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Terminations in Sweden: A Guide for Overseas Employers

Similar to most European countries, Sweden does not have an ‘at will’ employment policy, and all terminations will need to follow statutory requirements.  The Employment Protection Act details all notice and termination rules, applicable to any non-managerial employee.  This guide will cover the allowed justifications for termination and the notice process to both the employee and their union.

On what grounds can employers terminate an employee in Sweden?

In general, an employee can only be dismissed for justifiable reasons, either on the employer side or related to the employee’s conduct.  Terminations that don’t meet the standards in the Act will be considered invalid, and damage may be awarded equal to two to three years’ salary. 

For those reasons, employers new to Sweden will want to consider the rules carefully and engage professional counsel before initiating a termination.  Here are the categories of justifiable termination:

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Terminations due to redundancy

If an employer needs to reduce staff due to slow business growth or a shift in services, then an employee can be terminated due to redundancy.  There is a specific procedure for redundancy, including first terminating employees with the shortest length of service.  This is the’ last-in, first-out’ policy to prioritize long term employees.

Employers are also required to try to find a vacant position for the employee, and re-hire them before a new employee if a position becomes open.  Notice periods for termination due to redundancy range from one to six months, depending on any collective bargaining agreements in the industry.

Terminations due to personal reasons

Employees may be terminated due to their own behavior such as crimes against the employer or colleagues, disloyalty or regular absenteeism.  Prior to termination, the employee must be given a chance to correct their behavior once made aware of it.

If the employee fails to meet the employer’s expectation of improvement, the termination process can begin.  Two weeks prior to giving the employee formal notice of termination, the employer must inform the employee and their union of the plan to terminate.  This gives the employee and their union a chance to assess the grounds for the pending termination, prior to formal notice.

Summary dismissals

An employee may be dismissed summarily only for a serious breach of the employment agreement, such as crimes against the employer, and assault or theft against a colleague.  There is no obligation to give the employee a second chance, and only a one week notice to the employee and union is required prior to termination.

What is the required termination notice period in Sweden?

The minimum termination notice period is one month, but that increases after two years of service.  An extra month of notice is required for each additional two years of service.  So, 2-4 years of service = 2 months, 4-6 years of service = three months, etc.  Collective bargaining agreements may have longer notice periods.

Client Case: Can employers extend the termination notice period for their Swedish employees?

Context: Our client with employees in Sweden wanted to know if they could increase the termination notice period from 30 days to 60 days.

Solution: We let them know there was no restriction in Sweden on increasing termination notice periods beyond the statutory minimum.

Do you need more information about Sweden?

If you are new to hiring in Sweden, you might have other questions such as:

Can the notice period salary be paid in lieu to the employee?

Is the informal notice to the employee of a pending termination enough for them to file a claim for unjust termination?

If an employer cannot justify the termination, are they required to re-hire the employee in addition to paying damages?

These types of questions arise for our clients frequently, and we assist them in complying with all termination, notice and procedural regulations in foreign markets.  We make international employment simple.

 

 

 

 

 

 

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Looking to hire an employee in Sweden? Get in touch.

 

The information in this article is subject to changes in local legislation.

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