international employment law firm alliance L&E Global

Sweden: Court ruling on which entity may be responsible for a wrongful termination and possible damages

An employee was employed by a limited liability company but started receiving salary payments from a sole proprietorship owned by a representative of the company. The employee brought an action for damages against the sole proprietorship upon the termination of the employment. The District Court found that the action for damages should have been brought against the limited liability company. However, the Swedish Labour Court found that the responsibilities as the employer may be shared without a transfer of employment occurring. The Court found that the employee had justified reasons to perceive the sole proprietorship as his/her employer, since the salary payments were made by the sole proprietorship and it being stated as the employer in a certificate of employment. Thus, the Court ruled that the case should be reopened in the District Court.