and time off were to be set out in the individual assignment confirmations. The Court of Appeal held that the employment contract’s reference to the assignment confirmations was not sufficient to satisfy the arrangement requirement. There must be a plan that enables the employee to determine when weeks with longer and shorter working hours fall within the calculation period. Without a valid arrangement, the employee was entitled to 80% of his salary during the period in which he had no assignments.

Key takeaways: The requirement for a working time arrangement must be read in conjunction with the employment contract requirement for a plan setting out working and rest periods. The judgment concerns a specific and particular set of facts, but the legal reasoning on whether the working hours were “arranged” is formulated in general terms. It is therefore unclear what significance the judgment has for more general situations relating to the calculation of averages and any requirement for a plan ensuring that employees know in advance when they will be working long or short hours.

A key issue in the case was whether a valid agreement had been entered into regarding the averaging of working hours, cf. Section 10-5(1) of the Working Environment Act. The point of dispute was whether the working hours were "arranged" in accordance with Section 10-5(1) of the Working Environment Act. The employee’s employment contract specified that the work could be carried out periodically, and that working hours, breaks and time off were to be set out in the individual assignment confirmations. The Court of Appeal concluded that the employment contract’s reference to the assignment confirmations was not sufficient to satisfy the requirement for an arrangement. There must be a plan that enables the employee to calculate when weeks with longer and shorter working hours fall within the calculation period. Without a valid arrangement, the employee was entitled to 80% of his salary during the period in which he had no assignments.

Key takeaways: The requirement for a working time arrangement must be viewed in conjunction with the requirement in the employment contract for a plan for working and rest periods. The judgment concerns a specific and particular set of facts, but the legal reasoning regarding the question of whether the working hours were "arranged" is formulated in general terms. It is therefore unclear what significance the judgment has for more general situations relating to the calculation of averages and any requirement for a plan ensuring that such employees know in advance when they will be working long or short hours.

Temporary employment for project-based assignments

LB-2025-10326

The case concerned a post-production supervisor who had been continuously employed on a temporary basis for almost three years on various projects within a company, and who claimed entitlement to permanent employment. The majority of the Court of Appeal concluded that the employment was lawful under Section 14-9 (2) letter a of the Working Environment Act, as the work was linked to specific, time-limited projects and there were no employment opportunities available upon expiry of the last contract. The minority dissented, pointing to the lengthy period of employment and the employer’s failure to consider alternatives such as part-time work, time off in lieu, or averaged working hours.

Key takeaways: Project-based work may provide grounds for temporary employment even in the case of longer continuous engagements, but the duration of the employment relationship heightens the requirements for the employer’s justification and assessment of alternative solutions.

Broadened definition of occupational accidents and clarification of the burden of proof

In Prop. 93 L (2025-2026), the Ministry of Labour and Inclusion proposes amendments to the occupational injury provisions of the National Insurance Act. The core proposal is to broaden the definition of an occupational accident by removing the requirements that the incident must be “unexpected” and that the strain must be “unusual” compared with what is normal in the work. The assessment is instead to be linked to a greater extent to the risk associated with the work or the workplace.

The proposal could extend occupational injury cover to more workers, including where the injury occurs during realistic training or during ordinary work involving particular risks. The bill also clarifies the reversed burden of proof in cases involving occupational diseases.

Status: The bill was presented on 7 May 2026 and is currently being considered by the Labour and Social Affairs Committee of the Norwegian Parliament. A hearing is scheduled for 21 May, and the committee’s deadline to submit its recommendation is 5 June. The provisional date for the first reading in the Norwegian Parliament is 12 June 2026. Based on previous decisions by the Norwegian Parliament, we expect the proposal to receive majority support.

Report on the regulatory framework for independent consultants and advisers

A multi-stakeholder working group, appointed by the Ministry of Labour and Inclusion, submitted a report on forms of engagement for independent consultants and advisers on 27 March 2026. The working group as a whole recommended that the Ministry draw up guidelines specifying when there may be grounds for entering into independent assignments in the consultancy and advisory sector. Some members of the working group also recommended a narrow special rule permitting the hiring of independent consultants with their own limited companies and specialist expertise for clearly defined projects.

The application of the Temporary Agency Work Directive to the Norwegian continental shelf

Case e-6/25 - the saga subsea case

On 13 April 2026, it was decided that the Saga Subsea case would be heard by the Grand Chamber of the Supreme Court. The central question is whether the EU Temporary Agency Work Directive (2008/104/EC) applies to temporary employment agencies on the Norwegian continental shelf, and whether temporary workers there are entitled to equal treatment with the user undertaking’s own employees. In an advisory opinion in February 2026, the EFTA Court held that the EEA Agreement applies to the continental shelf. This conflicts with the position Norway has maintained for many years. The State has indicated that it will argue that the Supreme Court should depart from the EFTA Court’s interpretation.

Key takeaways: The case could determine the scope of EEA law on the Norwegian continental shelf, with potential consequences extending far beyond the field of labour law. If the Supreme Court follows the EFTA Court’s approach, this could open the door to extensive back-pay claims for hired offshore workers. Employers and staffing agencies operating on the continental shelf should therefore follow developments closely.

Read more about the case on our website.

