Episode 9: Six Months to Success - Leveraging Trial Periods in Norwegian Employment

New Job in Norway? The Must-Know Probation Period Explained!

Confused about trial periods in your Norwegian job?  This podcast breaks it down in 10 minutes.

Learn:

• What a probation period is & why it's important
• Employer benefits like shorter notice periods
• When & how to terminate during probation (avoid last-minute drama!)
• Extending probation & the sneaky catch
• Proper termination procedures (don't mess this up!)

Great for employers & employees!

Transcript

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[00:00:07] Lill: Hi, and welcome to a new episode of Norwegian Employment Law in 10 minutes. My name is Lill Egeland. I am a lawyer in the law firm Simonsen Vogt Wiig. And today I'm again very lucky to have my colleague Thomas Talén in studio. Hi, Thomas. 

[00:00:21] Thomas: Hi, Lill. Nice to be back. 

[00:00:22] Lill: It is great to be two people. The topic of today is trial period, probation period.

[00:00:29] And let's just dive straight into that concept. Under Norwegian law, it is possible to agree on a six month maximum trial period, and that's something we definitely recommend our clients to do in almost any situation.

[00:00:46] Thomas: Always. 

[00:00:47] Lill: The one exception perhaps being if you have a CEO, general manager. In big companies it's not so common and that's linked to something else called severance clauses for the CEOs.

[00:00:58] Thomas: Yeah, they have different mechanisms to then terminate if that's to be the case. 

[00:01:03] Lill: Exactly. But for all other employees, if you have someone new into the company, do agree on a probation period of six months. And you need to do that in writing. It's not something that you can just agree on. You have to include it in the employment contract. So that's important. Six months, it's important. 

[00:01:23] And what's the purpose of the trial period? That's simply put for the employee to test out the company and for the company to test out the employee. And that means that, there are some different rules in terms of terminations. in this period. Can you elaborate, Thomas?

[00:01:41] Thomas: Yeah. First of all, we have to separate this from an ordinary redundancy situation where the normal grounds for the termination applies, even if the same period or you can be terminated due to redundancy during a probation period as well. But if it doesn't work out and the whole idea of a probation period is, as you say, to find out, is this working for both parties?

[00:02:11] And, the threshold, is specifically set out lower regarding underperformance, reliability, and, what we could say, the employees adaption to the working situation, the employment. 

[00:02:28] Lill: Yeah, exactly. So a lower threshold, but, for instance, in Sweden, there's no threshold at all during the probation period.

[00:02:37] How is that in Norway? 

[00:02:39] Thomas: Yeah, it's still a quite high threshold to terminate an employee on those grounds, but it's definitely, and the court has set out that it's quite a bit lower than the ordinary termination due to underperformance. 

[00:02:55] Lill: All right. is there anything you need to do as an employer to actually be able to terminate during probation period?

[00:03:01] Thomas: Yeah, again, the following up managing the employment from day one is really important. Don't put yourself in the position that you're almost at the end of the probation period and then you have to start a process. You have to basically, and this sounds maybe harsh, but you have to start managing from day one to include, train on board the employee in a good manner.

[00:03:28] And then you have to follow up throughout the probation period. 

[00:03:31] Lill: And if we're talking about, performance related terminations during probation period, would you say that a warning is necessary? 

[00:03:44] Thomas: it's not required by law, but it is definitely, recommendable and, for documentation purposes, a warning should be, yeah, it's, a good thing to then document that you have, given, the employee a heads up that things are not, working out as, you want to.

[00:04:03] Lill: Yeah, I agree. As a proof of you as an employer having actually said to the employee, listen, this isn't working out. Either you improve or we are going to have to consider terminating our employment. You almost need to put it in those straight words in some format or another, whether you call that a warning, if you have it in a minutes or an email doesn't matter, but you need to be able to document that. And to your point, not starting at the end of the probation period, because that's something we often see as lawyers, right? We have clients coming to us in month five of the probation period and really have no documentation of follow up, etc.

[00:04:42] So that's really, a big pitfall for employers that they do not document. 

[00:04:46] Thomas: Yeah, they put themselves in a really difficult situation. And again, you can terminate the employment also earlier in the probation period. You don't have to wait until the end and fulfill the six month period before terminating. In some instances, you see the issues at stake at two months and then, terminate at that point. And why it's so important to then not start at the end of a period is that there are some differences in the employee's rights if terminated inside or outside the probation period. 

[00:05:25] Lill: Right. Because as you said, the threshold for terminating is lower.

