The current coronavirus crisis puts a lot of companies under pressure and many struggle to keep costs down in times with no or very limited demand. Despite the Swedish government’s recent and various schemes to facilitate short term reductions of working hours/salaries, many companies will be forced to make some of its staff redundant. This is not always a quick process, particularly not since Sweden is heavily unionized. In order to avoid prolonging the redundancy process even further, we have created a brief checklist/outline that will help you as an employer to avoid some common pitfalls. The below presupposes that the company is not subject to any collective agreement, in which case the process would be slightly different, and that the affected employees are permanently employed (which is standard).
- If more than five employees are being made redundant, the Swedish Public Employment Service (sw. Arbetsförmedlingen) needs to be notified or the company may be penalized. The minimum notice period is two months before the first employee’s employment is effectively terminated (i.e. expiry of the notice period).
- If any of the affected employees is a member of a trade union, the company must consult with that trade union and any other relevant trade union, before the employees are given notice of dismissal. The trade union(s) is entitled to claim damages for any failure of the company to comply with this provision, amounting to the company’s benefit of not consulting the union(s) in a timely manner.
- The employer shall invite the trade unions to consult. In the invitation, the company shall provide a list of all employees at the work site (ranked in seniority (length of service)) and mark the employees affected by the redundancy. The company may also have to provide a report on alternative open employment position and work environment effects.
- At the consultation, the employer must explain the reason for the redundancy and report how the redundancy will affect the work environment and the remaining employees. Please note that the trade unions and the employer does not have to agree on the measures and redundancy dismissals. The consultations can be completed in disagreement and the terminations carried through by the company at risk of being sued by the trade unions/employees.
- As a general rule, employees are dismissed based in order of priority/seniority in Sweden, “last in, first out”. This cuts across all departments and roles, although not between work sites. In order for an employee to claim another, more junior, employee’s position, he or she will need to have adequate qualifications for that position. This essentially means the basic skillset to do the job after a reasonable training period.
- Once it has been established which employees that can be given notice and the consultations have been completed, the employer may serve notice on the employees. The notice must be made in writing and follow certain form. If not done correctly, the company may be liable for damages and certain limitation periods will be extended.
- There are no statutory redundancy payments under Swedish law so the employees are only entitled to their notice periods, which range from 1 – 6 months.
- Employees who have worked at least 12 months, are entitled to reemployment within a period of 9 months from the expiry of the notice period if the company decides to hire new staff.
This is just a simple checklist/outline of the redundancy proceedings in Sweden, but should hopefully save you some time in planning for the worst. If you need more information, please don’t hesitate to contact our employment law expert, Mikael Nelson, head of Corporate Commercial.