Sweden: Interpretation on the safeguarding of employees’ rights in the event of transfer of undertakings

Following a transfer of undertakings, the transferred employees had rights to extended periods of notice under collective bargaining agreements, which were applicable after the transfer to their new employer. However, the right to have an extended notice period required ten years of service for the current employer. The employees’ trade union claimed that the service period with the transferor should be included when determining the notice period, which the employer opposed. Following a preliminary ruling from the Court of Justice of the European Union, the Swedish Labour Court ruled that the calculation of notice periods should not include time of service with the transferor. The Court found that the wording of the collective bargaining agreement expressly stated that only service for the current employer was to be considered. Thus, since the agreement had expired and had been renegotiated, the current employer could not be interpreted as to also include service with the transferor.