Amendments to Sweden’s Employment Protection Act From 1 October

From 1 October, the majority of amendments in Sweden’s new Employment Protection Act will be effective, to provide greater employment security for employees.

One key change to be aware of is the extension of an employer’s obligation to inform employees about their employment conditions, including contract duration, details of any probation period, and place of work. Most of this information should be given to employees no later than a week after their start date.

There are changes to the rules on fixed-term employment and agency workers, too. From October, fixed-term employment will become permanent after the employee has been employed for twelve months within a five-year period (it was previously a two-year period). Certain employees whose fixed-term contracts are not being renewed might also be entitled to priority treatment when applying for alternative positions. Under the new law, employers are required to offer permanent contracts to eligible agency workers or to pay them compensation to avoid creating an employment situation.

From 1 October, in a redundancy situation, employers must document a priority list to assess seniority of employment, and the principle of ‘last in, first out’ applies. Employers can also exclude three employees from these priority rules, regardless of the size of the business, in certain circumstances.

Finally, damages for unfair termination and dismissal have increased significantly to almost double previous levels. As of 1 October, damages for unfair termination are approx. SEK 135,000 (approx. £11,000) and for unfair dismissal, approx. SEK 190,000 (approx. £15,500).

We recommend that employers review the changes under the new Act, and review and update their contracts and policies as needed for compliance. Please get in touch if you would like further advice on the changes.

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