The Probationary Period Is an Opportunity for Both Employer and Employee

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The Probationary Period Is an Opportunity for Both Employer and Employee

Many employers mistakenly believe that the probationary period is the same as temporary employment under Norwegian law. That is not correct. The general rule is that all employment relationships are permanent from the very first day, unless the law provides a legal basis for agreeing otherwise.

The probationary period can be a valuable tool for employers, provided they understand what it entails and how to use it correctly.

The probationary period is not a temporary employment contract—it is a statutory right for employers to assess whether the employee is suitable for the position, based on broader criteria than those applied later in the employment relationship. As a rule, all employment contracts are permanent. This means that every employee is considered permanent from day one, unless one of the exceptions in the Norwegian Working Environment Act applies.

Temporary employment is permitted only in a limited number of cases, all of which are listed in the Working Environment Act. If the employment relationship does not fall under one of those exceptions—for example, a substitute position for a named person—then the employment is permanent, even if the parties have agreed otherwise. A permanent employment relationship continues from the date of hiring until terminated by either party.

What Is the Probationary Period?

The probationary period is a statutory right for employers to assess three specific aspects of an employee:

  • professional competence
  • adaptation to the work
  • reliability

These three qualitative elements are used to determine whether the employment is a good fit. Dismissal still requires just cause, but the threshold is somewhat lower during the probationary period than later in the employment relationship.

It is important that the probationary period does not become just a passive observation period. The employee should receive concrete feedback, clear instructions, and well-defined goals.

The probationary period is not meant to be a “warm-up” for the real job. It is a defined period in which the employee must demonstrate mastery of their tasks, fit into the company culture, and follow given instructions. At the same time, the probationary period is also a six-month period in which the employer must show that the workplace is as promised—that it engages with its employees, provides sufficient and appropriate tasks, and makes expectations and requirements clear.

A Mutual Right to Step Back

The probationary period is, in practice, a mutual trial period.

With good planning and proper follow-up, the risk of a poor hire is significantly reduced. For the employer, the probationary period offers room to test candidates they may be unsure about, or wish to give a chance despite some mismatches. As long as agreements, goals, feedback, and efforts to give the employee the best chance of success are documented, the probationary period provides a genuine opportunity to reverse course.

It is a chance for both parties to walk away if the employment relationship turns out not to be the match they expected. It is important to remember that an employment relationship, like any other relationship, depends on both parties thriving and developing.

Our Key Advice Before Starting Employment: Do Your Groundwork Well!

  • Job posting: Be specific and clear; avoid buzzwords.
  • Test, test, and test again: Use the interview to test competence, and continue testing throughout the probationary period.
  • Onboarding plan: Have a strategy for introductions—help the employee get to know the company and their tasks. Be crystal clear about expectations.

The Most Important Advice for the Probationary Period

  • Feedback: Follow up with formal meetings and provide clear, honest messages.
  • Documentation: Keep written records of employee performance, as well as the instructions, feedback, and information provided. Summarize conversations in an email.
  • Collaboration: Plan activities that promote the employer’s expectations and support the employee’s areas for improvement.

Summary

The probationary period is an important phase to ensure that both employer and employee are satisfied with the employment relationship. When used correctly, it gives both parties a real opportunity to assess whether the relationship should continue. The key to a successful probationary period is clarity, structure, and documentation.

Read more: Brækhus’ expertise in employment law

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Brækhus advised ISS Corporate on the acquisition of technology company Celsia

Brækhus advised ISS Corporate on the acquisition of technology company Celsia

ISS Corporate Solutions, Inc. (“ISS Corporate”), a leading provider of compensation, governance, cyber risk monitoring, and sustainability offerings to help companies improve shareholder value and reduce risk, announced on April 11th the acquisition of Celsia. Celsia is an Oslo-based provider of SaaS solutions for corporate sustainability reporting.

