In a comprehensive overhaul, Sweden’s Employment Protection Act, a fundamental pillar of Swedish Employment Law governing employee termination and protections, is undergoing significant changes. Here’s what employers need to know and do, and what comes next.
Termination Reasons: Previously, employers needed “objective grounds” for termination, covering personal reasons like misconduct and business changes such as redundancies. Now, “objective grounds” are replaced with “objective reasons,” particularly impacting personal reasons. The reform aims for more predictable assessments of terminations for personal reasons.
Redundancy and Last-in-First-Out: Employers have significant freedom to terminate for business-related reasons. The reform allows employers to exempt three employees from last-in-first-out rules, regardless of organizational size, if they’re deemed crucial for future activities. However, an exemption cannot be made again within three months.
Disputes Over Termination: Under the new rules, employment terminates at the end of the notice period despite disputes. Employees can no longer claim reinstatement during court proceedings. Punitive damages for unlawful dismissal have increased.
Priority for Reduced Working Hours: The reform mandates priority rules for reduced working hours, ensuring employees with less seniority receive fewer hours during reorganization. Accepting reduced hours entitles an employee to a transition period.
Special Fixed-Term Employment: “Special fixed-term employment” is introduced, entitling employees to indefinite term employment after 12 months under certain conditions.
Full-Time Work Presumption: Employments are presumed full-time unless agreed otherwise. Employers must provide reasons if full-time work isn’t possible.
Agency Workers: New rules require offering indefinite term employment to agency workers engaged for at least 24 months within 36 months.
What’s Next: The rules came into force on June 30, 2022, applying from October 1, 2022. Specific rules apply for fixed-term employment and dispute resolutions. Employers must also comply with new information requirements effective June 29, 2022, necessitating amendments to employment contracts.
Employers should:
- Investigate collective bargaining agreements’ special rules.
- Ensure current procedures align with the law.
- Review rules on special fixed-term and agency workers.
- Establish processes for coordination and information sharing within legal entities, if exemptions from priority orders were used recently.
LRAC stands ready to offer specialized guidance tailored to individual circumstances, facilitating informed decision-making amidst regulatory flux.
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