Sweden: A Modernised Swedish Employment Law
In June 2020 a new bill with proposed changes for the Swedish Employment Protection Act (1982:80) (“EPA”) was presented by a committee. The committee had been commissioned by the Swedish government to present a proposal on how the Swedish employment law can be modernised and adapted to today’s labour market, while still maintaining a balance between the employers and employees. Below we have listed the highlights of the proposed changes of the EPA. It is noted that at this stage this is only proposed amendments to the EPA, and they can still be amended and are subject to the government’s approval. Most of the proposed changes are partly optional, i.e. it is possible to deviate from the regulation via collective agreements. The bill is proposed to enter into force on 1 January 2022. MORE will continue to monitor the development. If you have any questions related to employment law, please contact Martin Orehag (firstname.lastname@example.org) or Caroline Hartung (email@example.com).
Proposed changes to the rules of order of priority in the event of termination
When an employer needs to terminate employment contracts due to redundancy, it must respect the priority rules in article 22 of the EPA. Article 22 in the EPA states that the employees with longer period of employment have priority to continued employment over employees with shorter periods of employment (the so-called “last in – first out” principle). Today, companies with less than ten employees have the right to make exemption of two employees from the priority list, i.e. if these two persons have shorter employment time, they can be excluded from the priority list. The committee now proposed that all companies, regardless of the size, should be able to exclude five employees from the priority list.
Lower and more predictable costs for the employer in case of termination
If an employee – after having its employment contract terminated - claims that the termination shall be void, the employee has under the current rules the right to retain the employment with full salary and benefits until a verdict is presented in the dispute. As a dispute can take several months up to a year, this can cause high costs for the employer. The new bill proposes that in case of termination due to redundancy the termination should apply immediately, irrespective of if the employee has claimed that the termination shall be void. It is also proposed that it should not at all be possible to declare a termination void when the employer has less than 15 employees. Instead the committee proposes that the levels of damages, in the event of an unfair dismissal, should amount to at least 8 months’ salary.
Employers responsibility for the employee’s knowledge development
The committee proposes that employers should be legally obliged to, to a reasonable extent, offer knowledge development to the employees. This is proposed to apply for both employees with permanent employments and for employees with fixed-term employments. If the employer does not fulfil its obligations of knowledge development for the employees, the employer should – in relation to the employee - be liable for potential damages. According to the bill, the employer should also inform the employee and trade unions about the knowledge development that the employer has offered the employees. Balance between employees with different employment forms. General fixed-term employees shall have the right to re-employment after nine months employment term during a three-years period, instead of after a 12-month employment term as the rules prescribe today. Once the employee has qualified for re-employment, it shall also have the right to re-employment to available positions as permanent employments.
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