A Q&A guide to labour and employee benefits law in Sweden.
The Q&A gives a high level overview of the key practical issues including: permissions to work; contractual and implied terms of employment; minimum wages; restrictions on working time; illness and injury; rights of parents and carers; data protection; discrimination and harassment; dismissals; redundancies; taxation; employer and parent company liability; employee representation and consultation; consequence of business transfers; pensions; intellectual property; restraint of trade agreements and proposals for reform.
For a full list of recommended employment lawyers and law firms in Sweden, see PLC Which lawyer?
To compare answers across multiple jurisdictions, visit the Labour and Employee Benefits Country Q&A tool. The Q&A is part of the PLC multi-jurisdictional guide to labour and employee benefits law. For a full list of jurisdictional Q&As visit www.practicallaw.com/labour-mjg.
Foreign nationals working in your jurisdiction?
Nationals of your jurisdiction working abroad?
Foreign nationals working in Sweden are protected by the principal employment and labour laws in Sweden. The employer's obligation to ensure that posted workers are guaranteed a certain level of protection is based on Directive 96/71/EC concerning the posting of workers (Posted Workers Directive). The rules apply to all posted workers, regardless of nationality. Posted workers are guaranteed a minimum level of employment protection under the Foreign Posting of Employees Act 1999:678. The Act lists the provisions in Swedish employment legislation that apply to posted workers.
The Posted Workers Directive applies. Further, Swedish employment law applies to nationals working abroad if they are employed by a Swedish legal entity.
Managing directors must be at least 18 years old.
The normal retirement age is 65 years, but employees can choose to continue to work until the age of 67.
The following must be resident in the European Economic Area (EEA):
The founders.
The managing director.
At least half of the board members.
At least half of the deputy members of the board.
At least one of the persons that holds special signatory power.
Managing directors cannot have been declared bankrupt or have an injunction levied against them prohibiting them from carrying on a business.
There is financial support for employers who employ people with disabilities impairing their ability to work. Further, in certain cases when employing persons with a non-Swedish education or persons under the age of 26, employers benefit from reductions to social security charges. There are also incentives for employers that employ persons who have been unemployed for a year or more.
Procedure for obtaining approval. Employees from certain countries outside the EU are required to obtain a visa prior to entering Sweden, while employees from other countries outside the EU only need a visa if they enter Sweden to work. Detailed information can be found on the website of the Swedish government (www.regeringen.se/content/1/c6/12/04/45/5aa51e05.pdf).
Applications for a visa are made to, and considered by, a Swedish embassy or consulate abroad. In the event that they are unable to make a decision, the application is passed on to the Swedish Migration Board in Sweden.
Cost. The submission fee for visa applications made at a Swedish embassy or consulate abroad is EUR60 (as at August 2011, EUR1 was about US$1.4). As a rule, the fee is payable in local currency.
Time frame. The time frame for obtaining a visa is approximately four months.
Procedure for obtaining approval. Citizens of countries outside the EU must apply for and obtain a work permit to work in Sweden before entering the country. Further, if someone plans to work in Sweden for more than three months, a residence permit is also required.
EU/EEA citizens can work in Sweden without either a work or residence permit. However, if an EU/EEA citizen stays in Sweden for more than three months, they must register with the Migration Board.
Applications for work and/or residence permits are made to the Migration Board. The application can be made electronically. It is also possible to apply for a residence permit at an embassy or consulate.
Cost. Individuals must pay a fee when applying for a Swedish residence permit and/or a work permit. The cost for obtaining a work permit is SEK2,000 (as at 1 August 2011, SEK1 was about EUR0.11). The application for a residence permit, when made at the same time as the work permit, is free of charge.
Time frame. The waiting time is currently about six to seven months for both first time applications and extensions.
There are no legal or formal requirements for written employment contracts. An employment contract can be agreed orally or in writing. However, the employer must inform the employee, in writing, of the terms and conditions applicable to the employment no later than one month after the commencement of work. The information must contain:
The names and addresses of the employer and employee, the commencement date of the employment and the workplace.
A short specification or description of the employee's duties, occupational designation or title.