Status of the EU Pay Transparency Directive

In January, we discussed the EU Pay Transparency Directive, which the EU adopted in 2023 and which is considered EEA-relevant. Since January, no proposals for Norwegian implementation have been put forward, but the deadline for EU Member States is approaching. EU Member States have until 7 June 2026 to transpose the EU Pay Transparency Directive (Directive (EU) 2023/970) into national law.

The EU Pay Transparency Directive aims to enhance transparency regarding pay and contribute to equal pay for work of equal value between the sexes. As of May 2026, the Directive has not been incorporated into the EEA Agreement, and consequently no implementation deadline has been set for Norway. The Ministry of Culture and Equality is nevertheless preparing for its implementation into Norwegian law, but neither a consultation paper nor a draft bill has been presented. The Directive includes, among other things, a requirement to disclose pay in job advertisements, a prohibition on asking about previous pay, and a reporting obligation regarding pay gaps in larger organisations. Although the Directive has not yet been implemented, Norwegian employers already have obligations under Section 26 of the Equality and Anti-Discrimination Act (the duty to take action and report), which partly overlap with the Directive’s requirements.

Forms of engagement and classification of platform workers

LB-2025-94406 - The wolt case

Borgarting Court of Appeal held, by a majority of 4 to 1, that three delivery couriers at Wolt Norway AS, represented by Thommessen, were not employees within the meaning of Section 1-8 of the Working Environment Act. The majority placed decisive weight on the couriers’ actual autonomy, including the fact that they were free to log on whenever and however often they wished, could decline job offers without consequences, provided their own equipment, and were responsible for their own earnings. Although Wolt exercised a degree of control through the app and algorithms, this was no more intrusive than is normal in a contractual relationship. Particular emphasis was placed on the fact that the allocation algorithm did not take into account the couriers’ performance or subjective assessments. On this basis, the majority concluded that the couriers’ actual freedom and independence meant that there was no such imbalance of power as to require the protection afforded by classification as employees. The conclusion was therefore that they had been correctly classified as independent contractors.

Fellesforbundet appealed the judgment to the Supreme Court. On 12 May 2026, the Supreme Court’s Appeals Committee decided to allow the appeal on the application of law relating to the classification issue under the Working Environment Act and the Holidays Act. The case is therefore not yet finally decided.

Key takeaways: The judgment provides important guidance on the distinction between employees and independent contractors in platform work. The judgment emphasises that, when assessing employee status, it is particularly important how much freedom the worker has in relation to the client’s management and control. If the contractor has genuine freedom to decide when to work, which assignments to accept, and can refuse without negative consequences, this strongly suggests a contractual relationship, even where there is some degree of algorithmic control and limited scope for negotiation. The Supreme Court’s consideration of this case could set a precedent for the classification of platform workers in Norway.

Case concerning “a position of particular independence”

LG-2025-4886

In September 2026, the Supreme Court will, for the first time, consider the meaning of the phrase “particularly independent position” under Section 10-12 (2) of the Working Environment Act. The case concerns a project manager at a construction company who claimed overtime pay after the company went bankrupt, directing the claim for compensation personally against the chair of the board and the managing director. The employment contract stipulated that overtime was included in the salary but did not expressly classify the position as “particularly independent”. Gulating Court of Appeal concluded that the project manager held a particularly independent position and was therefore not entitled to overtime pay. The court emphasised that he managed large construction projects with considerable autonomy, controlled his own working hours, and prioritised tasks without interference from management.

Key takeaways: The Supreme Court’s decision will provide a principled clarification of the scope of the exemption for “particularly independent positions”, a provision of significant practical importance for a considerable number of employees. The outcome could have direct consequences for the classification of a range of job types and for the drafting of employment contracts more generally. A strict interpretation could narrow the scope of the exemption and open the door to back-pay claims from employees who believe they have been misclassified, as well as increase wage costs for employers.

Public holiday during the extra holiday week for employees over 60

LG-2025-64156

The Appeals Committee of the Supreme Court has decided that the appeal by Time Municipality and the Norwegian Association of Local and Regional Authorities (Nw: Kommunens sentralforbund (KS)) against the judgment of Gulating Court of Appeal of 5 February 2026 (LG-2025-64156) shall be heard by the Supreme Court. The case concerned the provisions of the Holidays Act regarding additional holiday for employees over the age of 60, in which a shift-working nurse demanded to take her additional holiday during a week that included the Second Day of Christmas. The employer refused and required her to report for work. Both the District Court and the Court of Appeal ruled in favour of the employee and held that the working day principle applies equally to all leave: when additional leave is taken as a continuous period, it is extended to include public holidays falling within that period.

Key takeaways: The Supreme Court’s consideration of this case will provide a principled clarification of the scope of the working day principle for additional holiday entitlement. The outcome will have significant practical implications for employers with shift patterns, where taking additional holiday around public holidays can create staffing challenges.

Basic amount changed from 1 May 2026

The basic amount in the National Insurance Scheme is NOK 136,549 as of 1 May 2026. The basic amount is used to calculate and adjust various social security benefits, such as pension contributions, work assessment allowance, disability benefit, and sickness benefit. The basic amount is adjusted annually.