Emp Update Sweden 0908

26 August 2008

Sanna Berg


Medical certificate from the first day of sickness


According to the Swedish Sick Pay Act (1991:1047) an employee is entitled to receive sick pay from the employer from day 2 to day 14 of the sickness period, provided that the employee’s working capacity is reduced due to the sickness. From the seventh day of the sickness period the employer is only obliged to pay sick pay to the employee if the employee can confirm the reduction of their working capacity with a medical certificate, issued by a dentist or a doctor.

Until 1 July 2008, a request to the employee to provide such certificate earlier than the seventh day of the sickness period could only be made, if special reasons existed, by the Swedish Social Insurance Agency (on its own initiative or if requested by the employer). According to the preparatory work of the Act, special reasons include frequent absence of the employee, or the employee requiring medical care due to drug addiction.

New legislation

According section 10a of the Swedish Sick Pay Act, which entered into force on 1 July 2008, an employer may, if special reasons exist, request that the employee provides a medical certificate from the first day of the sickness period. The certificate shall be issued by a dentist or a doctor and shall include a statement regarding the reduction of the employee’s working capacity. The certificate does not however need to contain any information regarding the sickness. The request by the employer must be in writing. If the employee, without acceptable reason, neglects to provide such requested certificate, the employer is not obliged to pay sick pay to the employee for the part of the sickness period for which the employee has not provided a certificate. The provision is applicable for sickness periods starting on or after 1 July 2008, when the act entered into force.

Effect on employers

One intention behind giving the employer the right to request that the employee provides a medical certificate from the first day of the sickness period is to prevent abuse of the sick pay system. Another reason is to discover potential rehabilitation possibilities at an earlier stage, which will hopefully reduce the employers’ costs for sick pay and social security charges.

Case law

Replacement of recruitment agency did not constitute transfer of business

Background /Facts

SCA Timber AB (“SCA”) is the owner and operator of the sawmill Tunadal, located in the town of Sundsvall in the north of Sweden. Since 1993 SCA have had their forklift operations contracted out externally. In August 2004, Toyota Material Handling Sweden AB (“TMH”) was hired as a contractor for the forklift operations. According to the tender agreement between SCA and TMH, TMH would be allowed to engage as a subcontractor, Sundsvalls Hamn AB (“Sundsvalls Hamn”), for the staffing of the forklifts. However, TMH would be responsible for putting the forklifts at SCA’s disposal and provide for the management and maintenance of the forklifts.

In 2005, Sundsvalls Hamn terminated the agreement with TMH with effect as of December 2005. During June 2005, Sundsvalls Hamn gave notice of termination to all of the forklift drivers with six months notice period. In connection with this, TMH hired another recruitment agency, Proffice, to take over some of the responsibility for the forklift operations.

Proffice employed 10 of the forklift drivers of the former 23 employees at Sundsvalls Hamn. Proffice also employed 13 other forklift drivers. Neither Proffice nor TMH applied the provisions regarding transfer of business in the Swedish Employment Protection Act (1982:80).

Relevant legislation

According to Section 6b of the Swedish Employment Protection Act, the rights and obligations pursuant to contracts of employment and employment relationships that exist at the time of a transfer of an undertaking, a business, or a part of a business from one employer to another employer shall be transferred to the new employer. The provision concerned is the implementation of Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses.

The ruling of the Labour Court

The Labour Court stated that the application of the criteria established by the European Court of Justice does not lead to the conclusion that the general situation where a recruitment agency provides staff to work together with the staff in the hiring company, constitutes a transfer of business. In such situation, the leased staff work under the same conditions as the hiring company’s own employees.

However, as in the present case, if the hiring company chooses to hire all of the staff for a certain assignment, the same prerequisites shall be applied in this situation. The crucial criterion according to the Labour Court is whether the recruitment agency has the obligation to pursue a business and offer its services with regard to other services than solely providing temporary staff. If the obligations of the recruitment agency exceed providing staff, the assessment is dependant on the specific obligations that the recruitment agency has in relation to the hiring company. If the commitment goes further than just to provide staff, and includes responsibility for the result of the operations of the leased staff, it could in some cases constitute a transfer of business. According to the Labour Court, this can also apply when the recruitment agency is replaced by another recruitment agency, which puts the staff at the hiring company’s disposal for the same assignments.

According to the Labour Court, TMH’s only obligation towards SCA was to ensure the operation of the forklifts and to place the forklifts at SCA’s disposal, while Proffice’s obligation only was to put the forklift staff at TMH’s disposal, meaning that TMH was in charge of staff management. Proffice was therefore not regarded as TMH’s subcontractor with responsibility for the forklift operations; it was only providing temporary staff. According to the Labour Court, this fact does not preclude the circumstances constituting a transfer of business. However, in order to be regarded as a transfer of business it would have required, among other things, that parts of the administration function of Sundsvalls Hamn had been transferred to Proffice. Thus, the Labour Court came to the conclusion that it was not a question of transfer of an ongoing economic unit (“going concern”) from Sundsvalls Hamn to Proffice.

Labour Court delivered decision 11 June 2008 (intermediate judgement No 51/08 in cases A 73/06 and A 173/06)