Whether the employment is for a fixed or indefinite term or whether it is probationary and in relation to:
indefinite-term employment: the notice periods;
fixed-term employment: the final date of employment or the conditions regulating its termination, and what form of fixed-term employment the employment refers to;
probationary employment: the length of the probationary period.
The starting pay, other employment benefits and intervals at which the remuneration is to be paid.
The length of the employee's paid annual leave and of the employee's normal working day or working week.
The applicable collective bargaining agreement (CBA), if any.
The terms of employment are regulated by law, collective bargaining agreements and individual employment agreements.
Mandatory labour law legislation applies to all employees in Sweden, and a provision is invalid to the extent that it excludes or limits employees' rights under these rules.
Approximately 70% of the Swedish working force is unionised. Employers are also highly organised, and most Swedish workplaces are bound by CBAs. The labour market is fairly homogenous, and CBAs are common in all industries. CBAs exist for white-collar as well as blue-collar employees.
An employer cannot unilaterally change the terms and conditions of employment.
As a principle, the employer and the employee must agree on the new terms and conditions of employment.
If the employer and employee are unable to agree, it is possible to change the terms and conditions of employment by giving the employee a notice of termination and then re-employing the employee with changed terms and conditions. However, a notice of termination by the employer must always be based on objective grounds. It is therefore important that there are in fact objective grounds for giving the employee notice of termination and changing the terms and conditions of employment. This is quite a technical procedure, and each case should be carefully reviewed prior to initiating such a course of action.
There are no statutory minimum wages under Swedish law. Wages are regulated through CBAs, some of which stipulate minimum wages.
The Working Hours Act 1982:673 contains rules on how many hours an employee is allowed to work. Normal working hours cannot exceed 40 hours per week. No more than 48 hours overtime over a period of four weeks, or 50 hours over a calendar month, is permissible. Maximum overtime is 200 hours per calendar year.
Under the Working Hours Act an employee must have at least 11 hours of consecutive rest per day. The hours between 12.00am and 5.00am must be included in that rest. During a period of seven days the employee must have had 36 hours of consecutive rest.
The Working Hours Act is semi-optional, as its regulations can be modified through CBAs. Therefore certain categories of employment which naturally require shift work, for example, health care, traffic, industries with continuous working, and so on, have working hours which do not correspond to the regulations considered above (see above, Working hours, Rest breaks).
The minimum holiday entitlement and holiday pay is regulated by law. The Annual Leave Act 1977:480 is semi-compulsory. It can entirely or partially be replaced by vacation regulations in CBAs, which in practice they are in most workplaces. The rules stipulated in CBAs can deviate from the law.
The Annual Leave Act applies to all employees. In principle, employees are generally entitled to 25 days' paid vacation per year.
There are approximately 13 public holidays in Sweden. These are not included in the minimum holiday entitlement.
An employee is entitled to time off in the case of sickness or injury which renders them incapable of working. If the employee is unfit for work for a period longer than seven days they are obliged to obtain a doctor's certificate. An employee is also entitled to time off for rehabilitation, as well as dental appointments.
The employer is obliged to compensate the employee with sick pay from day two to 14 of each period of absence due to illness or injury. Normally no wages or sickness benefits are paid for the first day of absence (waiting period). To receive sick pay, the employee must notify the employer of the sickness immediately. If the employee is on sick leave for more than seven days, the employee must produce a doctor's certificate.
After the initial 14 days, statutory sickness benefit is paid by the state to the employee. Sickness benefit is about 80% of the annual income, up to SEK321,000. Higher income does not qualify for sickness benefit.
CBAs can stipulate other rules concerning sick leave. More favourable terms can also be agreed in individual employment agreements.
Parents (including maternity, paternity, surrogacy, adoption and parental rights, where applicable)?
Carers (including those of disabled children and adult dependants)?
There are six different kinds of leave that can be taken in respect of the care of children:
Full leave for a female employee in connection with her child's birth and for breast feeding (maternity leave).
Full leave for a parent until the child has reached 18 months or, subject to the parent's receipt of full parental benefit, for time thereafter (full leave with or without full parental benefit). The leave can be taken by either the mother or father of the child.
