Employment Update, Sweden - June 2007

28 June 2007

Magnus Berterud

New legislation

New amendments to the Employment Protection Act as of 1 July 2007

The Swedish government has recently introduced a bill (2006/07:111) on amendments to, inter alia, the Employment Protection Act. The majority of the amendments are due to come into force on 1 July 2007 (thus replacing the resolution which was passed last spring (under the former government), which was due to come into force on the same date). The key changes are as follows:

  • Pre-Agreed Fixed Term Employment contracts will be permissible where up to a period of two years. Where an employee has worked under such a fixed term contract for, in aggregate, more than two years during the last five years, that employee will then automatically be deemed to be working on an indefinite basis.

  • Where a temporary substitute employee has completed an aggregate employment period of two years during the last five years, such employee will be deemed to be working on an indefinite basis thereafter. It should be observed that this amendment is due to come into force on 1 January 2008. Until that date the current legislation applies (which sets the relevant period at three years during the last five years).

  • The current legislation which allows persons over the age of 45 to claim up to 60 months of additional employment (on the basis that one month of additional employment can be claimed for each month of employment commenced after reaching the age of 45) is annulled.

  • The current legislation on enhanced damages in cases of wrongful dismissal (applicable to employees over the age of 59) is annulled.

  • The current legislation regarding priority for re-employment remains unchanged. Therefore, employees who are made redundant but who have worked for a total of twelve months during the last three years, will be given priority in the event of re-employment opportunities arising. The priority period remains unchanged at nine months following the termination.

  • Seasonal employment will continue to be a permitted form of fixed term employment.

Case update

Ethnic Discrimination - employer not bound by an unauthorised written statement by its employees

A man of Iranian origin applied via e-mail for a job as a reporter at a Swedish production company. A few days later he received an e-mail response rejecting his application, the response stated that the company was looking for employees with a good command of the Swedish language and that his application had contained too many spelling mistakes. The e-mail response was signed by an employee of the company but the e-mail signature also included the company name.

The Swedish Ombudsman against ethnic discrimination brought a claim for damages against the company, referring to the Act on Measures to Counteract Ethnic Discrimination in Working life (1999:130). This Act prohibits employers from directly or indirectly, discriminating against a job applicant on grounds of ethnic origin.

Having established that the employee who wrote the e-mail response, did so acting on her own, and acting beyond the instructions she had received (without the knowledge of the other representatives of the company), the Labour Court established that the company was not legally responsible for the employee’s actions. The Ombudsman’s claim was rejected.

The Vaxholm case – the Advocate-General agrees with the union

On the 23 May 2007 the Advocate-General made a statement in the Vaxholm case. The main issue before the European Court of Justice (ECJ) was whether Swedish trade unions have a right to take industrial action to compel non-Swedish EU companies (carrying out temporary work in Sweden), to enter into Swedish collective bargaining agreements on the same terms as Swedish employers.

The Advocate-General stated that the EU-legislation would not prevent such industrial actions provided that they are justified by a general interest, for example, the protection of employees’ rights and the prevention of “social dumping”. The Advocate-General also stated that any industrial actions must be proportionate. It is an issue for the Swedish Labour Court to ascertain whether the actions taken in this case were acceptable or not.

The final judgment from the ECJ is expected later this year. The Advocate-General’s statement is not binding on the ECJ. However, in most cases the final judgment will be in line with the Advocate-General’s statement.