Changes in the law could not justify changes in the pension plan

Employees in a manufacturing company received 5 % pension contributions under a local agreement when their salary rate was between 1 and 7G.

However, legal changes in 2022 guaranteed pension contributions for all employees. This required the company to pay a minimum of 2 % pension contributions from a salary rate at 0G. To adjust, the company one-sidedly reduced its pension contributions under the local agreement from 5 % to 4.3 %.

The Norwegian Labour Court found that the change breached the local agreement. Legal changes could not justify changes to the company’s commitments. As a result, the company needed to reinstate the pension scheme. It also needed to reimburse the employees for the three years the reduced rate had been in force.

IUNO’s opinion

Legal developments and rising costs can make it tempting for companies to have a second look at their total compensation packages. However, material changes will always need to be introduced carefully. Otherwise, it can trigger compensation claims.

IUNO recommends that companies consider all potential aspects when negotiating local agreements as well as individual terms. Once terms such as pension are regulated in an agreement, companies lose most of the flexibility to change the terms later. 

[The Labour Court’s decision of 12 February 2025 in case 24/7]