Leave for a parent in the form of a reduction of normal working hours by three quarters, one half, one quarter or one eighth while the parent has three quarters, one half, one quarter or one eighth parental benefit respectively (partial leave with parental benefit). The leave can be taken by either the mother or father of the child.
Leave for a parent in the form of a reduction of normal working hours by up to one quarter until, in most cases, the child reaches the age of eight years (partial leave without parental benefit). The leave can be taken by either the mother or father of the child.
Leave for an employee's temporary care of a child (leave with temporary parental benefit). The leave can be taken by either the mother or father of the child.
Full leave or leave in the form of a reduction of normal working hours by one half for a parent to a child for which full childcare allowance is paid. The leave can be taken by either the mother or father of the child.
The father has the right to paternity leave for ten working days for each child connected with the childbirth under the Social Insurance Code 2010:110. The leave provides for the father to take part in the childbirth and to care for the child and the household during the child’s first two weeks.
Surrogacy is not allowed in Sweden (see the Genetic Integrity Act 2006:351), and so there are no specific rights that exist.
An employee has the right, as a parent, to leave from her or his employment in accordance with the Parental Leave Act 1995:584. This same right extends to an employee who:
Although not a parent, is the legal custodian and takes care of a child.
Has taken a child for permanent care and fosterage into her or his home.
Is permanently living together with a parent provided that the employee is, or has been, married to, or has, or has had, a child with that parent.
An employee has the right, as a parent, to leave from her or his employment in accordance with the Parental Leave Act.
Employees have the right to leave to care for relatives who are severely ill under the Informal Care Act 1988:1465, for as long as the carer is entitled to compensation from the social insurance system. The carer is entitled compensation from the social insurance system for the loss of payment for up to 100 full working days (Social Insurance Code 2010:110). The carer has the right to choose between full leave or a reduction of normal working hours by one half or one quarter. Two half days, or four quarter days, is equal to one day of compensation from the social insurance system.
Certain collective and individual pension premiums can be affected by a term of employment. Further, in the case of notice of termination, an employee may be entitled to a longer notice period depending on the term of employment. In the case of dismissals due to redundancy, the employee may have a better order of priority depending on the period of employment. Preferential right to re-employment applies if the employee has been employed for more than 12 months (during the previous three years).
An employee who changes employment by transferring from one employer to another can be credited with the period of employment with the former employer if, at the time of the transfer, both employers belong to the same group of companies. An employee who changes employment as a result of the transfer of an undertaking by law can include the period of employment with the former employer in calculating the period of employment with the subsequent employer. This also applies in connection with a change of employment due to bankruptcy. In the event of several such changes of employment, the employee can calculate the total period of employment with all employers.
Employees employed part-time or for a fixed term cannot be discriminated against. An employer cannot disfavour an employee working part-time or employees employed for a fixed term. The employer must apply the same terms and conditions of employment that apply to, or should apply to, employees in a similar situation who work full-time or have indefinite term employment. However, the prohibition does not apply if the application of the conditions is justified on reasonable grounds.
Agency workers are not considered as employees in relation to the company for which they actually perform work. They enter into an employment agreement with the temporary work agency. There are CBAs for temporary work agencies, and these employees receive the same type of contract as employees in other industries.
Personal privacy issues and the processing of personal data are regulated by the Personal Data Act 1998:204. The Personal Data Act aims at protecting people against the violation of their personal integrity by processing their personal data. The Data Inspection Board supervises compliance with the Act. The Personal Data Act includes provisions describing how personal data can be processed. The Act is concerned to a great extent with the consent of registered individuals and the provision of information to them. It also includes rules on data security and the correction of erroneous data.
The Discrimination Act 2008:567 regulates this area. The purpose of the Act is to combat discrimination and promote equal rights and opportunities in other ways. Discrimination is prohibited on the grounds of:
Gender.
Transgender identity or expression.
Ethnic origin.
Religion or other belief.
Disability.
Sexual orientation.
Age.
The Discrimination Act prohibits both direct and indirect discrimination. The Act applies in most areas of society, including working life. Further, the Discrimination Act applies to employees, job applicants, trainees, temporary workers and hired labour.