Brækhus acted as buy-side legal advisor in connection with the acquisition of Celsia. The core team consisted of Christoph Morck, Kristine Slotnæs, Alexander Mollan and Ingrid Abildsgaard. The team assisted ISS Corporate throughout the entire acquisition process, from due diligence through the drafting and negotiation of relevant transaction documents until the signing and closing.

Formed in 2021, Celsia‘s software simplifies regulatory sustainability reporting with a particular focus on solving for the European Union’s Corporate Sustainability Reporting Directive (CSRD) regulations. The CSRD, which took effect on 1 January, includes the European Sustainability Reporting Standards, an extensive, detailed new sustainability reporting framework that is addressed by Celsia’s offering. Celsia’s software also supports EU Taxonomy and Sustainable Finance Disclosure Regulation reporting requirements. Presently, more than 300 companies rely on Celsia’s software solutions and the expertise of its staff for accurate and timely sustainability reporting.

ISS Corporate provides expertise in designing and managing governance, compensation, sustainability, and cyber risk programs that align with company goals, reduce risk, and manage the needs of a diverse shareholder base by delivering data, tools, and advisory services. ISS Corporate’s global client base extends across North America, Europe, Asia, and other established and emerging markets worldwide. ISS Corporate is a wholly owned subsidiary of Institutional Shareholder Services Inc., majority owned by Deutsche Börse Group.

Click here for the full press release from ISS Corporate.

Our lawyers are recognised by The Legal 500

Our lawyers are recognised by The Legal 500

Each year, law firms around the world are assessed and ranked by Legal 500. The rankings are based on feedback from clients and other market research. This year too, Brækhus is ranked as a Leading Firm.

In this year’s edition of Legal 500, a number of our lawyers, spread across various fields of expertise, receive recognition for their specialist skills.

Partners Alexander Mollan and Julius Berg Kaasin also achieve individual rankings and are ranked in the category ‘Next Generation Partner’. Alexander is recognised for his in-depth expertise in the field of TMT, and Julius is recognised for his expertise in the field of Intellectual Property.

We are pleased to observe that the fields in which we receive recognition by The Legal 500 represent core business areas for Brækhus. This underline our strong competence environments.

This is what some of our clients say about us:

Highly competent, proactive and we were involved well along the way

Our experience with Brækhus is that they always seek the right expertise from the right person so that challenges and problems can be highlighted quickly. This means that the right solutions are chosen in a short time

A very nice, friendly, cooperative and resolutive team. They are always willing to help and support you in your cases, propose alternative ideas and solutions, and be honest and clear about your situation

An extremely high level of expertise, insight and experience that we as clients can capitalise on. Not least very quick responses to inquiries

Our lawyers have been recognised in Legal 500 2023

Our lawyers have been recognised in Legal 500 2023

Our lawyers have been recognised in the 2023 edition of Legal 500, a comprehensive global guide to law firms. Each year, Legal 500 evaluates and ranks law firms worldwide based on client feedback and market research. In this year’s edition, Brækhus has been ranked as a Leading Firm.

15 of our lawyers across 6 practice areas have been acknowledged in this year’s edition of Legal 500. Associate Partner Alexander Mollan has been named ‘Next Generation Partner’ for his expertise in the TMT (Technology, Media, and Telecommunications) practice area.

The recognized practice areas are fundamental to Brækhus’ core business, and we take great pride in being highlighted by Legal 500 for our strong expertise in these areas.

Our firm has been ranked in the following practice areas:

What our clients say about us:

Quick response rate. Clear recommendations. Efficient use of resources. Close follow-up.

Very diverse and competent team with international knowledge and a very service-minded approach.

Takes a holistic approach, and guides on commercial aspects to make sure nothing falls between the cracks.

No fuss, straight to the point. Great people to work with. Delivers results.

New restrictions on hiring temporary employees from staffing companies

New restrictions on hiring temporary employees from staffing companies

New legislation on hiring personnel temporarily
from staffing companies has been passed in Norway, and will be effective from 1 April 2023.

