Key Rulings and Developments in Employment Law

Several rulings from 2026 affect how much room employers have to act, and how they need to run the process. In this article, we will walk you through the following changes. 

• The Supreme Court has clarified the right to terminate the employment of the organization’s top executive based on an agreement regarding severance pay. 

• The Supreme Court has also set the sentencing level for aggravated wage theft. 

• Gulating Court of Appeal has considered when a resignation must in reality be treated as a dismissal by the employer. 

• The Supreme Court will also clarify the conditions for treating a position as "particularly independent." That ruling will matter for businesses that exempt employees from the general rules on working hours and overtime in the Working Environment Act. 

This is the status as of 11 September 2026. 

Leaving in return for severance pay: the organizations’ most senior executive 

What it means for employers 

• Section 15-16, second paragraph of the Working Environment Act applies only to "the organizations’ most senior executives". 

• The executive must have waived their rights under Chapter 15 of the Working Environment Act in advance, in return for severance pay on departure. 

• The employer can then end the employment without showing objective grounds under section 15-7. 

• The decision can still be reviewed if it appears arbitrary, or rests on irrelevant considerations or on materially incorrect factual assumptions. 

• The executive should be given the chance to respond before the decision is made, even though no formal duty to consult applies. 

HR-2026-221-A concerned a municipal chief executive who had waived her rights under Chapter 15 of the Working Environment Act in her employment contract, in return for six months' severance pay. After a little over six months in the role, the municipal council decided that she should leave with immediate effect. 

The key point in HR-2026-221-A is not that people in senior positions generally have weaker protection against dismissal. The judgment concerns the specific arrangement for an organization’s most senior executive, and only where that executive has waived their rights under Chapter 15 of the Working Environment Act in advance, in return for severance pay. 

An agreement of this kind changes the basis on which employment can be ended. The employer does not have to prove breach of duty, poor results or other circumstances that would give objective grounds for dismissal. The ordinary rules on consultation, written grounds and the right to remain in the position do not apply either. For public sector employers, the decision is also not an individual decision under the Public Administration Act. 

However, that does not mean the decision escapes review altogether. The employer must stay within the outer limits of managerial prerogative. The courts can step in if the decision is arbitrary or rests on considerations unrelated to the employer's role. If the employer has pointed to specific facts, the court can also check whether those facts are materially incorrect. 

The distinction matters, since it means that courts can review whether the decision rests on a sound basis, but not whether the business should have kept the executive. The choice of who is to lead the business remains with the Board or the body authorized to make such a decision. 

The municipality's handling was quick and at times rushed. The chief executive had still been made aware of the criticism and had the chance to respond with help from a lawyer. Nor did the Supreme Court find that the disputed information about her CV had been decisive for the council's decision. 

For employers, the most important lesson lies in the agreement and in how the decision is prepared. It must be clear that the employee really is the organization’s most senior executive, and that the waiver was agreed before the question of departure came up. The agreement should also cover the size of the severance pay, when it takes effect and how other income affects it. 

The Supreme Court did not rule on whether the waiver also covers the special protection on pregnancy, leave, illness and military service under sections 15-8 to 15-10 of the Working Environment Act. 

Nine months in prison for aggravated wage theft 

What it means for employers 

• Not every error or disagreement about pay constitutes as wage theft. Penalties require a serious breach of an intent to secure unjust gain. 

• Criminal liability may apply to the person who actually runs the business and controls the payments. 

• Key factors include the amount involved, the duration, the degree of systematic conduct, and the employees' positions. 

• Financial difficulties do not justify withholding earned wages. 

Case HR-2026-1398-A concerned a deliberate and systematic failure by an employer to meet wage obligations. The penalty was not determined based on the amount alone; the Supreme Court also emphasized how the business was operated, who was affected, and how the funds were used. 

Over a six-month period, 13 employees did not receive their wages or holiday pay. Employees who quit due to non-payment were replaced by new ones. At the same time, the business lacked basic controls regarding wage payments, tax deductions, and accounting. The defendant also failed to keep personal finances separate from those of the business. 

The conduct was therefore significantly different from an isolated error or a genuine dispute regarding the employees' claims. The Supreme Court concluded that wages had been deliberately withheld to finance the defendant's personal expenses. 

When determining the penalty, the Supreme Court considered previous rulings on financial crime. However, the Court held that the case was more serious than the monetary amount alone might suggest. The conduct affected multiple employees who had limited means to safeguard their own interests, while simultaneously depriving them of income that they relied on for their daily needs. The sentence was initially assessed at seven months in prison, but the defendant's prior conviction for VAT fraud resulted in an additional increase in the penalty. The final sentence was nine months. In addition, he was disqualified from conducting business activities for five years. 

The judgment demonstrates that criminal liability is reserved for cases involving deliberate and improper conduct. There must be an intent to secure an unjustified gain for the employer or others. At the same time, the ruling serves as a clear warning that wages cannot be withheld to cover other expenses. 

Voluntary resignation in an unannounced meeting upheld 

What it means for employers 

• What matters is not only who signed the notice, but who actually took the initiative to end the employment. 

• A pre-written resignation letter and a meeting with no stated agenda may suggest that the resignation effectively originated with the employer. 

