Sweden: The Swedish Labour Court Rules on Taxi Drivers’ Employment Status
Author: Karolina Sundqvist
In a recent ruling, the Swedish Labour Court concluded that two taxi drivers were entitled to overtime compensation for work the taxi company claimed was performed as employees of a temporary work agency. The company´s failure to pay overtime compensation and vacation allowance therefore constituted a violation of the applicable collective bargaining agreement.
The dispute concerned a taxi company and whether two taxi drivers, M.K. and A.Z., were employed by the company while undertaking additional work beyond their full-time roles, or if they performed this work as employees of a temporary work agency contracted by the company. The temporary work agency and the company share the same representatives and are registered at the same address. The trade union alleged that the company violated the applicable collective bargaining agreement by not paying overtime compensation and vacation allowance for the additional work. The employer contested this, asserting that the work was performed as employees of the temporary work agency, and alternatively arguing that overtime was not worked in the manner alleged by the trade union.
The Labour Court examined whether M.K. and A.Z. were employed by the temporary work agency. Initially, the Court noted that no explicit employment contract was presented. Even though salaries were paid by the temporary work agency, circumstances such as the drivers perceiving themselves to be working for the company, performing tasks only within the company´s assignments, the company and the agency sharing the same address and ownership, and the work being conducted using the company´s vehicles, clothing, and equipment, carried greater weight, according to the Court. The Court concluded that it was not proven that M.K. and A.Z. were employed by the temporary work agency during the performance of the work in question.
Finally, the Labour Court assessed the right to overtime compensation. The Court determined that the agency´s pay slips reflected the actual hours worked, and that this work was performed within the employment with the company. Based on the records and testimonies, the Court found that the “extra shifts” constituted overtime work beyond the regular 40 hours per week, which was ordered or approved by the company. Therefore, M.K. and A.Z. were entitled to overtime compensation for the claimed number of hours, except for one month where the evidence was deemed insufficient. Since M.K.´s employment had ended, he was also entitled to vacation allowance.
By failing to pay overtime compensation and vacation allowance, the company breached the collective bargaining agreement. Consequently, the company also had to pay general damages to the two drivers and to the trade union.
Key Action Points for Human Resources and In-House Counsel
Employers cannot avoid obligations under collective bargaining agreements through unsubstantiated employment arrangements with temporary work agencies.
