For the first time, Norway's Supreme Court has issued a ruling on the interpretation of a "particularly independent position" under the Working Environment Act.
A project manager at a contracting company that went bankrupt took the case all the way to the Supreme Court to obtain clarification of a claim for overtime pay, because he believed he did not hold a "particularly independent position" as his employment contract suggested.
The employer won in both the district court and the court of appeal, but the Supreme Court overturned the court of appeal's judgment and ruled in favour of the project manager's claim.
Employees who hold a "particularly independent position" are exempt from the working hours provisions of the Act and are not entitled to overtime pay, even if they work more than ordinary working hours. This is an exemption that is widely used in Norway, typically for positions such as project managers, mid-level managers and advisers.
The ruling is of fundamental importance and sets boundaries for when the exemption can be used. The exemption has most likely, until now, been interpreted too broadly, and this ruling will therefore lead to a tightening of how the exemption is applied going forward.
The key point for the Supreme Court in this case was that this is a narrow exemption rule, where the decisive factor is whether the employee personally decides what work is to be done, what is to be delegated, and how and when the work is carried out. This will always depend on a specific assessment, in which external constraints such as project deadlines, regulatory requirements or customer demand also play a part. In other words, it is not only the employer's requirements that set the framework for the assessment. It is not sufficient that the employee has agreed to flexible working hours, there must be a clear and obvious independence relating to the scope and timing of the work. Salary and job title are likewise not decisive, even where the salary is intended to compensate for overtime.
In this particular case, the project manager's role is described as follows:
«As the court understands it, A (author's note: the employee) himself decided which tasks were to be performed and how they were to be performed, and he made the necessary prioritisations, both within individual projects and between projects. Prioritising tasks between projects appears, moreover, to have been a necessity – he managed up to 5 projects at the same time. B (author's note: the employer) explained that A had 'a very free role’»
Despite this description, the Supreme Court found that the position was not "particularly independent". The project manager had limited control over his own workload and over how the work was carried out. He was also constrained by external framework conditions, such as deadlines set by customers, regulatory requirements and other circumstances outside his and the employer's control. Weight was also given to the fact that the employee had requested time off in lieu due to a heavy workload, and that he was in practice unable to decline the tasks assigned to him and therefore had no real freedom to determine the scope and timing of the work.
The ruling shows that the exemption for a "particularly independent position" must be interpreted more strictly than many businesses have assumed in their practice to date.
For employers, this creates a concrete need to review existing job categorisations, employment contracts and actual working practices, before the Labour Inspection Authority, an employee or a court beats you to it.
Aider Legal is happy to help map out which positions in your business may be at risk, assess whether your current exemption practice holds up in light of the new ruling, and help ensure that employment contracts and routines comply with applicable law. Please feel free to contact us for a no-obligation review of your positions and routines relating to working hours and overtime.