• A comprehensive assessment must be made regarding the purpose of the meeting, whether the employee was subjected to pressure, whether they understood the consequences, and how the parties acted after the meeting. 

• Employers should state the topic in advance, offer the employee the chance to bring a union representative or another support person, and prepare meeting minutes, 

• The municipality won the case because the evidence as a whole showed that the employee wanted to resign. However, the procedure that followed was criticized.  

LG-2025-139235 concerned a health care worker who had accepted a permanent position with a municipality. Before she started, she was called in by text message to a meeting without being told what it was about. Two managers took part. One of them brought a pre-written resignation letter, which the employee signed. The meeting lasted between five and fifteen minutes. 

The District Court held that the resignation had in reality been treated as a dismissal by the municipality. The Court of Appeal reached the opposite conclusion and ruled in favor of the employer. The Supreme Court’s Appeals Committee refused to hear the appeal (ref. HR-2026-1394-U). The Court of Appeal’s judgment is therefore final. 

The case demonstrates that a signature does not always give a reliable answer to who ended the employment. If the employer created the situation or pushed the decision through, a formal resignation can be treated as a dismissal by the employer. 

Several factors weighed against the municipality. The employee had been summoned to a meeting without being informed of its purpose. Two managers attended, and one of them had prepared the resignation document in advance. The meeting was brief, and the municipality did not produce minutes. 

However, these factors were not decisive. The Court of Appeal assessed the signature in the context of events both before and after the meeting. The employee had previously expressed that she did not wish to work in the departments in question. During the meeting, she also rejected proposals for alternative work locations. She was offered the option to postpone the meeting and bring a representative, but she chose to proceed with the meeting. 

After the meeting she acted in line with the resignation. She did not take up the permanent position and continued instead as an on-call substitute. Nor did she claim the resignation was invalid when the trade union first contacted the municipality; this argument was raised six months later. 

It was the interplay of these circumstances that proved decisive. The Court of Appeal found it most likely that the employee understood what she was signing, and that the decision was her own. There were therefore no grounds to treat the resignation as an act of municipality's, or to set it aside under sections 33 or 36 of the Contracts Act. 

Nevertheless, the judgment does not endorse the municipality’s procedure. An employer who brings a pre-written resignation document to an unannounced meeting assumes a significant evidentiary risk. The employee should be informed of the subject of the meeting, given the opportunity to bring a support person, and allowed reasonable time to consider the decision. The meeting should also be documented in writing. 

When is a position "particularly independent"? 

What it means for employers 

• The job title, and an agreement that overtime is included in the salary, are not decisive factors. 

• The key factor is whether the employee can actually prioritize tasks and decide when and how the work is to be performed.

• Project staff are generally not covered by this exemption. A certain degree of flexibility in the daily work routine is insufficient. 

• Getting the classification wrong can lead to substantial overtime claims. 

• The appeal hearing took place on September 2 and 3, 2026. No judgment had been issued as of September 11. 

The case concerns a project manager at a contracting company who claimed payment for extensive overtime work. The employment contract stipulated a 40-hour workweek and stated that "normal overtime" was included in the salary. 

After the company went bankrupt, the employee filed a compensation claim exceeding NOK 460,000 against the company’s board chair and CEO. 

In LG-2025-4886, Gulating Court of Appeal held that the project manager held a particularly independent position under section 10-12, second paragraph of the Working Environment Act. Consequently, the regulations on working hours—including the right to overtime pay—did not apply. The Supreme Court is now set to clarify the scope of this exemption 

The line is not drawn between employees with a lot of responsibility and those with little responsibility. The question is whether the employee acrtually controls their own working situation to such a degree that the general working hours rules do not apply. 

An employee can be responsible for large values and demanding deliveries without holding a particularly independent position. If clients, deadlines, staffing or internal instructions in practice decide when and how the work has to be done, the freedom may be more formal than real. This is why the preparatory works say that project staff are in principle not covered. 

The project manager in LG-2025-4886 did, however, have an unusually free role. He led several design-and-build contracts, allocated resources, and made ongoing choices about priorities across the projects. He managed subcontractors, followed up finances and progress, and handled variations with the client. The CEO did not control when or where he worked. 

The Court of Appeal held that this real freedom was enough for the position to count as particularly independent. The fact that the employment contract also set fixed normal working hours did not change that assessment. 

The court also considered whether the chair of the board and the CEO could be held personally liable under section 17-1 of the Companies Act. It was not documented, however, that the employee had raised concerns about an unsustainable workload. Nor did the court find that management had imposed a workload that would justify personal liability. 

The Supreme Court is now set to determine whether the Court of Appeal drew the line correctly. In particular, the ruling may clarify the significance of the work being part of time-bound projects and the extent of influence an employee must have over their own work effort. 

Businesses should therefore examine who actually controls working hours. A job description involving extensive responsibilities or a clause stating that overtime is included in the salary is insufficient if, in practice, the employee has limited control over their daily work routine. Furthermore, the employer must ensure a sound working-time arrangement, even when the position falls under the exemption. 

If you have questions about what these rulings mean for your business, or want a review of your own contracts, routines or working hours arrangements, we're happy to talk.