Sweden: 2023, Looking ahead
In 2023, Looking ahead, we explore the most important trends and developments related to labour and employment law in Sweden.
Right to remain employed until age 69
As of 1 January 2023, employees are entitled to remain in employment until they are 69 years old. When an employee turns 69, the provisions in the Swedish Employment Protection Act (Sw. lag (1982:80) om anställningsskydd) regarding termination of employment are replaced with provisions that simplifies the termination process.
Reduction in taxes for employees over age 65
On 1 January 2023, new tax reductions were introduced for persons aged 65 and above to promote work above the age of 65.
A new Whistleblowing Act to be implemented during 2023
On 17 December 2021, a new Whistleblowing Act entered into force. The new act imposes, inter alia, obligations on businesses with 50 or more employees to implement internal procedures and routines for reporting irregularities in the business as well as for following-up on such reports. These internal procedures and routines must be documented and implemented by private employers with 50-249 employees no later than 17 December 2023.
Changes to the predominant pension scheme for white-collar employees
On 1 January 2023, changes to the collectively agreed pension plan ITP1 entered into force. ITP1 is the predominant pension scheme for white-collar employees of employers that are bound by collective bargaining agreements. The age limit for old-age pension under ITP1 is raised from age 65 to age 66. Further, when calculating the pension contributions paid by the employer, any salary above SEK 185,750 per month will not be considered.
Changes to the Employment Protection Act
2022 saw extensive changes to the Employment Protection Act. As Sweden implemented the EU Directive on Transparent and Predictable Working Conditions on 29 June 2022, employers will need to be aware of the changes concerning new information requirements to new employees and new rules entailing that employers may not prohibit employees from having parallel employments.
Apart from the changes that follows from the EU Directive, additional changes were made to the Employment Protection Act. For example, special fixed term employments are automatically converted to indefinite term employments after twelve months employment during a five year-period, all employers may exempt three employees from the order of priority in redundancy situations, and the regulations regarding disputes in case of termination of employment have changed. The latter change entails that an employee’s employment will expire following a termination, or dismissal, regardless of whether an invalidity claim has been brought forward by the employee or not.
Employment post COVID-19
As 2023 begins, the restrictions due to the COVID-19 pandemic have largely been lifted. Since the outbreak of the pandemic in early 2020, working from home has become a frequent occurrence on the Swedish labour market and will likely remain common. Going forward, employers should consider whether insurance policies cover employees working from home. Furthermore, employers should be aware of their responsibility to provide a safe and healthy work environment for employees working from home.
As regards COVID-19 and work environment, the Swedish Labour Court recently ruled that a company was able to summarily dismiss an employee for their failure to comply with a workplace requirement to wear a face mask. The ruling clarifies that an employer has the right to determine what equipment an employee needs to use in their work, and that an employee may only neglect to follow the employers’ restrictions in certain cases, for example if compliance with the requirement would entail a threat to the employee’s life or health. The ruling also clarifies that in most cases, an employer is entitled to enforce a requirement for employees to wear face masks to prevent the spread of COVID-19.
Proposed changes to the Work Environment Act
In August 2022, a Swedish Government Official Report was completed concerning a potential expansion of the employer’s responsibility for the work environment, extended possibilities for the Swedish Work Environment Authority to issue regulations on sanction fees, and clarifications in the Work Environment Act (Sw. arbetsmiljölag (1977:1160)) to increase the use of occupational health care in the preventative work environment management. The expansion of the employer’s responsibility for the work environment is mainly intended to regulate the work environment in the gig economy. Since the report was handed over by the special investigator, a general election and a subsequent change of government has taken place. Whether the proposed legislation will be implemented is therefore unclear at the moment.