The Office of the Ombudsman against Discrimination is responsible for compliance with the Discrimination Act. Penalties are levied for infringements of the Discrimination Act. The penalty is designed to both compensate for the violation represented by an infringement and act as a deterrent against discrimination.
The Discrimination Act includes provisions prohibiting harassment on the same grounds as discrimination (see above, Protection from discrimination). In addition, the Work Environment Act 1977:1160 forms the basis of the Work Environment Authority's provision preventing victimisation at work, which prohibits all kinds of harassment.
Under the Constitution and the Freedom of the Press Act 1949:105, everyone has the right to provide information to the media without the risk of repercussions. There is also a right to anonymity and a ban on hunting whistleblowers, which prevents authorities and other public agencies from investigating who has provided information. This makes it possible for civil servants to provide information about activities that occur where they work. These generous rules of anonymity do not apply in the private sector.
The argument for creating private sector whistleblowing hotlines has been debated in Sweden. It has generally been prohibited, since the Personal Data Act 1998:204 prohibits companies from processing personal data about criminal acts. However, through a new provision in the Data Inspection Board Statute Book it is now possible for companies to have whistleblowing systems. However, these systems must comply with the provisions of the Personal Data Act as well as the new provision. Whistleblowing systems are subject to several conditions, amongst others that the reporting can only comprise serious improprieties and that only key persons can be reported.
The statutory notice periods vary between one to six months, depending on the term of employment and employee's age. However, longer notice periods can apply, depending on the individual employment agreements and the relevant CBA (if any).
Employees normally have to observe notice periods of between one to three months.
There are no mandatory severance payments under Swedish law (however, the individual employment agreements can stipulate otherwise).
Notice of termination should be made in writing and contain certain specific information required by law. The notice is given to the employee in person.
An employer wishing to serve notice of termination for reasons relating to the employee personally must inform the employee of this at least two weeks in advance. If the employee is a union member, the employer must notify the local trade union to which the employee belongs at the same time as information is given to the employee. The employee and the trade union are entitled to consultations with the employer. Where consultations have been requested, the employer cannot give notice of termination until the consultations have been concluded.
The Employment Protection Act 1982:80 regulates the circumstances under which an employer can terminate employment. Under the Act, the employer must have objective grounds (just cause) for terminating employment, that is, redundancy or personal reasons. Just cause does not exist when it is reasonable to require the employer to provide other work for the employee.
A fixed-term employment ceases automatically, without prior notice, at the end of the employment period or when the work has been finalised.
Union trustees at work can be entitled to priority in the case of redundancies at the workplace.
An employer must have just cause (objective grounds) for giving notice of termination (either redundancy or personal reasons). Generally, a closedown of business or a reorganisation constitutes redundancy.
Before employees are given notice of termination, the employees concerned must be offered any vacant positions with the employer, provided they have sufficient qualifications for at least one of the positions. The employer must observe an order of priority, as stipulated by law or any applicable CBA. A preferential right for re-employment may apply. If five or more employees are dismissed due to redundancy, the employer must notify state authorities before giving notice of termination. The timing depends on the number of employees that may be dismissed.
Before any decision to terminate employments due to redundancy, and as part of the decision-making process, the employer must call for, conduct and conclude trade union consultations with relevant trade unions.
Employees who receive notice of termination are entitled to payment from their employer for the whole notice period.
Foreign nationals working in your jurisdiction?
Nationals of your jurisdiction working abroad?
Individuals resident or domiciled abroad can be liable for tax in Sweden if they receive income based on work performed in Sweden. If a person lives abroad they can be regarded as resident in Sweden for tax purposes if staying in Sweden for more than six months in succession. In that case, the usual rules regarding state and local income tax apply. Citizenship does not affect tax liability in Sweden.
Generally, nationals working abroad for longer than six months are not liable for Swedish income tax if they are liable for tax in the country in which they work.
If they work for more than one year abroad in the same country, the income is tax free in Sweden, even if it is not taxed in the working country.
Income is taxed by municipal tax and state tax. Most taxpayers only pay municipal tax at a rate of between 29% to 35%, depending on residency. On employment income up to approximately SEK300,000, there is a special tax reduction of up to SEK1,800 per month. In addition:
20% in state tax is due for the income bracket SEK395,600 to SEK560,900.
