Revision of contract on severance pay in connection with redundancy
Supreme Court judgment 13 November 2020, HR-2020-2202-A, (case no. 19-148926SIV-HRET), civil case, appeal against judgment.
St1 Norge AS (Counsel Øyvind Carelius Svendsen) v. Eivind Ytterland and others (Counsel Kyrre Eggen)
Justices: Indreberg, Falkanger, Noer, Ringnes, Steinsvik
Seven older employees in a company that had been transferred to a new owner after a demerger, had accepted an offer to leave in return for severance pay. Their former employer had established a system that allowed early retirement pension instead of severance pay for employees who left, which would be more financially beneficial to the individual employee. After having examined the written documentation provided, the Supreme Court found that the early retirement arrangement was not a legal right for the employees, but a voluntary, individual benefit from the company. Although the new owner had committed itself to following the established redundancy system for a period of two years after the take-over, this did not give the employees a right for early retirement pension. Nor had it been substantiated that the employees had been given an oral guarantee that the early retirement arrangement would continue. There was no reason for revising the existing contracts on severance pay under section 36 of the Contracts Act. The Supreme Court found in favour of the employer.