Sweden: The Supreme Administrative Court Ruled on the Entitlement to Unemployment Benefits for an Applicant Who Resigned from Her Employment Due to Health Reasons

Author: Elsa Jönsson

An employee (“AA“) worked as a saleswoman for a car company. From February 2018, AA was on sick leave and received sickness benefits from the Swedish Social Insurance Agency. The employer conducted a reassignment investigation in February 2019 and concluded that there were no positions within the company that AA could be reassigned to. In November 2019, the Social Insurance Agency decided that AA was no longer entitled to sickness benefits. As AA could neither receive sickness benefits nor return to work, she resigned from her employment. AA then applied for unemployment benefits from her unemployment fund.

Pursuant to the Swedish Unemployment Insurance Act (the “Act”), applicants who have left their employment without valid reasons shall be suspended from the entitlement to unemployment benefits for 45 days. The Swedish Unemployment Insurance Ordinance states that a valid reason for leaving an employment is that an applicant, due to health reasons, cannot return either to its ordinary work or to other work with the employer. The health reasons must be supported by a medical certificate issued before the employment terminates.

According to AA’s unemployment fund, there had been no valid reason for AA to leave her employment, and AA was, therefore, suspended from the right to unemployment benefits for 45 days. The unemployment fund referred to case law and preparatory works and concluded that it was not clear from AA’s medical certificate that the health problems were caused by her work with the employer or that AA had been advised by a doctor to leave her employment. The unemployment fund’s decision was appealed by AA and became subject to the Supreme Administrative Court’s (the “Court”) ruling.

The Court stated that the assessment of what constitutes a valid reason for resigning from employment pursuant to the Act shall be made restrictively. However, the Court found that, contrary to the unemployment fund, there are no constitutional grounds to require an applicant to have been advised by a doctor to leave their employment or for the health reasons to have been caused by the employment. Nor does it appear from preparatory work that the legislator intended to impose any such requirements. According to the Court, it was, therefore, sufficient that the requirements of the Unemployment Insurance Ordinance were met. As the Court concluded that it had been shown that AA could not return either to her ordinary work or to other work with the employer, as well as that her health reasons had been substantiated by a medical certificate issued before her employment terminated, there had been a valid reason for AA to resign from her employment and the prerequisites for suspending her from unemployment benefits had not been fulfilled.

Key Action Points for Human Resources and In-House Counsel

Termination of an employee with a reduced ability to work due to illness requires that the reduction in work capacity is permanently so substantial that the employee is unable to perform work of any importance to the employer. The employer has a far-reaching obligation to facilitate the employee’s return to work through rehabilitation, adaptation, and reassignment measures.