A further 5% tax is due on income over SEK560,900, taking the total tax in the highest tax bracket up to between 54% to 60%.
Employers must pay social security contributions. All employers in Sweden pay statutory social security contributions on behalf of their employees, consisting of charges for pensions, health insurance and other social benefits. These contributions amount to 31.42% of gross salary. On pension contributions a separate tax payment by the employer of 24.26% is levied.
For employers bound by CBAs, a further fee is payable, calculated on the total payroll.
An employer can be liable for the acts of its employees?
A parent company can be liable for the acts of a subsidiary company's employees?
Employers are liable for personal injury and material damage caused by its employees in the course of their employment. Employers are also liable for:
Financial damages caused by criminal behaviour by the employee in the course of their employment.
Damage because of criminal violation against another person caused by the employee in the course of their employment.
Under general legal principles, a parent company is not liable for the acts of a subsidiary company's employees. In exceptional cases, there can be liability for the parent company. These exceptions require that it is in fact the parent company that has the decisive influence over the activities of the subsidiary employee. This provision also applies when the employee is employed by another company other than a subsidiary.
Employers must prevent illness and accidents in the course of employment and promote a safe work environment. The work environment must be satisfactory, taking into account the nature of the work and the social and technological development in society (Work Environment Act 1977:1160). In particular:
Work conditions must be adapted to employees' different physical and mental capabilities.
The employee must be given the opportunity to participate in the design of their own work situation, and in any processes implementing changes or developments affecting their work.
The employer must ensure that personal protective equipment is being used when adequate protection against illness or accidents cannot be achieved by other means.
An employer who intentionally or negligently fails to comply with the work environment obligations can be required to pay damages and/or fines, and/or can face criminal liability.
The employees of a limited liability company can be represented on the board of directors by employee representatives:
Employees in private companies have the right to be represented on the board of directors if the company has at least 25 employees.
If the company has 1,000 employees or more and operates in several industries or business sectors, the trade union can appoint three representatives.
The employee representatives have the same rights and obligations as directors appointed by the shareholder(s).
All important decisions concerning the business are subject to consultations (negotiations) with the relevant trade unions (Employment (Co-Determination in the Workplace) Act 1976:580). All collective rights are vested with the trade unions. An individual employee cannot initiate consultations or take part in a negotiation. On request, an employer must always consult (negotiate) with the trade union on any matter, within the framework of the relationship between the employer and a trade union member who is, or has been, employed by the employer. The employer has the corresponding right against the union.
The employer must call for, and conclude consultations with, the relevant trade unions about all important decisions or changes before the decision is made (duty of primary negotiation). This applies, among others, to:
Decisions concerning the extent and forms of operations such as expansion, reorganisation, closedown or reduction of operations.
Terms of employment.
Decisions concerning a transfer of undertaking and redundancies due to shortage of work are always subject to consultation as a primary negotiation obligation. In this case, if the employer is not bound by a CBA, consultation takes place with all trade unions affected (that is, unions with employees as members).
The subject matter of the consultation must be exhaustively discussed between the parties. However, there is no requirement that the trade union must agree to the decision. Once the consultations have been concluded, the employer is free to make the decision of its choice (subject to law).
Share transfers do not normally trigger consultation obligations for the target company with its trade unions. The employer is still the same and normally there is no change for the target company and its internal relationships and benefits. There are no formal changes or decisions made in the subsidiary company when it is being transferred to a new company.
However, the selling company as well as the buying company are normally obliged to consult with the trade unions they have CBAs with. Following closing, the target company often needs to call for negotiations with the trade unions, since the share transfer may trigger a reorganisation within the target, and more likely the managing director and other business leaders may resign. The appointment (but not the termination) of a new business leader is a matter for consultation, assuming the company is subject to a CBA.
Decisions concerning the transfer of undertakings are always subject to consultation as a primary negotiation obligation.
An employer that fails to comply with its obligation to consult with the relevant trade unions can be liable to pay damages to the different trade unions concerned.
If a CBA has been concluded between the employer and a trade union, the labour stability obligations apply to the relationship between those parties. They must refrain from industrial action (for example, strikes) against the other party for the duration of the CBA.
