Fixed term employment changes and the Employment Protection Act

We have previously reported that the Swedish government received criticism from the EU Commissioner in Spring 2010, regarding its regulation of fixed term employment in the Employment Protection Act. To address these criticisms, amendments were made to the Employment Protection Act in June 2012, enabling employees to seek judicial declaration where they believe their contracts should have become of indefinite duration but the employer has sought to avoid this through successive fixed term contracts.

Despite these revisions to Swedish legislation, the EU Commissioner remained unhappy that it continued to fall short of the requirements of the EU Directive. As a result, the Swedish Government has proposed new, supplementary provision concerning fixed term employment. Under this proposed regulation, the circumstances in which fixed term employment becomes indefinite term will be extended. Accordingly, general fixed term employment will automatically become of indefinite term if, in aggregated, the contracts exceed two years in duration. This will not be limited to contracts within a five year period, as at present, but will arise whenever fixed term contracts under the Employment Protection Act have succeeded one another without interruption or at intervals of at most 180 days. The links in such a chain of fixed term employment contracts can include general fixed term employment, temporary substitute employment and seasonal employment, but it is only the aggregate time spent in general fixed-term employment which is relevant to whether a position is transformed into indefinite-term employment. Exceptions will be made for workers over the age of 67.

Under the proposal, the legislative amendments will come into force on 1 May 2016.

New case law clarifies time frame in relation to summary dismissal

According to the Swedish Employment Protection Act, circumstances of summary dismissal are limited to those circumstances of which the employer was aware in the two months preceding dismissal.

The Labour Court has now ruled that, in situations when the employer cannot immediately determine whether the employee’s conduct is grounds for summary dismissal, the two month period starts to run from the point at which the employer has investigated the employee’s actions and surrounding circumstances.

Frequently, employers engage the services of external investigators to assess grounds for summary dismissal. In that event, the employer is deemed to hold the same knowledge as the external investigator at any given time.