New Supreme Court judgment on particularly independent positions

Flexible working hours and significant professional responsibility are not, in themselves, sufficient to exempt employees from the rules on overtime pay. In a recent judgment, the Norwegian Supreme Court clarified the requirements for qualifying as holding a “particularly independent position” (særlig uavhengig stilling) under the Norwegian Working Environment Act. The judgment serves as an important reminder to employers to ensure that employees’ position classifications reflect their actual working arrangements.

Flexibility does not equal independence

Under Section 10-12, subsection 2, of the Norwegian Working Environment Act, the working time provisions in Chapter 10 generally do not apply to employees holding particularly independent positions. However, this exemption is applied restrictively.

The case before the Supreme Court concerned a project manager employed by a construction company, with responsibility for, among other things, project progress, finances and the coordination of construction projects. The employee had considerable freedom to organise his work tasks, but was also subject to project deadlines and other constraints that limited his ability to control his own working hours.

In contrast to both the District Court and the Court of Appeal, the Supreme Court concluded that the position did not qualify as particularly independent. Although the project manager could prioritise tasks and decide how the work was to be carried out, he had limited control over his workload and was not free to decide when the work was to be performed.

The Supreme Court emphasised that there must be a “clear and obvious” degree of independence. The key question is whether the employee has considerable freedom to determine both the volume of work and when it is to be carried out. The assessment must be based on the specific circumstances of each case and take into account all relevant constraints, including requirements and deadlines imposed by clients and other external parties.

The judgment makes clear that a job title, professional autonomy and flexible working hours are not, in themselves, sufficient to satisfy the conditions for exemption.

What should employers be aware of?

The judgment provides employers with a reason to review which employees have been classified as holding particularly independent positions. This is particularly relevant for project managers, consultants, advisers and other employees with significant responsibilities, whose working days may nevertheless be governed by external requirements and deadlines. We recommend that employers pay particular attention to the following:

Review position classifications

It is the employee’s actual working arrangements that are decisive, not the job title or the wording of the employment contract. Referring to a position as “particularly independent” is not sufficient if the actual circumstances do not meet the statutory requirements.

Assess the employee’s control over their workload

Can the employee independently prioritise, delegate and allocate their tasks, or are they, in practice, required to carry out the work assigned to them within specified deadlines?

Examine the actual freedom to determine working hours

Even if the employer does not monitor when the employee arrives at work, meetings, client requirements, operational needs and project deadlines may restrict the employee’s ability to decide when the work is performed.

Ensure accurate recording and payment of working hours

If the conditions for exemption are not met, the ordinary working time provisions apply. Among other things, the employer must ensure that working hours are recorded and that statutory overtime pay is provided.

It is also important to review employment contracts in which overtime compensation is included in the fixed salary. For employees who are not exempt from the working time provisions, such arrangements must not result in the employee receiving less than the amount required by law.

Under Section 10-6, subsection 11, of the Norwegian Working Environment Act, overtime work must, as a general rule, be compensated with an additional payment of at least 40 per cent. An agreement providing for fixed overtime compensation must therefore be structured so that it clearly specifies the amounts attributable to ordinary salary and overtime pay, and ensures compliance with the statutory minimum requirements.

Employers should also document the basis for the classification and monitor any changes in the actual content of the position over time. A position that previously allowed considerable freedom to manage one's workload may gradually become subject to constraints that limit the employee's actual independence.

Incorrect classification may have financial consequences

If an employee has been incorrectly classified as holding a particularly independent position, the employer may, among other things, face claims for back payment of overtime. In certain circumstances, questions of personal liability for damages may also arise.

The Supreme Court's judgment is therefore an important reminder that the exemption must be assessed based on how the work is actually performed. Employers should not rely on job titles or standard wording in employment contracts, but must examine whether employees genuinely enjoy the degree of freedom required by law.