Sweden: Fixed term employment “for as long as the assignment lasts” was deemed compatible with EU- and Swedish labour law

Authors: Elsa Jönsson

A member of the Swedish Municipal Workers’ Union was in 2008 employed by an assistance company “for a fixed term for as long as the assignment lasts” (“SLUV”), a form of fixed term employment regulated in the applicable collective bargaining agreement. The union claimed the SLUV to be incompatible with the Swedish Employment Protection Act (the “EPA”) as well as with the EU Directive on fixed term work (the “EU Directive”). According to the union, the employment was to be deemed a fixed term employment which, pursuant to the at this time applicable provisions in the EPA, had become a permanent employment two years after the commencement date. The main question in the case was whether the collective bargaining agreement was incompatible with the EPA and the EU Directive.

The Labour Court stated that the provisions on fixed term employment in the EPA are semi-dispositive, meaning that the parties to a collective bargaining agreement may agree on deviating provisions. The purpose is to achieve a regulation which is adapted to the varying conditions of the labour market.

Notwithstanding the above, if the regulation regarding SLUV entailed an unacceptable erosion of the employees’ statutory rights, the collective bargaining agreement was to be considered a breach of the fundaments of the EPA and, consequently, invalid in relevant parts. The Court stated that the SLUV resulted in fixed term employments being permitted for needs that was not temporary but constant, employments which the legislator hade wanted to prevent by introducing a time limit for fixed term employments. Nevertheless, the Court found that the regulation on SLUV constituted such an adaption to the varying conditions of the labour market that the legislator had wanted to enable. Further, the Court concluded that the relevant provision in the EU Directive was not applicable, as this provision referred to repeated fixed term employments while the employment in question had continued without interruption since 2008.

To summarise, the Court found that regulation on SLUV in the collective bargaining agreement did not constitute a breach of either the EPA or the EU Directive. As such, the regulation was not invalid, and the employment had not converted into a permanent employment.

Key Action Points for Human Resources and In-house Counsel

When provided for in a collective bargaining agreement, it may be possible to enter into an agreement regarding a fixed term employment that lasts until the completion of the assignment.