In September 2011, the Swedish Government set up a Commission to review the rules regarding unfair dismissal and the costs involved. The Commission has now concluded its review and proposed three changes;

  1. employment should cease after one year if a dispute is on-going (currently, employment continues throughout the whole period of dispute regardless of period);  
  2. the current financial damages available for unlawful dismissals should be reduced; and
  3. it should be harder for employees to obtain a court declaration that the dismissal itself is null and void.

The new rules are proposed to come into force on 1 January 2014. 

In addition, the Swedish government has suggested introducing a new law for staffing agencies in order to implement the Agency Workers Directive, EC directive 2008/104/EC. The new rules will apply to employees engaged by a staffing agency with the purpose of being hired by customer companies and working under the customer companies' control and supervision. The premise of the Directive is that agency workers should receive the same basic terms and conditions as if they were employed directly by the customer company. The new rules are expected to be implemented with effect from 1 January 2013.

Finally, in order to avoid abuse of fixed term employment arrangements, the Swedish government has suggested amendments of the existing regulation.  As a result,  consecutive periods of fixed term employment which in aggregate exceed two years will automatically convert an indefinite term.