If the asset transfer is seen as a transfer of undertaking by law certain specific rules apply. Directive 98/50/EC amending Directive 77/187/EEC on the approximation of the laws of the member states relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of businesses (Acquired Rights Directive) is implemented in Swedish legislation:
In conjunction with the transfer of a business from one employer to another, the rights and obligations under contracts of employment, and employment relationships that existed at the time of the transfer, transfer to the new employer with unchanged terms and conditions.
The new employer is bound by the terms of any applicable CBA of the transferring company (for at least one year). The trade union and/or the transferor can terminate the CBA, provided notice is given before the transfer.
The employees affected by a transfer of undertaking have a right to oppose transferring with the business. These employees remain employed by the transferor.
A transfer of undertaking does not, in itself, constitute cause for termination and dismissals are banned for that reason. The prohibition does not prevent terminations necessary for economic, technical or organisational reasons. The required reduction of the workforce resulting from the transfer must be dealt with by the new employer. Employees transferred to the new employer are entitled to include their previous length of service if they are selected for redundancy involving the existing employees of the new employers together with the transferred employees.
The employees transferring with the business are entitled to the same terms and conditions of employment (automatic transfer on equal terms and conditions). However, harmonisation may be possible in certain cases. The harmonisation process can be quite technical from a legal perspective.
All employers in Sweden pay statutory social security contributions consisting of charges for pensions, health insurance and other social benefits. These contributions amount to 31.42% of the gross salary. 10.21% of this is pension contributions. Only the contributions on income up to a maximum of 7.5% income related base amounts (SEK420,447) entitle a person to a pension.
All Swedish residents are entitled to a state-financed guaranteed minimum pension of approximately SEK7,000 per month.
Employees pay 7% of their income to pension contributions, up to a maximum of SEK29,400 a year. However, this contribution is neutralised by a corresponding income tax reduction for the employee.
For employees under 26 years of age, employers pay a reduced social security contribution of 15.49%. For employees born in 1938 to 1945 employers only pay a pension contribution of 10.21%. For employees born in 1937 or earlier, no social security contributions are charged.
Pension contributions are tax deductible for the employer, and a tax of 24.26% is levied on the amount of the contribution.
The monthly amount depends on the:
Size of pension contributions made entitling a person to a pension.
General employment income development in the country.
Accrued value of the part (2.5%) of the pension entitlement invested according to individual choice (premium pension).
Current average life expectancy.
Is linked to the employee's salary?
Is linked to employer and/or employee contributions and investment return on those contributions?
It is common, but not compulsory, for employers to make extra monthly payments to an occupational pension, which is often based on CBAs. The schemes vary. Most common is a defined benefit plan or a defined contribution plan.
A defined benefit plan means that the employee receives a defined benefit, often in the form of a certain amount, or a certain proportion of the employee's salary. The premiums normally change during the period it is paid (depending on salary level, general interest rate, age and so on).
A defined contribution plan means that the compensation amount can be changed, since the employer undertakes to pay determined and set premiums on behalf of the employee.
The Swedish Pensions Agency has responsibility for all national pensions.
The Financial Supervisory Authority is the public authority that authorises, supervises and monitors all companies operating in Swedish financial markets, including insurance companies.
Supplementary pension schemes are principally regulated by the Social Insurance Code 2010:110, but there are also some rules regulating accountability and excess in the Act on Certain Provisions for Operations Taken By the Swedish Pensions Agency 1998:710 and in the Regulation on Certain Provisions Within the Supplementary Pension Scheme 2009:1465.
There are tax reliefs available for occupational pension schemes. The employer can pay up to 35% of the employee's salary into an occupational pension, but not exceeding ten price related base amounts (about SEK430,000). The payment is generally tax deductible for the employer. A special wage tax of 24.26% of the amount is paid instead of social security contributions.
Payments made by an employee into a private pension scheme are tax deductible for the employee up to an amount of SEK12,000.
In a transfer of undertaking the pensions in individual contracts, or under other arrangements, do not automatically transfer by law. The CBAs in many situations transfer, including pension rights.
Employees who are working abroad?
Employees of a foreign subsidiary company?
