From 30 June 2022, new amendments to the Employment Protection Act ("EPA") are proposed to enter into force and to be applied from 1 October 2022. In general, the underlying purpose of the reform is to increase flexibility for employers and allow better opportunities to adapt skills to their needs of the business.
Regarding the status of the proposed amendments, the government is currently working on consultation responses. The Swedish Government Official Report (SOU: 2020:30) has been circulated for referrals and on 27 January 2022, it was submitted to the Swedish Council on Legislation for review (lagrådsremiss). However, no government bill has yet been issued. According to the Ministry of Employment (Arbetsmarknadsdepartementet), such government bill is planned to be submitted to the Swedish Parliament during spring 2022. Therefore, it shall be noted that the aforementioned dates and below proposed amendments only are of preliminary nature and may be changed.
The proposed amendments to the EPA are significant. Therefore, we have only highlighted the most important amendments below in brief.
"Objective grounds” will be replaced with “objective reasons”
According the current EPA, the employer must have objective grounds (saklig grund) in order to terminate an employee. Based on the new proposal, in order to make it more predictable for both employers and employees, the grounds for termination of an employment will be clarified by replacing objective grounds with objective reasons, a term which is intended to signal a shift from past labor practice where the focus was on the prediction of the employee's chances to meet the employer's expectations going forward (e.g. learning to show up on time), rather than the wrongdoing as such, i.e. not showing up on time. Going forward, the labor parties will also be able to further define what constitutes "objective reasons" in the collective bargaining agreements.
Full-time employment as a main rule
Unless otherwise agreed, full-time employment will be the main rule. Employees shall have the right to a written explanation if an employment does not cover full-time employment.
No continuation of work during a dispute
Currently, an employee has the right to remain employed and receive ordinary salary and employment benefits during a dispute. This is mainly relevant to terminations due to personal reasons but also in cases of "fictitious" redundancy or when the employer, in cases of redundancy, has failed to exhaust the possibilities to redeploy the employee to a vacant role. However, based on one of the new amendments, this will change, i.e. there will no longer be possible to claim reinstatement during the court process. The employee's employment will end at the end of the notice period even if a dispute has arisen regarding the validity of the dismissal and the employer will be released from the current obligation to pay salary during a dispute. This change would decrease the employer's total potential exposure, and as such is likely to have an impact on employer's willingness to proceed with unilateral termination.
Additional exemptions to the current “priority rules”
According to the current rules stated in the EPA regarding redundancy, the employer may exempt two employees from the priority rating list (which is based on the first-in-last-out principle) should the employer have at most 10 employees. The new amendments would give the employer possibility to exempt three employees, regardless of the number of employees at the employer. In addition, companies bound by collective bargaining agreement would have an extended right to exclude up to 15 % of the number of employees that are at risk of being terminated due to redundancy.
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