Bill for a new act on statements of employment terms has now been tabled

With the bill, the Ministry of Employment has proposed that the bill will be a new act that will replace the current Statements of Employment Terms Act from 2010. There will be fundamental changes to the employer's duty of disclosure and the group of employees covered by the rules, and the bill introduces a number of minimum requirements regarding employment conditions.

The most significant amendments introduced by the bill are:

1) A larger group of employees are covered

Under the current rules in the Statements of Employment Terms Act, an employee is entitled to information on the working conditions from an employer (i.e. an employment contract) if the employment relationship has a duration of more than 1 month and if the average weekly working hours exceed 8 hours.

The bill proposes that all employees with an employment relationship where the predetermined or actual working time exceeds an average of three hours per week over a reference period of four consecutive weeks are covered by the rules of the act.

The proposed limit of three hours refers to both the predetermined working time and the time actually worked. If an employee works more than an average of three hours per week over a period of four weeks, the employee is entitled to information on working conditions from the employer irrespective of what may have been agreed in advance regarding working time.

Furthermore, it is proposed that the act should also apply to employees with an employment relationship where no guaranteed amount of paid work is fixed in advance before the start of the employment relationship. Such employees will often be in an employment relationship where they are called upon when there is work for them. If the employees are obliged by the employment contract to be on call, which employment has often been characterized as "0-hour contracts", they are entitled to be informed of the conditions of employment regardless of the actual number of working hours.

2) Extended information duty for the employer

It is proposed in section 3 of the bill that the employer must provide the employee with information on all essential terms of the employment relationship, including at least the information listed in section 3(2)(1)-(15).

The provision is a continuation of the existing provision in the Statements of Employment Terms Act, but with the amendment that the list of information that an employer must provide to the employee is now extended by five items. The five items concern information for temporary employees, employees with an "unpredictable work pattern", the duration and conditions of any probationary period, the duration of paid absence (i.e. not only for holidays), any arrangements for overtime and payment thereof, a description of any entitlement to training and social security schemes.

The new wording of the provision is not intended to change the assessment of what constitutes material information beyond the 15 items listed in sub-section 2.

In addition, the bill also contains an addition to the specific information to be provided to posted employees, cf. section 4 of the bill, as well as a requirement that changes to the employment contract must be given in writing as soon as possible and no later than the date on which the change takes effect, cf. section 5 of the bill.

3) The information must as a rule be provided within seven days

Under the current Statements of Employment Terms Act, the employer must provide the employee with information on all material terms of the employment relationship no later than one month after the employee has taken up employment. The bill proposes a significantly shorter deadline of seven calendar days after the commencement of the employment relationship for a major part of the required information while a deadline of one month still applies for a minor part of the information.

However, it is recommended that employers provide all information together, thus ensuring that the now stricter 7-day deadline is respected.

4) Strengthening of minimum requirements for employment conditions

The bill also proposes a number of minimum requirements regarding specific employment conditions. These entail, among other things, that:

• a limitation is introduced on any probationary period, which may not exceed six months. In case of fixed-term contracts, the probationary period may not exceed one quarter of the duration of the contract. The statutory probationary period of 3 months in the Salaried Employees Act is maintained,
• an employer may not prevent an employee from taking up concurrent employment or, on that basis, treat the employee unfavourably if the employee can continue to work in accordance with a schedule set by the employer and if the concurrent employment is not incompatible with the existing employment relationship,
• an employer may only require an employee whose work pattern is "wholly or mainly unpredictable" to work if the work takes place within the predetermined reference hours and reference days and if the employee has been notified of the work assignment, such notification period to correspond to the one the employee was informed of initially.

Protection against unfavourable treatment, burden of proof and sanctions

The bill proposes that the employer may be required to pay compensation for breach of the obligation to provide information and for unfavourable treatment of an employee who considers that he or she has been dismissed or subjected to measures having equivalent effect because he or she has asserted his or her rights under the act. In the latter case, a shared burden of proof between the employer and the employee is also proposed.

Entry into force

If adopted, the bill is expected to enter into force on 1 July 2023.

An employee already employed before 1 July 2023 may request to receive his or her contract or have it supplemented in accordance with the new requirements under the act. The employer has eight weeks to fulfil the request.

In this connection, employers should ensure that their current templates for new as well as for existing employees are updated (to the extent requested by the latter).

Bird & Bird's comments

If you have any questions about how employers should deal with the new rules, you are welcome to contact Bird & Bird. We will also be able to assist with the update of employers’ current contract templates.