What you should know if you’ve been laid off

Conditions for laying employees off

Requirement of objective justification for laying employees off

First, an employer must have an objective justification for laying an employee off. Examples include company cutbacks due to lower sales, or company shutdowns where employees’ resources can’t be used to fulfill the company’s needs. Other examples of objective justification can be a lack of orders, full warehouses, practical work obstacles, accidents, etc. The conditions forming the basis for layoffs must be directly connected to the organization (and not the employee).  

It's a pre-requisite that layoffs happen only when there’s been a temporary cutback or shutdown. If conditions during a layoff period change so that there’s no longer any reason to believe that an employee will be called back to work, the company must start a termination process.

Requirement of layoff process/notice

If there are company union representatives working in the organization, the employer must discuss proposed layoffs with them before starting any layoff process. The company must inform its employees why layoffs are necessary and which employees will be laid off in cases where layoffs won’t affect all employees. If this happens, the assessment by which employees are selected for layoffs must be based on justifiable criteria, including an employee’s competency, suitability and seniority with regard to their job.

There’s reason to believe that seniority’s less important when layoffs happen than when dismissals do, because reallocations and training are less relevant when layoffs occur. Financial causes and costs connected to using the individual employee may also be significant for selection. Generally speaking, employers are freer to act when making selections for layoffs than in cases of ordinary dismissal or downsizing.   

The individual employee who’s affected must be given a layoff notice; this notice must be in writing. Layoffs can’t be implemented before 14 days after this notice has been handed out. A shorter deadline may only be given in cases where there are actual unplanned events; these exceptions must be discussed with the company union representatives.

A layoff notice must indicate the likely length of the layoff period. If it’s not possible to say anything about this length, continued layoffs are to be discussed with the company union representatives within 1 month – and thereafter once a month – if the representative(s) and employer can’t agree on any other arrangement.

If layoffs still haven’t been implemented after the notice period’s run out, the employer can’t lay you off at a later date while still referring to the first layoff notice, as they must then give you a new layoff notice. You can be laid off up to 26 weeks over the course of an 18-month period.

What are your rights to receive unemployment benefits when you’ve been laid off?

Your employer’s obligated to pay you your wages at the start of your layoff period (this is called the “employer period”). In response to the COVID-19 pandemic, temporary changes were made to this rule, where NAV took over a large portions of the employer period. In cases where layoffs were implemented after 1 September, the employer period is 10 days long. Please note that this arrangement’s no longer in effect.

After this obligatory wage period’s over, you’ll be entitled to receive unemployment benefits from NAV.

Starting on 1 March 2021, a law on a second employer period for laid-off employees was implemented: If you’ve been laid off for 30 weeks or more after this date, the new law gives you the right to be paid your wages by your employer for 5 days before once again receiving unemployment benefits from NAV.

You can find more information on your right to receive unemployment benefits and the amount you’ll receive here.

Generally speaking, you won’t receive unemployment benefits during the first 3 days you’re unemployed.

If you’re still laid off when the maximum layoff period is over, your employer’s obligation to pay your wages starts up again. At the same time, your right to return to work re-starts as well. Your right to receive unemployment benefits stops on this same date.

If you’re on a partial layoff, you have the right to receive prorated unemployment benefits. One condition for receiving these benefits is that your position has been reduced by at least 50 %.

What are your rights to receive benefits if you’ve been laid off?  

Your employer’s obligated to pay you your wages during the employer period, meaning the first 15 days of your layoff period. After this period’s over, you’ll be entitled to receive unemployment benefits from NAV.  

You can find more information about your rights to receive unemployment benefits and the amount you’ll receive here.

Generally speaking, you won’t receive unemployment benefits during the first 3 days you’re unemployed.

If you’re still laid off when the maximum layoff period’s over, your employer’s obligation to pay your wages starts up again. At the same time, your right to return to work re-starts as well. Your right to receive unemployment benefits stops on this same date.

If you’re on a partial layoff, you have the right to receive prorated unemployment benefits. One condition for receiving these benefits is that your position’s been cut by at least 50%.

If the cause for your layoff stops before your layoff period’s run out, you have to return to work; you’re obligated to do so at short notice. One condition of receiving unemployment benefits is that you must be willing to take other suitable work. If you get a temporary job at a different place during your layoff period, it’s important that you notify your new employer that you can be called back to work at short notice. In these cases your original employer must accept waiting 2-3 days before you return to work. You aren’t entitled to postpone returning to work because of purely personal reasons. However, you can take vacation days during your layoff period. If you do this, your employer must be notified, and you won’t have any right to receive unemployment benefits while on vacation.

Dismissal during a layoff

An employee who becomes completely or partially laid off can quit their job by giving a 14-day notice, even if the notice period in their employment contract says something else. This applies only during the period you’re laid off. In other words, you can’t take advantage of this special rule during the notice period.

If the situation for the layoff moves from a temporary to a more permanent one, your employer can as mentioned start a termination process. If this happens, your employer must first call you in for a meeting to discuss your termination, which must be objectively justified (you can read more about this here).

The result of this kind of situation is that your employer must once again pay you your wages from the date that the reason for your layoff was no longer present. This date might precede the date when your termination notice was given. Your work obligation re-starts on the same date; so you must be prepared to show up for work again during your notice period if your employer wishes it.

If it is your employer that terminates you, the general notice period applies.

Read more about rules for accepting work with a different employer during a layoff period.

You’ll find more information about layoffs on NAV’s website. 

Vacation and layoffs

Even if you’ve been laid off, you have the right to take vacation; a vacation that’s already been set may be taken as planned (unless you and your employer agree on some other arrangement).

You and your employer can also agree that you’ll take vacation while you’re laid off; otherwise, your employer can force you to take vacation in accordance with the rules set down by the Holiday Act.

Vacation and unemployment benefits

When you take vacation, payment of your unemployment benefits stops. So you have to remember to inform NAV when you’re going on vacation. If you do so during this period, the maximum time period your benefits are paid will be extended accordingly.

Payment of holiday pay

Holiday pay is calculated according to the wages you earned the year before. If you’ve worked for the same employer over the past year, you’ve earned the right to receive your holiday pay, even if you’ve been laid off.

How and when your employer pays you your holiday pay depends on the agreements by which your employer is bound, and which payment methods they’ve chosen. No matter which payment method chosen, you won’t lose  your right to receive this payment.  

A great many employers normally choose to pay holiday pay with an employee’s May or June wages. This is often done in combination with the employer’s holding back wages for the number of weeks the employee’s entitled to take vacation. For instance, if you have earned five weeks of vacation, your employer will hold back wages for these five weeks so that you can take these vacation weeks spread out over the entire year without having to any deductions made in your wages. When you’ve been completely laid off and no longer receive wages, there are no wages from which to deduct holiday pay.

Your employer may choose to pay you your holiday pay as usual in May or June. If you are paid holiday pay in June, you don’t necessarily have to take vacation in June. In consultation with your employer and NAV, you can choose when you want to take vacation. When this vacation’s been taken, your right to receive unemployment benefits stops, and you must then live on the holiday pay you were paid in May or June.

Alternatively, your employer may choose to wait to pay you your holiday pay until you’re actually going to take vacation. If you take your entire vacation at once, all your earned holiday pay is paid out at this time. If you take only parts of your vacation, your employer can pay you an equal part of your holiday pay when you go on vacation.

No matter the situation, you must ask your employer to tell you which payment method they’ve chosen.