Sweden: Developments in the modernization of the Swedish Employment Protection Legislation
Earlier this year, a committee that had been commissioned by the Swedish government presented a bill with proposals on changes in the Swedish Employment Protection Act (1982:80) (“EPA”) that would make the Swedish employment law modernized and adapted to today’s labour market. The proposed bill was debated even before it was presented, and the bill has after it was released received major criticism for taking away important rights of employees. One criticism has been that the balance between the parties on the labour market will be disturbed in the advantage of employers and that the proposals in the bill only covered a limited part of the regulations and therefore only partial concern the problems on the labor market. As an alternative to the bill presented by the committee, several trade unions and employer organizations have been negotiating an agreement that would cover the whole private employment market in Sweden. The parties to the agreement have been hoping that the parties would resolve the issues on the labour market themselves, without any interference from the legislators. The parties presented their agreement to the Swedish government on the 4 December 2020.
The agreement that the trade unions and employer organizations presented were described as a broad, balanced and long-awaited labor market reform. The agreement contains for example proposed changes for reorientation support, the employment form general fixed term, the priority rules and legal cause for termination, to mention a few. In short, some of the proposals are:
The parties propose that an employee that has worked for an employer for at least 8 years will be given the opportunity to educate oneself within its profession or to a new profession and keep 80 percent of their salary for one year. The proposal will be giving more people the financial conditions to study and an opportunity for competence development during an ongoing employment.
The employment form general fixed term
The parties propose that the employment form general fixed term will be abolished and replaced by something called special fixed-term employment, meaning that when it previously took 24 months to convert the employment to a permanent employment it will instead take 12 months of employment to receive a secure employment.
The priority rules
Today, an employer with a maximum of 10 employees can exclude 2 employees from the list of priority and thereby exclude these two employees in order to “save” their employments. The parties propose that all employers, regardless of the number of employees, can exclude a minimum of 3 employees from the list of priority, depending on what kind of employees the employer have and how many places of business the company is divided into.
Legal cause for termination
In order to terminate an employee in Sweden the employer must have a legal cause. The parties propose that the term “legal cause” will be replaced with the term “legal reasons”. The basis for a termination of an employee will be the same, the change consists in that the employer that wants to terminate an employee on the basis of personal reasons only has to reassign the employee once before a termination can occur and that the employee’s interest in keeping the employment and the prognosis for the employee to repeat the negligence in the future will no longer be part of the assessment for legal reasons. The parties also propose a clarification and adjustment of what is considered as lack of performance, cooperation difficulties or negligence.
The Swedish government has previously made a statement that the government wants the content of the parties’ agreement to be used as a basis for legislation changes in the Swedish employment law instead of the bill presented by the committee. MORE will continue to monitor the development. If you have any questions related to employment law, please contact Martin Orehag (email@example.com) or Felicia Lakso (firstname.lastname@example.org).