Sweden: First Verdict Concerning Objective Reasons for Termination Due to Personal Reason Since the 2022 Reform of Swedish Labour Law

Author: Malin Dunér

On 9 October 2024, the Swedish Labour Court issued a ruling concerning termination due to personal reasons. The case concerned a telemarketer who was terminated due to personal reasons, including poor performance and refusal of order. The employer claimed that the employee refused to comply with instructions regarding how the work should be carried out and that he clearly underperformed by, for a long period, not attaining his monthly sales budget. The Court concluded that the termination was based on objective reasons.

The parties of the dispute were bound to the Main Agreement on skills development, transition and employment protection (Sw. Huvudavtal om trygghet, omställning och anställningsskydd) entered into by the labour market parties Swedish Federation of Enterprise (Sw. Svenskt Näringsliv) and PTK – the council for negotiation and cooperation. The Main Agreement provides a detailed application of the provisions on objective reasons for termination as stipulated in the Swedish Employment Protection Act, and when the Main Agreement is applicable, its provisions shall apply instead of the corresponding provisions in the Employment Protection Act.

For poor performance to constitute as objective reasons for termination, the Main Agreement stipulates that, inter alia, it is required that the performance clearly falls below what an employer could normally have expected and/or taken into account with regards to the employee’s statement in connection with the conclusion of the employment. Such underperformance should not be temporary, and the stipulated performance requirements should not be unjustified.

For misconduct as refusal to work and refusal of order, the starting point in the Main Agreement is, inter alia, that objective reasons for termination exist if the employee has been warned that the employment is at risk and has been given a reasonable period of consideration to comply with the employer’s instructions. It is not required that the employee’s refusal is due to a general unwillingness to follow the employer’s instructions. The decisive factor is whether there is a refusal to obey orders, to follow instructions or the equivalent, which in itself constitutes a breach of the obligations arising from the employment agreement. It should also normally be disregarded if the employee has a long period of employment without previous misconduct.

In the case at hand, the telemarketer had a provision in his employment agreement stipulating that “the work task is to draft a monthly budget and conduct at least 250 dialling attempts.” The employee did not attain his monthly sales budget one single time during April 2022 to April 2023. For the same period, he made significantly fewer dialling attempts than 250, with 90 at the lowest and 181 at the highest. During said twelve-month period, the employee was repeatedly urged by the employer to conduct more dialling attempts. He was also given a written warning in October 2022 where he was reminded about his obligations stipulated in the employment agreement and he was warned that a repeated misconduct could lead to termination. A new written warning was issued in March 2023 as his dialling attempts had deteriorated.

The Court began by examining whether the termination was based on objective reason due to the employee’s refusal to comply with the employer’s orders and instructions. The Court concluded that the employee was an experienced telemarketer and had incurred the obligation to do at least 250 dialling attempts per months if needed to attain the monthly sales budget. By not attaining his sales budget for a year, and making significantly fewer dialling attempts than required, the employee was deemed to be in breach of his employment agreement. The employer had several times explicitly urged and instructed the employee to comply with his employment agreement and to make more dialling attempts, and had also issued the employee several written warnings. As the employee, even after a reasonable period of consideration, still failed to comply with his employment agreement and the employee’s instructions, and the trade union had not presented any valid reasons for the employee’s non-compliance, the Court found that there were objective reasons for termination in accordance with the Main Agreement.

Key Action Points for Human Resources and In-House Counsel

Make sure to document properly and be very detailed and specific as regards instructions, requirements and objectives in, e.g., a performance improvement plan and, where possible, formulate such elements in a measurable way.