international employment law firm alliance L&E Global

Sweden: Legislative changes to the Swedish Employment Protection Act applicable

Author: Karolina Sundqvist

As informed in the monthly update in June 2022, there have been legislative changes to the Employment Protection Act. The changes are applicable for all employers as of 1 October 2022.

When assessing whether to terminate an employee due to personal reasons, the employer no longer needs to consider the employee’s personal situation or interest in retaining the employment, nor do a forecast of the risk that the employee will repeat their behavior. As concerns dismissal due to redundancy, all employers are now entitled to exempt three employees when determining the order of priority for dismissal in a redundancy situation. In the event of a dispute regarding the validity of a termination, employers must no longer bear the risk of continued payments of the employee’s salary and benefits during the legal proceedings. Only if the court declares the termination invalid, the employer will be liable to retroactively pay the salary and benefits that the employee would have been entitled to during the legal proceedings as well as additional damages.

Further, general fixed-term employment has been replaced with special fixed-term employment. The special fixed-term employment will automatically transfer into an indefinite employment after twelve months of fixed-term employment. In addition, an order of priority has been introduced for situations where an employer intends to reassign an employee to a position with fewer working hours, which entails that employees with a longer aggregated period of employment should be last to be reassigned.

Temporary agency workers assigned to the same company for at least 24 months during a 36 months-period, are now entitled to be offered either a permanent employment at the company or a financial compensation equivalent to two monthly salaries.

Key Action Points for Human Resources and In-house Counsel

Legislative changes to the Swedish Employment Protection Act entails, inter alia, that all employers may exempt three employees from the order of priority and that general fixed-term employments will transfer into indefinite employments after twelve months instead of after two years.