Norwegian Employment Law in 10 Minutes, ep. 6: Termination Agreements

Termination Agreements: A Focused Discussion

• Concept and Validity: The episode begins with an exploration of the concept of termination agreements and severance clauses. Specifically, it discusses the legality and practicality of including severance clauses in employment contracts in Norway, highlighting that such clauses are generally valid only for top management positions, like CEOs.
• Severance Clauses: It’s advised against including severance clauses in contracts for positions other than the CEO. A recent judgment has indicated that for other management roles, these clauses may not hold up, giving employees the option to choose between severance payment or challenging a dismissal.
• Negotiating Termination Agreements: The conversation shifts to the end of employment relationships, emphasizing the strategic importance of termination agreements for employers. Due to the high threshold for valid terminations and potential lengthy legal battles, reaching a mutual termination agreement can be a preferable route.
• Legal and Practical Advice: The podcast provides practical advice on negotiating termination agreements, including the importance of presentation, choice of words, and understanding the legal and commercial elements essential for drafting an agreement.
• Pitfalls and Best Practices: Highlighting common pitfalls, such as poor communication and unlawful termination risks, the discussion offers best practices for employers. It underscores the need for clear, respectful dialogue and proper legal framing when proposing termination agreements.
• Content of Termination Agreements: Key components of a robust termination agreement are outlined, including notice periods, waiver wordings, benefits continuation, and the negotiation of severance pay. The episode emphasizes the lack of a standard regulation on severance pay in Norway, making each case unique.
• Negotiation Strength and Expectations: Finally, the episode delves into the factors influencing the negotiation of severance pay, including the legal strength of the case, industry standards, and previous company practices. It stresses that while there’s no formula for calculating severance, experienced legal advisors can offer guidance on appropriate levels based on various factors.

Conclusion

This episode of «Norwegian Employment Law in 10 minutes» provides a comprehensive overview of termination agreements, offering valuable insights for navigating these complex legal waters. Whether you’re an employer or an employee, understanding the subtleties of these agreements can significantly impact the resolution of employment terminations in Norway.

Stay tuned for our next episode, where we will delve into other critical aspects of employment law.