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Advice and Tips

Travel expenses

Written by Tekna’s Legal Department Modified: Feb. 27 2021

An employer’s management rights don’t include the right to force their employees to pay out of pocket for major travel expenses.

Read the statement from Borgarting Court of Appeal about the case involving employees at the Royal Norwegian Ministry of Foreign Affairs (UD):

The Royal Norwegian Ministry of Foreign Affairs (UD) cannot force its employees to pay out of pocket for major travel expenses.

The Norwegian Civil Service Union (NTL) filed a lawsuit against the central government on behalf of several employees at the Norwegian Royal Ministry of Foreign Affairs (UD) after it changed its travel policy.

Until 1 March 2015, employees ordered their own plane tickets through the Ministry’s travel bureau, the costs of which were billed directly to the Ministry. Employees normally paid for other forms of transport and hotel expenses as well.

The Ministry then decided that starting on 1 March 2015, employees would have to book their own plane tickets, hotels and rental cars. Further, the Ministry would no longer be billed directly for these costs; and even if the it might under certain circumstances cover these costs for an individual employee, this employee would still be personally responsible to the travel service provider for making sure they were paid.

Legal basis?

The Court of Appeal stated that an order from an employer to assume personal responsibility toward a third party for expenses related to plane tickets and hotels in connection with business travel had to have a legal basis. In other words the question in this case was if there was any legal basis for issuing this order.

No basis in employment contract or collective bargaining agreement

The Court of Appeal rules that the order found in the travel policy had no basis in either the employment contract or collective bargaining agreement. The contract contained no express provisions stating how agreements with travel service providers should be made. Further, no basis was found in the agreements for interpreting this kind of employee obligation. The reason for this was complicated:

  • The Ministry’s plan wasn’t a necessary consequence of the employees’ obligation to travel for business
  • Other government agencies used other plans where the employee was billed directly for employee business travel
  • The scope of the business travel and the fact that it involved major travel expenses

Protecting employee rights spoke against interpreting an obligation for the individual employee to enter into personal agreements with a third party with a financial obligation (as was the case here).

No legal basis in the employer’s management rights

Because the disputed order fell outside of the legal frameworks for what employees can be ordered to do pursuant to an employment contract and collective bargaining agreement, the order had no legal basis in the employer’s management rights. On the contrary, these rights must be practiced within the legal frameworks laid out by the employment contract/collective bargaining agreement.

The Court of Appeal clearly stated that changes in the travel policy caused not only a change in administrative procedures but also an order to individual employees.

Referring to case law, it was stated that determining the legal frameworks for the employment relationship had to among other things be seen in relation to societal developments. So ordering an employee to enter into a contract with a third party with respect to paying for hotels and plane tickets when traveling for business was viewed by the court as being neither reasonable nor natural when seen in light of societal developments.

Major expenses

One important point was that these expenses could involve large amounts of money (for example in cases where employees had to do a great deal of business travel). Further, even if employees were allowed to ask for their travel expenses to be covered in advance, thereby somewhat relieving their financial burden, the plan still required employees to pay their travel expenses in advance. And this payment included a mix of private resources and employer money.

Based on the above factors, the Court of Appeal concluded that the order in the Ministry’s travel policy was unlawful.

Please note that the Court of Appeal specified that its decision was limited to expenses associated with plane tickets and hotels, and not other «minor» expenses such as those for meals and taxis. This point most likely has a connection with the fact that the large expense amount was an important factor in the case.