The Labour Court confirms that employment may be terminated without applying the Employment Protection Act where the employee lacks a required work permit

Author: Karolina Lie

In a recent judgment, the Swedish Labour Court held that an employer was entitled to terminate an employment relationship without applying the Swedish Employment Protection Act (LAS) because the employee lacked the work permit required to work in Sweden. As the employment was contrary to law and exposed both the employer and the employee to sanctions, the employer should have ended it immediately upon learning of the lack of a permit. The employee was therefore not entitled to damages under the Employment Protection Act.

 In AD 2026 No. 52, the Swedish Labour Court considered whether an employer could terminate employment without complying with the Swedish Employment Protection Act (LAS) when the employee did not have the work permit required to work in Sweden. The employee, an Afghan citizen with permanent residence in Greece, had been employed by a restaurant business. He argued that his Greek residence status allowed him to work in Sweden for periods of three months at a time. The Court found, however, that the rules permitting certain short stays in Sweden concern the right of residence and do not create an exemption from the separate requirement to hold a Swedish work permit.

The Court found it established that the employee lacked a work permit when the employer terminated the employment. The employment therefore conflicted with mandatory law. The Court stated that where an employment relationship has definitively become contrary to statutory requirements, the employer may, at least where the employee cannot lawfully be used in the employer’s operations, terminate the employment without applying LAS.

The employer risked a statutory penalty charge for employing a person without the required permit, while representatives of the employer and the employee also risked criminal liability. The Court therefore held that the employer should have ended the employment immediately upon learning that the employee lacked the required permit. The employer had not breached LAS and was not liable for economic or general damages.

The Court also held that the employer was entitled to rely on the lack of a work permit even though that circumstance had not been stated as a reason for termination under LAS. Since LAS did not govern the termination of the employment in this situation, its rules and related principles could not prevent the employer from invoking the statutory impediment.

The Court still nevertheless the lower court’s conclusions regarding outstanding salary, holiday pay and damages under the Swedish Annual Leave Act. The judgment therefore illustrates that terminating an unlawful employment relationship without applying LAS does not remove the employer’s obligation to settle remuneration and other entitlements already earned during the employment.

 

Key Action Points for Human Resources and In-House Counsel

Employers should verify employees’ right to work before employment begins and monitor time-limited permits. If a required permit is missing, the employer should promptly assess whether the employment has definitively become contrary to law and whether it must be terminated without applying LAS. Any accrued salary, holiday pay and other earned entitlements must still be identified and settled.