OUTLINE
Notice periods in Sweden
Termination of employment in Sweden
Post-termination restrictions in Sweden
Waivers in Sweden
Transfer of undertaking in Sweden
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End of employment in Sweden
There are a number of different reasons an employment relationship might come to an end: the employee might quit or retire, or they might be dismissed or made redundant. Whatever the situation, every country has certain rules and regulations that apply to the end of employment — and Sweden is no exception.
In this section, we’ll discuss the different ways to legally dismiss an employee in Sweden, as well as the required notice periods for both employees and employers. We’ll also talk about the post-termination restraints you can legally place on employees in Sweden, and employees’ rights after a transfer of undertaking
Notice periods in Sweden
Both employers and employees in Sweden need to give notice when they want to end their employment contract. The specific terms are usually outlined in the employee’s collective bargaining agreement and/or employment contract.
Notice periods in Sweden for employers
To dismiss an employee in Sweden, employers usually have to give notice. The length of the required notice period in Sweden is set by collective agreement and depends on how long the employee has worked for their employee. Employees who have been given notice must continue to work as normal during their notice period, and their employer must pay them for their work. Even if the employer has no work to assign the employee, they must still be paid.
For employees without a collective agreement in Sweden the standard notice period is as follows:
- Less than two years of employment: 1 month
- 2–4 years of employment: 2 months
- 4–6 years of employment: 3 months
- 6–8 years of employment: 4 months
- 8–10 years of employment: 5 months
- 10+ years of employment: 6 months
Notice period for resignation in Sweden
When an employee wants to leave their position, they also have to give notice to allow their employer time to find a replacement. Under the Employment Protection Act, the standard notice period in Sweden for employees is one month. An employer and an employee can contractually agree on a longer notice period, and collective agreements may also stipulate a longer period based on the employee’s age and length of service. However, this typically can’t be more than three months, or it may be considered unfair contract terms.
When an employee resigns (gives notice) in Sweden, their resignation is generally binding, and the employer has no obligation to give the job back if they change their mind. However, there are two exceptions to this. The first is when an employee has resigned hastily and then quickly changes their mind, for example after sleeping on the decision. The second is when the employer can be deemed to have coerced or provoked the employee to resign.
Notice period during probation in Sweden
It’s common in Sweden for employment contracts to include a probationary period, during which both parties can end the contract with limited notice. Employers can generally dismiss an employee during their probationary period with two weeks’ notice, though collective bargaining agreements and individual employment contracts may provide different terms.
Severance pay in Sweden
Severance pay is not mandatory in Sweden. However, it may be required if it’s stated in a collective agreement or an employment contract.
Termination of employment in Sweden
The process of termination of employment in Sweden varies depending on the individual employment contract and the collective agreement that applies. However, the Employment Protection Act provides minimum standards that employers must abide by.
Generally speaking, there are two processes for the termination of employment in Sweden; termination with notice and summary dismissal. Both of these require the employer to have objective grounds for dismissal, but they are otherwise quite different. We’ll discuss both of them below.
Termination with notice in Sweden
To terminate an employee with notice in Sweden, an employer must give the employee the appropriate notice in accordance with their collective agreement and employment contract. This often depends on how long the employee has been employed.
The employer also needs to have objective grounds for the dismissal. These can be either:
- Shortage of work: This is a reason related to the business, which means the employee is no longer needed. This could be because of a reduction in operations, or organisational restructuring, for example.
- Personal grounds: These are things related to the employee themselves, and may include misconduct, unauthorised absences, or serious difficulties working with others.
Summary dismissal
Summary dismissal is dismissal without notice. In Sweden, it’s only possible when the employee has committed a serious breach of their obligations. Grounds for summary dismissal might include gross misconduct, repeated refusal to work, or repeated or prolonged absences without a valid reason. The cause for the dismissal must have occurred within two months of the time when the employee is dismissed.
Possibility of redeployment
Before dismissing an employee with notice, employers in Sweden must first investigate the possibility of redeploying them in an alternative role. Where possible, the new job should be equivalent to the old one, but it does not have to come with the same employment conditions (including pay). Employers don’t have this obligation in the case of summary dismissal.
