Nordic Employment Law Bulletin - October 2025

The Board of Equal Treatment – handicap by association. The Danish Board of Equal Treatment recently decided whether the dismissal of an employee who had been granted lost earnings to care for his son, who had a disability, constituted unlawful discrimination. The employee was absent from work from the end of February until the dismissal in November 2022 to care for his son. During this period, the employee’s son was diagnosed with ADHD and autism. 

The employer wanted a plan for the employee’s return to work. In this regard, the employee stated that he could not give a specific date for his return but estimated that it would take 5-6 months before it would be realistic to return to work.

A few days later, the employee was dismissed from his position. The Board of Equal Treatment stated, among other things, that apart from the employer’s obligation to make adjustments, there is no requirement to continue to employ a person who is not competent, suitable and available to perform the essential functions of the position in question. As the employee had stated that he believed it would take 5-6 months before he would return to work, the Board of Equal Treatment found that, at the time of dismissal, the employee was not available to perform the essential functions of his position, and there was considerable uncertainty as to whether and when the employee would become available again. The Board of Equal Treatment found that dismissal was not unlawful. 
 

Changes proposed to Annual Holiday Act – Our international clients are often amazed by the provisions of the Finnish Annual Holiday Act and not the least by the carry over rules and the concept of saving holidays. An employer and an employee may agree that holidays exceeding 18 holidays may be saved for later use and an employee has a right to save days exceeding 24 holidays. When these holidays shall be used, is eventually up the employee to decide. However, according to the current government programme, the legislation is planned to be changed so that going forward the employer would eventually decide on the timing of these saved holidays unless otherwise agreed. The government proposal on the topic is expected early 2026. 

Court of Appeal rejects appeal in case on averaging of working hours

The Court of Appeal has rejected an appeal from a staffing agency after the district court ordered the company to pay wages to a carpenter for a period without assignments. 

The carpenter, employed in an 80% position, claimed wages for January-March 2024. The company argued that he had already worked more than his contracted share earlier in the year under an agreement on averaging working hours. The district court held that such an agreement is not valid unless accompanied by a work schedule showing when the employee is to work and when to be off duty. In the absence of such a plan, the employee was entitled to steady pay regardless of workload fluctuations. The company was ordered to pay NOK 48,380 to the employee, plus legal costs.

The decision of the court underlines the importance of not only having clear written agreements in place, but also continuously monitoring how such agreements are practiced towards one or more employees. Employers may need to revisit the wording of existing agreements regarding the averaging of working time.

The decision can be found (in Norwegian only) HERE. 

Pay Transparency Directive: Norwegian employers to face stricter rules

The EU Pay Transparency Directive (EU 2023/970) is considered EEA-relevant and is expected to be implemented into Norwegian law by June 2026. The Directive aims to reduce the gender pay gap, which in Norway is roughly 12 %. Many employers already comply with the Activity and Reporting duty (ARP) under the Equality and Anti-Discrimination Act, which applies to workplaces with 50+ employees. However, the Directive imposes more detailed obligations on pay transparency, employee access to information and reporting. 

When implemented, key changes will include:

• New reporting obligations will be introduced gradually, starting with companies with 250 or more employees from June 2027.
• Employers must disclose starting salaries or pay ranges. Asking candidates about previous salary will no longer be allowed.
• Employees can request information regarding their own pay and average pay by gender for work of equal value. Employers must proactively explain pay-setting criteria and wage developments.

Norwegian employers should already now prepare by reviewing pay structures, updating recruitment practices, and establishing systems to handle transparency requests. Early adjustments and involving employee representatives can ease the transition and reduce legal risks.

Supreme Court clarifies reassignment duty in summary dismissals for serious misconduct (HR-2025-1687-A)

On 5 September, the Norwegian Supreme Court ruled that a nurse who had struck an intellectually disabled service user/patient with a flat hand in the face, could be lawfully summarily dismissed with immediate effect. The employee, with over ten years of service, was summarily dismissed for what the municipality considered a gross breach of duty. 

The Court of Appeal had previously found the summary dismissal invalid, partly because the municipality had not considered reassignment. The Supreme Court overturned this, holding that in cases of serious contractual breaches, such as conduct that destroys trust, employers are not required to consider reassignment. The Court found that the Court of Appeal had misapplied the law in gross breach cases.

The Supreme Court ruling confirms the existing rule of law and can be found (in Norwegian only) HERE.

Sweden to Review Background Check Legislation — The Swedish government has launched an inquiry aiming to develop a coherent and legally sound framework for background checks in both the public and private sectors. The intention is to address the growing risks of infiltration, organised crime and undue influence in workplaces, particularly within welfare services and public procurement.

The aim is to enable organisations to access relevant information, such as criminal records and financial history, when there is a legitimate need, while maintaining robust safeguards for personal integrity. The inquiry will also consider whether additional sectors should be subject to mandatory checks, including eldercare and disability services.

The inquiry will consider the balance between legitimate security needs and individual rights, including the right to privacy and reintegration after serving a sentence. Legislative proposals are expected by 11 March 2027 and will be aligned with EU data protection standards and Sweden’s constitutional framework.

New governmental budget for 2026 – The Swedish government recently released their proposed budget for 2026. The budget bill includes several employment-related measures: an expansion of eligibility for temporary parental allowance, a reduction in the application period for temporary parental benefit from 90 to 30 days, and a temporary reduction in employer contributions for young workers aged 19-23. The latter measure aims to address rising youth unemployment over the past year.