The rules on hiring from staffing companies is significantly tightened. The objective of the new restrictions is to limit the staffing industry’s scope and role, and to ensure full and permanent positions based on a two-party relationship between the employee and the employer. The changes support the main rule in the Working Environment Act that employees should be employed permanently.

The new rules will come into force on 1 April 2023, but with a three months transitional period for contracts already entered into.

The following changes have been adopted:

  • It is as a main rule no longer allowed to hire personnel for temporary work from staffing agencies.

In the event of a temporary need of labor (i.e. seasonal workers), it may be possible to hire temporarily if an agreement with the company’s union representatives allowing for hire of employees from staffing companies for temporary work. Such agreements will only be possible for companies bound by collective agreements with trade unions of a certain size.

  • Hiring of health personnel may, subject to further considerations, still be allowed.
  • Hiring of specialist workers performing advisory and consultancy services in clearly defined projects may, subject to further considerations, still be allowed.
  • Employees temporarily hired for more than 3 years continuously is given the right to permanent employment in the company which hired them (independent hiring basis)
  • The distinction between hiring of staff and engagements under service contracts is clarified more closely. A practical and legal guide on the matter will be prepared by the authorities.
  • The Norwegian Labour Inspection Authority (Arbeidstilsynet) is given extensive responsibility and authority to ensure compliance with the new regulations.

Please note that hiring employees from companies, whose main purpose is not to hire out labor is not affected by the restrictions. There are certain criteria which will have to be fulfilled and each specific case will have to be assessed closely before hire from such companies are carried out.

Furthermore, it will still be possible to make use of service contracts (i.e., subcontractors). The legal amendments also bring new provisions to clarify the distinctions between hiring of labor and service contracting. There are new additional factors to consider when assessing whether there is a hiring of employees or a service agreement (In Norwegian: entreprise). The rules lean towards defining more contracts as hiring of employees than before.

The new regulation intends not to introduce any new regulation for determining what is a staffing agency. As of today, in addition to typical agencies whose only business is lease of personnel, companies having its main revenue from lease of personnel will be covered. The same goes for companies with longer lease contracts and lease of personnel as separate business lines.

The new regulation will definitely create a need to look further into whether the company hiring out employees, is to be defined as a staffing agency. Further, it will be important to clarify if a classification as hire of personnel is likely and, if possible, to adjust contracts to avoid such a classification. Above all, the new situation needs to be addressed in order to avoid interruptions where previous used personnel are not able to perform work agreed. Change of model will also have an impact the tax situation for both the company and foreign employees used in Norway.

In what situations will it be possible to hire from staffing companies?

  • For temporary replacement of permanent employees during holidays, leave of absence, sick leave and similar situations.
  • Work training as for instance trainees.
  • For participants in Labor market schemes under the auspices of or in cooperation with the Labour and Welfare Administration (NAV).
  • For athletes, trainers, referees and other leaders within organized sports
  • Upon agreement with employees’ union representatives, if the company is bound by a collective agreement with a trade union of a certain size.

Options for companies in need of increased labor for a limited period:

  • Increase the number of permanent employees
  • Hire employees from companies which main purpose is not being a staffing company
  • Employ workers temporarily directly in the company
  • Divide the work by entering into construction agreements with clients.

These options will have to be assessed further based on the facts and circumstances of each individual case.

Special rules for construction work on construction sites in Oslo, Viken and former Vestfold county

A ban is introduced on hiring from staffing companies for construction work on construction sites in the aforementioned areas.

As of from 1 April 2023, it will be no possibility of hiring from staffing companies on construction sites in these areas as regards to the construction work. A transition period of 3 months applies to already concluded contracts.

The terms “construction work” and “construction site” are defined in separate regulations.

Our team is here to discuss these matters with you. Please do not hesitate to reach out to us.