Employee Termination and Layoffs

Notice of termination by the employer must be given in writing. In the notice of termination, the employer must state the procedure to be followed by the employee in the event the employee wishes to claim that the notice of termination is invalid or to claim damages as a consequence of the termination. Such notice shall also state whether or not the employee has rights of priority concerning re-employment.

Information shall also be included in the notice, where applicable, that notification is required in order for the employee to exercise such rights.

Notice of termination must be delivered to an employee personally. Where this cannot reasonably be required, notice may instead be posted by registered letter to the employee’s last known address. Notice of termination shall be deemed effective when received by the employee. Where the employee cannot be reached and notice of termination has been dispatched by letter as described above, notice of termination shall be deemed effective 10 days after the letter was submitted to the post office for delivery. If the employee is on holiday, notice of termination shall be deemed effective not earlier than the day after the holiday ends.

The employer is obligated, upon request by the employee, to state the circumstances on which notice of termination is based. This statement must be in writing, where the employee so requests.

Period of Notice of Termination

The minimum period of notice for both employer and employee shall be one month. The employee is entitled to notice of termination of employment of:

• Two months, if the aggregate length of the employment with the employer is at least two but less than four years,
• Three months, if the aggregate length of the employment with the employer is at least four but less than six years
• Four months, if the aggregate length of the employment with the employer is at least six but less than eight years;
• Five months, if the aggregate length of the employment with the employer is at least eight but less than ten years;
• Six months, if the aggregate length of the employment with the employer is at least ten years.

Act on Security of Employment

The main rule is that employment is until further notice, i.e. what is normally called permanent employment. Employment for a limited period may be admissible in specially specified cases, such as seasonal employment, substitute jobs for a certain period, probationary employment and so on. Employment for a limited period may also be admissible in order to cover peaks in the workload, though for a maximum of six months during a two-year period.

Old age pensioners may also be employed for a limited period, as may young people just before they are to perform their military service. If such reasons do not exist, the employment for a limited period may be for a maximum of twelve months (18 months in newly established companies). Moreover, there is now the form of employment called agreed employment for a specified period.
For this form of employment the employer does not need to have any reason for the employment for a limited period. The employer has the right to employ a maximum of five employees on such agreed employment for a specified period.

The same employee may be employed using this form of employment for a maximum of twelve (or for newly established companies a maximum of 18) months over a three year period. As regards substitute posts, it can be mentioned that in the year 2000 a rule came into force that means that an employee who has been employed as a substitute by the same employer for more than three years in the past five year period will automatically become permanently employed.

Employment Protection Act

During the period following notice of termination, an employee who has been given notice is entitled to retain pay and other employment benefits during the period of notice, notwithstanding that the employee is not assigned any duties or is assigned duties different from those the employee previously performed.

Where the employer has stated that the employee need not be available for work following notice of termination or need only work for part of the period of notice any income earned by the employee from other employment during the same period may be deducted by the employer from benefits payable. The employer is also entitled to deduct income that the employee obviously could have earned from other suitable employment during this period.

An employee who has been given notice of termination may not be transferred to another locality during the period of notice, if the employee’s opportunities of seeking new employment are thereby impaired to an extent that is not insignificant. An employee who has received notice of termination is also entitled, during the period of notice, to reasonable leave of absence from the employment with full employment benefits in order to visit an employment agency or otherwise seek work.

The Promotion of Employment Act

The Act on Certain Employment Promoting Measures was primarily created to give older and disabled people the possibility of getting and keeping a job. In addition, the Act gives the trade union certain opportunities to influence companies’ personnel policy.

Notice of cutbacks in operations

The employer is obliged to notify the County Labor Board of cutbacks in operations that will affect at least five employees. The County Labor Board shall be notified:

• At least two months before a cutback in operations that affects at least 25 employees,
• At least four months before a cutback in operations that affects more than 25 but no more than 100 employees,
• At least six months before a cutback in operations that affects more than 100 employees.

If it is a matter of lay-offs, the County Labor Board is to be notified at least one month in advance. An alternative to notifying the County Labor Board as above is that the employer informs the County Labor Board that he has required negotiations with the trade union in accordance with the Act on Co-determination at Work. Certain formalities are required.

Older and Disabled Employees

The County Labor Board has the right to require information concerning the size and composition of the labor force (including as regards older and disabled people) – and to require that the employer sets up consultations with the County Labor Board and the trade union if the County Labor Board so requires.

This may apply to consultations on measures to improve working conditions, secure continued employment or promote new recruitment of older and disabled people.

Legal Disclaimer

The information provided on this page is based on information published by the Swedish government and is not intended to substitute for professional legal council.