Entry into force of regulations on entry restrictions for foreign nationals out of concern for public health - legal effects for working life
The Government has tightened foreigners' access to Norway with effect from 29 January 2021. This article discusses the legal effects for affected employers and employees.
1. The main rules on entry restrictions
The new rules mean that all foreigners who are not covered by one of the exceptions in the temporary law on entry restrictions for foreign nationals out of concern for public health, or regulations on entry restrictions for foreigners issued pursuant to this Act, shall be denied entry to the country and rejected.
The Government will continuously assess whether the infection situation indicates that these austerity measures can be lifted or changed. A new assessment is planned for week 7.
The right to enter Norway for discharges presupposes that:
- the foreign national is resident in Norway with a residence permit or right of residency under the Immigration Act;
- the foreign national seeks protection (asylum) in the realm or otherwise invokes a right to international protection due to risk of persecution, etc., cf. the Immigration Act § 73;
- the foreign national's presence in the realm is essential to maintain the proper operation of critical public functions or attend to fundamental needs of the population;
- the foreign national has been granted a residence permit without deferred entry, cf. section 3 of the Act;
- the foreign national has been granted an entry visa under the Immigration Act § 12;
- the foreign national has a visa and is covered by an exemption from the entry restrictions in the Act or Regulations issued pursuant to the Act at the time of entry:
- special reasons so require, such as specific care responsibilities for persons in Norway or other compelling welfare considerations
In addition, it is a requirement for entry that the Immigration Act's conditions for entry are met, including requirements for visas etc.
2. The right to perform temporary layoff
Many employers may find it tempting to temporarily lay off foreign workers who are now affected by the entry restriction. Temporary layoffs, however, presuppose that the employer has a temporarily reduced need for labour - and that this is based on the company's (not the employee's) conditions. The entry restriction as such will therefore not provide a basis for temporarily laying off foreign workers.
However, it is conceivable that the entry restriction could indirectly mean that the employer gets a basis for being able to temporary lay off employees in the company. This presupposes that a possible loss of foreign labour supply means that the company cannot continue its provision of services to a sufficient degree. In the event of temporary layoff, the employer must follow the general rules on the selection circle and selection criteria. Foreign employees, who are affected by the entry restriction, will not automatically be covered by a possible layoff in the company in question.
3. The right to prohibit outward journey
The employer can in principle make unilateral decisions of significance to the employment relationship within the framework of the right to manage. This means that the employer has a right to organize, lead, control and distribute the work in the company.
The extent to which the employer can prohibit an employee from leaving the country must be determined through an interpretation, first and foremost of the employment contract. Normally, the employer's ability to limit the employee's right to decide over his or her free time will be limited. The pandemic and the strict entry restrictions will be a relevant factor in interpreting the employment contract.
An employee who deliberately puts himself in a situation that means that he cannot fulfil the employment contract according to its content will be in breach the employment contract. It may provide grounds for termination, dismissal or other labour law reactions. Neither will the employee entitled to pay or other remuneration.
There are many nuances here. It is important to discuss how you as an employer can facilitate that the employee can fulfil his / her employment contract according to its content. It can e.g., be conceivable situations where the employee lacks a place to live during his / her time-off period, because he or she would normally have returned home.
4. Duty of remuneration and support schemes
Employees who do not perform work in accordance with an employment contract will in principle not be entitled to pay or other remuneration. This means that foreign workers who choose to leave the country, despite the existing entry restrictions, must bear the risk of a possible loss of pay / other remuneration upon departure.
Loss of salary as a result of such trips abroad will not in itself give any rights to compensation under public support schemes.
The employer and employee should decide whether it would be appropriate to make use of the affected employee's holiday period during the period the entry restriction applies, so that any loss of income does not become unnecessarily large.
5. Basis for termination?
The temporary entry restriction does not in itself provide grounds for termination of employees who are prevented from returning to work as a result of the entry restrictions.
6. Tax and social security effects
For many companies, it may be relevant to allow employees to perform work tasks from their home office abroad, as a result of the entry restriction. However, it is worth noting that this could trigger legal tax- and social security effects in the country where the work is carried out.
Norway has entered into tax agreements with a number of states, which, among other things, aim to prevent double taxation. In principle, an employee will only be liable to tax in the labour state, i.e., the country where the home office is actually located, when he or she stays there for more than 183 days during a twelve-month period. The tax authorities in the labour state may nevertheless be entitled to information about the employment relationship, which may, among other things, entail an obligation to file a tax return to the labour state's tax authorities.
Extensive use of home offices in other tax jurisdictions may also have consequences for employers. This, among other things, in the form of requirements for wage reporting and advance deductions to the labour state. The A-report shall in principle also contain information on salaries and other cash benefits for work performed abroad. As a general rule, the employer must also calculate the employer's national insurance contribution on these benefits.
In principle, long-term use of a home office abroad can also mean that, in the tax law sense, a permanent place of business is considered to have been established in the labour state.
Extensive use of home offices can also have social security consequences. An employee who performs work in two or more EU / EEA countries will, as a general rule, be covered by the country of residence's social security legislation if the employee performs a significant part of the work there (25 per cent or more of total working hours or remuneration). This will imply that social security- and employer contributions must be paid to the labour state.