Employment Update, Sweden - October 2007

09 October 2007

Magnus Berterud, Maria Olsson


New amendments to the National Insurance Act as of 1 July 2007


Until 1 July 2007, an employer was obliged under the National Insurance Act to initiate a rehabilitation investigation if i) an employee had been absent due to sickness for more than four consecutive weeks, ii) the work of an employee was frequently interrupted by shorter sickness periods, or iii) the employee required such investigation. The rehabilitation investigation was to be submitted to the social insurance agency within a specified time frame.

New legislation

The new legislation means that an employer is no longer obliged to initiate and perform a rehabilitation investigation; this obligation has been transferred to the social insurance agency (“SIA”). However, employers do still have an obligation, after consultation with the employee, to provide the SIA with the information necessary in order for the SIA to elucidate the specific needs for rehabilitation. The employer is obliged to cooperate with the SIA in this regard.

Effect on employers

In contrast to the former position employers no longer automatically have to send specific information to the SIA within a certain time frame. However, the SIA may choose to make a request for specific information from the employer and the employee. It should be emphasised that the obligation for the employer to take measures necessary in order to secure an effective rehabilitation for the employee remains unchanged.

Case law

Engagement of Agency Workers - not in conflict with the statutory priority right to re-employment

A company gave notice of termination based on objective grounds (shortage of work) to a number of employees, a few of whom had a priority right to re-employment. During the period in which the priority right was in force, the company chose instead to satisfy their temporary need for workers by using staff from an employment agency. All three workers engaged from the employment agency were former employees of the employer. However, only one of them would have been entitled to the assignment if the employer had followed the priority rules. The question for the Labour Court was whether the company had circumvented the former employees’ priority right to re-employment.

In its ruling, the court confirmed that a decision to fill its need for workers by using staff from an employment agency during a period in which former employees had a statutory right to re-employment was in general not in conflict with the priority rules. However, that would not be so if the circumstances in the individual case were shown to be improper. The court ruled that it was not suggested that the company’s purpose for using the services of the employment agency was to avoid the priority rules or that the company had acted in an improper way.