LEGALINK CROSS-BORDER LAYOFFS QUESTIONNAIRE

A COUNTRY BY COUNTRY SUMMARY OF APPLICABLE EMPLOYMENT LAWS

SEARCH QUESTIONNAIRES

PREPARED BY

Michael Cohen

Clemens Wallen Östlund Advokater AB

114 46 Stockholm, 114 35 Stockholm
Tel: + 46 8 678 40 00
Fax: + 46 8 678 35 00

Learn more about the Legalink Questionnaire

SWEDEN

Are there any laws that govern a layoff of employees? If so, what do the laws require?

The Swedish Employment Protection Act (1982:80) applies to both public and private employees (with only a few exceptions). The Act covers all employers that have a business enterprise in Sweden. Layoff of employees is also governed by the Act and, to some extent, the Employment (Co-determination in the Workplace) Act (1976:580).

According to the Swedish Employment Protection Act, notice of termination by the employer must be based on “objective grounds.” A reduction in force due to economic reasons is considered to be an objective ground. However, if objective grounds for notice of termination do not exist, then it is considered reasonable to require the employer to provide other work in his service for the employee.

Are there any formal requirements for terminating an employee or groups of employees?

Notice of termination by the employer must be given in writing and be delivered to an employee personally. Before deciding on termination of employment on the grounds of layoffs, the employer is normally obliged to enter into negotiations with the relevant local organization of employees.

Are there special legal requirements for a layoff caused by redundancy in the workforce?

No.

Are there employment laws that laid-off employees can use to challenge their inclusion in the layoff?

A laid-off employee may use the Swedish Employment Protection Act to challenge a notice of termination. Although Swedish antidiscrimination laws are available, they are seldom used to challenge a notice of termination.

What sanctions or penalties may be imposed against employers for violating any of the requirements mentioned in No’s 1-4 above?

If a notice of termination is given without objective grounds, the notice can be declared invalid by a court upon application by the employee. An employer who violates the Act is liable for damages for losses suffered by the employee as well as wages and other employment benefits. The damages may be based on compensation for losses sustained and for the violation of the Act. The damages are in principle determined according to the employee’s total period of employment with the employer and may not exceed the following amounts: 16 months’ pay for less than five years of employment; 24 months’ pay for at least five years but less than ten years of employment; and 32 months’ pay for ten or more years of employment. Violations of some of the requirements may also entail an obligation for the employer to pay damages to the employees’ organization. Where reasonable, damages may be reduced, in whole or in part.

What are one or two most common mistakes that employers make that lead to liability for a layoff?

Not applicable.

What other employment issues are likely to arise from a layoff in your jurisdiction that you have not addressed in your answers to the previous questions?

In connection with termination of employment caused by shortage of work the employer must consider an order of priority. The order of termination for those employees who are affected is determined on the basis of each employee’s total length of employment with the employer. Employees who have been employed for the longest have priority over employees with shorter employment times. In the event of equal length of employment, priority is given to the older employee. An employer with at most ten employees may exempt at most two employees who, in the opinion of the employer, are of particular importance for future activities. Employees whose employments have been terminated due to shortage of work may also have rights of priority for re-employment in the business where they were previously employed.