[00:05:30] And then also there are some additional. benefits, if that's a word we can even use in this situation. 

[00:05:36] Thomas: Yeah.

[00:05:36] Lill: During the probation period, what are those? 

[00:05:39] Thomas: First of all, the notice period is much shorter. It's, down to two weeks, 14 days is the minimum under Norwegian law. And, it runs from the day you receive it, not the first in the subsequent month. So it's a much shorter notice period. So the require the, you have, less obligations. Secondly, and maybe most importantly is that if you are terminated during the probation period, you, as a general rule, don't have the right to remain in your position if you dispute the termination. 

[00:06:13] Lill: Exactly.

[00:06:13] Thomas: Which you have in an ordinary dismissal. 

[00:06:16] Lill: That's a big difference because let's assume that you have an employee and then you don't terminate during the probation period. But you terminate at seven months, then the employee, if he or she sues you, and that's not uncommon in Norway, they will be entitled to continue working with you, receiving salary, coming to work until a court finally settles the case, typically seven to 12 months after.

[00:06:38] Thomas: Exactly. 

[00:06:39] So they're showing up at work and, yeah, it's a straining situation for all parties.

[00:06:44] Lill: Exactly. This doesn't apply in the probation period. So that's a real key issue in terms of, of actually using the probation period in the way it's intended to be used to test out the employee. 

[00:06:55] Thomas: Definitely. 

[00:06:56] Lill: A couple of last things before we round off.

[00:06:58] First of all, let's say that you really haven't been able to test out the employee and we're closing in on five months and you just want to extend the trial period, the probation period. Can you do that? 

[00:07:11] Thomas: Actually, there is an opening for prolonging the probation period, but that has to be, first of all, you have to notify the employee prior to the end of the original probation period.

[00:07:24] Secondly, there has to be based, the extension has to be based on issues that are not related to the employer. 

[00:07:32] Lill: Exactly. So the absence of the employee, right? Because you can only extend the probation period if the employee has been absent from work, and then you can extend it with the duration of that absence. 

[00:07:46] Thomas: Exactly. Typically in sickness issue when the employee is sick for a longer period and you haven't been able to build the relation and see how he or she is performing. 

[00:08:00] Lill: Yeah. Exactly. And third, you need to have included it in the, employment agreement, this ability to actually extend. So, that's an important thing.

[00:08:10] And one last topic before we round off. And that's the question of, let's assume that we are really closing in on the end of the probation period. And let's assume that you send a termination on the very last day, will it be considered to be in the probation period or what is the situation? 

[00:08:31] Thomas: That's, a very good question, Lill, because if you can't provide documentation or at least make it reliable that you have given the notice within the trial period. The effect is that, the employee is actually considered to have the full protection with the, prolonged, notice period and has the right to remain in his or her position. So, it's, you, get a much stronger protection as an employee against dismissal. 

[00:09:01] Lill: We want to avoid terminations sent at the very last day of the probation period. And if we do then as a very precaution, make sure that it actually in a provable way reaches the employee on that particular day and be able to document that. Having said that, you can, if let's assume that we have a meeting with the employee at the very last day of the probation period, and then we hand over the termination on that very day, then the fact that the notice period runs after the end of the probation period does not imply that we are over at the higher level of protection. 

[00:09:38] Thomas: It's sufficient that the notice is given during the probation period. 

[00:09:42] Lill: Yeah, exactly. 

[00:09:43] Thomas: But again, also, when you mentioned the meeting. It's important that the formal requirements under the regulations are still applicable during the probation period, as you need to have a consultation meeting prior to the termination. 

[00:09:58] Lill: That's a good point. I jumped straight to the actual notice period. Yes, you need to invite the employee to a formal consultation meeting before making the decision to terminate. You need to inform the employee that, you can bring a representative and that it is a termination meeting. You need to hear the views of the employee. You need to check whether there are any circumstances that could be really bad for the employee in terms of termination. And then you take all this into consideration to make your decision and you issue a letter that needs to comply with Norwegian law. And if it doesn't, then, that's a problem because then the termination is invalid.

[00:10:34] Thomas: Yeah. And then the situation changes because then you're outside the probation period. If the dismissal is invalid, then you have the ordinary protection or the ordinary rules apply. So then you're back again at the long notice period and the right to remain in your position. 

[00:10:54] Lill: Exactly. 

[00:10:56] That was it for the probation period.

[00:10:58] Thank you so much, Thomas, for being in the studio today. 

[00:11:01] Thomas: Happy to be here with you. 

[00:11:02] Lill: And thank you for listening and hope to see you in the next episode.