Employees working abroad can participate in a pension scheme established by a parent company in Sweden. Pension expenses are deductible for the employer. Special wage tax is not levied on pension payments for employees working abroad for more than 12 months.
In relation to income tax, a Swedish parent company can only deduct pension expenses for its employees. Pension expenses for persons employed by a subsidiary are not deductible. Pension payments to residents abroad, who are not included in the Swedish social security system, are not subject to special wage tax.
Occupational pensions can be secured in different ways.
If the employer pays pension premiums for its employees to an insurance company, the premiums are protected by the insurance company.
Further, pension commitments made by a company can be safeguarded in a separate pension fund.
Some companies retain their pension capital in their business operations, as a debt in the balance sheet. This requires that the company has an insurance company which secures, guarantees and administrates the pensions.
Under the Wage Guarantee Act 1992:497, in the case of bankruptcy a corporate reconstruction payment can be made under the guarantee for a pension claim that has a priority right under the Rights of Priority Act 1970:979.
It is quite common to reward key employees/management employees through bonus payments. However, bonuses have been subject to criticism in Sweden, particularly in state-owned companies.
The Financial Supervisory Authority has issued rules designed to put a stop to banks awarding big bonuses for short-term gains.
The Swedish Act on the Right to Employee's Inventions 1949 specifically deals with ownership of employee inventions. The Act stipulates that the employer acquires a right or automatically has a right to use those inventions that are patentable in Sweden and reported by employees in the company. The employee has a fundamental right to be compensated for the right that has been granted to the employer.
Other IP rights also generally belong to the employer if they have been created in the course of employment. It is common to regulate the ownership of IP rights in individual employment agreements.
The employment agreement imposes a duty of loyalty on employees in relation to the employer, that is, the employees are violating their contractual obligation if they act in a way that causes the employer damage. The duty of loyalty applies during the employment (including the notice period). This duty means that the employee should put the employer's interest before his own. The duty also applies even if it is not stated expressly in the employment agreement.
The duty of loyalty means, among others, that employees are forbidden from engaging in competing activities with the employer, or disclosing confidential information or trade secrets of the employer.
Non-compete restrictions after employment are only enforceable in certain cases. Generally, non-competition clauses are only acceptable among employers which depend on the independent development of products or methods, where employees have therefore acquired product secrets or comparable know-how.
A non-compete restriction is not enforceable if its sole purpose is to retain an employee because of their special personal knowledge or experience. Further, common practice and case law indicate that the employee must be compensated for the inconvenience caused by the restriction. The restriction cannot apply for more than 24 months after the expiry of the employment. The restriction must be limited both geographically and to certain trade or business activities.
As of 1 January 2011, there is a new Social Insurance Code. Approximately 30 different laws concerning social insurance and so on are included in the new Social Insurance Code, resulting in a more coherent piece of legislation. A few definitions have been altered; however, it does not make any major changes to the social insurance system.
T +46 (0)708 17 98 00
F +46 (0) 8 505 646 99
E ojansson@kilpatricktownsend.com
W www.kilpatricktownsend.se
Qualified. University of Stockholm, LL.M. (1977) jur. kand, Member of the Swedish Bar Association, Advokat (1983)
Areas of practice. Labour and employment; transactions; arbitration.
T +46 (0)733 58 13 73
F +46 (0) 8 505 646 99
E rlakatos@kilpatricktownsend.com
W www.kilpatricktownsend.se
Qualified. Lund University, LL.M. (1992) jur. kand, Member of the Swedish Bar Association, Advokat (2002)
Areas of practice. Labour and employment; dispute resolution.
T +46 (0)733 58 28 54
F +46 (0) 8 505 646 99
E heriksson@kilpatricktownsend.com
W www.kilpatricktownsend.se
Qualified. University of Stockholm, LL.M. (2008) jur. kand. Member of the Swedish Bar Association, Advokat (2011)
Areas of practice. Labour and employment; transactions; arbitration.
T +46 (0)733 58 25 51
F +46 (0) 8 505 646 99
E fmejhert@kilpatricktownsend.com
W www.kilpatricktownsend.se
Qualified. University of Stockholm, LL.M. (2007) jur.kand
Areas of practice. Labour and employment; construction.