Negotiations with trade unions
Employers are also required to negotiate and consult with trade unions before terminating employment in Sweden. The exact rules differ depending on the type of dismissal:
- Dismissal with notice (shortage of work): Employers must invite all unions concerned to negotiate before dismissing employees on the basis of a shortage of work (redundancy).
- Dismissal with notice (personal grounds): Employers must inform the employee and notify the union to which they belong at least two weeks in advance. If the union requests a consultation, the termination must be put on hold until this is complete.
- Summary dismissal: Employers must give the employee’s trade union at least one week’s notice of the dismissal, and the union has one week to request a consultation. If they do, the dismissal must be put on hold until the end of the consultation.
Post-termination restrictions in Sweden
Post-termination restraints (or post-termination restrictions) are restrictions that employers can impose on their employees after they have stopped working for them. In Sweden, there are no specific statutory rules prohibiting post-termination restraints. However, they must be reasonable in order to be enforceable, meaning they can’t unreasonably limit the employee’s ability to make a living. Collective bargaining agreements may provide their own rules for post-termination restrictions, though these could still be deemed unreasonable by a Swedish court. The main types of post-termination restrictions that could be possible in Sweden are:
- Non-compete agreements
- Customer non-solicit agreements
- Employee non-solicit agreements
Non-compete agreements in Sweden
Non-compete agreements prevent employees from working for or setting up a business that competes with their former employer. These are typically only valid for a certain period after the end of the employment contract.
In Sweden, there is no specific maximum duration for a non-compete agreement, as long as it can be objectively justified. In practice, the standard period is nine months. Longer periods of up to 18 months may be permissible in some circumstances.
In order for a non-compete agreement to be valid, the employee must be compensated during the period when it applies. However, the compensation doesn’t need to exceed 60% of their former salary. Non-compete agreements are also only permissible when they can be objectively justified. That means they are typically only used for employees in key management positions or with access to important trade secrets.
Customer non-solicits in Sweden
Customer non-solicit agreements prohibit employees from contacting or poaching customers from their former employer. Again, these are typically only enforceable if the restrictive period is reasonable. If a court finds a customer non-solicit agreement to be unreasonably strict, they can adjust it.
Employee non-solicits in Sweden
Employee non-solicit agreements prevent employees from contacting or poaching employees from their former employer. These are permissible in Sweden, subject to some limitations. According to Swedish case law, the restricted period for an employee non-solicit agreement (or non-solicitation clause) should not be longer than six months.
Waivers in Sweden
In some circumstances, employees in Sweden may waive some of their statutory rights under the Employment Protection Act or other relevant legislation. This is usually in the context of a settlement agreement, wherein the employee waives their rights in exchange for a lump sum from their (former) employer.
Transfer of undertaking in Sweden
A transfer of undertaking is when one entity acquires all or part of another one. In Sweden, there are strict rules on what happens to the employees of a transferred entity.
Employee protections after a transfer of undertaking in Sweden
When an entity is purchased by or otherwise transferred to another entity, the employees of the original entity must be transferred with it. A transfer of undertaking is not a reasonable ground for dismissing an employee, though employees can theoretically be dismissed for economic, organisational, or technical reasons brought about by the transfer.
If an employee doesn’t want to be transferred to the purchasing entity, they can oppose the transfer and remain employed by their original employer. If there is no company left (because it has been sold to the purchasing entity in its entirety), the employee is made redundant.
Following a transfer of undertaking, collective bargaining agreements also continue to apply to transferred employees. The new employer is obligated to apply any terms and conditions set out in the collective agreement for at least one year after the transfer date.
Consulting and informing unions in the case of a transfer of undertaking
Before a transfer of undertaking can happen in Sweden, both the purchased and the purchasing entity must call for and conduct consultations with any relevant trade unions. These consultations must be initiated and concluded before any decision is made regarding the transfer.
Avoid risk and missed opportunities with our end-to-end employment solutions
There are many different ways an employment contract can come to an end. But whatever the situation, you need to understand the rules that cover the end of employment in Sweden — or you could end up facing legal issues.
Our solutions ensure your business is protected from risk when a relationship with a worker comes to an end — whatever the reason. We can also help you to avoid missed opportunities by re-deploying talent where possible .
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