1. What are the types of employment contract recognized in Sweden?
2. How can a contract of employment be terminated?
3. What are the applicable notice periods?

The types of employment optional here are the ones defined in the Employment Protection Act. There are other types of employment according to the various collective bargaining agreements on the Swedish labour market and an employer bound by such an agreement, should investigate the possible employment types prior to entering into an employment contract. The main type of employment according to the Employment Protection Act is an employment until further notice, Section 4 of the Employment Protection Act.

It is common to start with a probationary employment, Section 6 of the Employment Protection Act, which automatically will turn into an employment until further notice if neither party terminates the probationary employment. Such a probationary employment is limited to six months at the longest. If the parties do not agree otherwise, either party may terminate the probationary employment without stating the grounds therefore. However, the employer may not by terminating the probationary employment discriminate the employee or otherwise act in contradiction with good practice on the labour market. In case the employer wish to terminate the probationary employment prior to the last date of the probationary period, the employer shall observe a 14 days expiry notice Section 31 of the Employment Protection Act. In case the employee is a member of a trade union, the employer shall at the same time notify that trade union. The employee and the trade union has a right to ask for consultations regarding the termination of the probationary employment. The employee is further entitled to a formal notice at the last date of the probationary period. An employer may serve a notice of termination on the last date of the probationary employment, i.e. without giving an expiry notice 14 days before. According to practice, the employer shall then pay severance to the employee corresponding to 14 days salary.

Regarding fixed-term employments; the guiding principle is that the parties may not terminate the employment with notice. In case of gross breach of contract from the employer’s side, the employee may annul (frånträda) the employment contract. In case of gross breach of contract from the employee’s side, the employer may terminate the employment contract without notice (avsked). Where the parties agree on longer fixed-term employments, e.g. over a year, it good be wise to agree on the possibility to give notice of termination. An employer always needs to have just cause for termination with notice.

General fixed-term employment and substitute employment are forms of employment which include a temporal limitation entailing that in certain cases temporary employment is converted into permanent employment without any formalities.

With respect to the general fixed-term employment form of employment, there are two alternative temporal limitations, and the alternative which is most advantageous for the employee must be applied in each individual case. The first limitation entails that where an employee has been employed as a general-fixed term employee for a total of more than two years, the employment is converted into permanent employment. The second limitation also assumes that an employee has been employed as a fixed-term employee for more than two years. However, the conversion to permanent employment may also take place earlier where the employee, during a period, has consecutively been employed as a general fixed-term employee, substitute employee and seasonal employee, i.e. in those cases where an employee stacks several types of temporary forms of employment on top of each other. “Consecutively” does not mean that the employment positions succeed each other but, rather, an interruption in time of not more than six months between each employment is considered as “consecutively”.

For the substitute employment form of employment, the temporal limitation entails that where an employee has been employed as a general fixed-term employee for a total of more than two years, the employment is converted into permanent employment.

Under certain circumstances, an employee on a fixed-term employment has a right to a formal notice that the employment will not be prolonged, Section 15 of the Employment Protection Act. This is the case if the employee has been employed for more than 12 months during the last three years and in case the employee will not be offered further employment. The formal notice shall be handed over to the employee at least one month prior to termination date. If the employment is shorter than one month, the formal notice shall be given at the commencement of the employment. If the employee is a member of a trade union, the employer shall at the same time notify that trade union. The employee and the trade union has a right to ask for consultations regarding the formal notice and the up-coming termination of the employment. When it comes to seasonal employments; where the employee at the termination date has been employed for more than six months during the last two years, the employer shall give a formal notice in case the employee will not be offered a new seasonal employment at the beginning of the next season. Such notice shall be given no later than one month prior to the new season starts.

An employee who is made redundant (uppsagd på grund av arbetsbrist) or whose fixed-term employment is not prolonged, may under certain circumstances have a priority-right to re-employment according to Section 25 of the Employment Protection Act. The pre-requisite for such priority-right is more than 12 months’ employment during the last three years. In case of seasonal employees, the pre-requisite for the priority-right is more than six months’ employment during the last two years.

An employer has a duty to inform fixed-term employees of vacant positions with employment until further notice. The information may be made open in the work place. If a fixed-term employee is on parental leave, such information shall be given directly to the employee if she/he has so requested.

4. Is it possible to employ employees in the form of teleworking?

There are not any particular regulations for employing teleworkers.

5. What are the rights granted for women after becoming pregnant during the employment contract?

Pregnant women are protected from being dismissed, even if they are employed for a short period of time.

6. What types of paid days-off are the employees entitled to?

All employees are entitled to five weeks vacation. If an employee got sick the employee gets no salary for the first sick-day. During sick-day 2-14 the employee gets 80 % of the ordinary salary from the employer. After sick-day 14 the employee gets sick pay from the Social Security Office.

7. Is it possible to include a non-competition clause in the employment contract and what are the premises for concluding a valid non-competition agreement?

The employee has a duty of loyalty which in general entails a prohibition against competing activities during the term of employment. Even the preparing of competing activities has in case law been found incompatible with this duty of loyalty.

An unreasonable non-competition clause may be adjusted or declared invalid based on section 38 of the Swedish Contracts Act. Any sanction in the form of a penalty may be subject to adjustment pursuant to section 36 of that Act. In an employment contract, the employer’s interest in protecting its know-how must be weighed against the employee’s interest in an unrestricted ability to participate in gainful activity. Similar considerations arise in conjunction with confidentiality clauses in employment relationships. Cf. the provision regarding confidentiality.

If an employee violates a non-competition clause a court may forbid continuation of the competing activity. The court may according to Chapter 15, Section 3 of the Procedural Code make an interim injunction. See inter alia AD 2017, no. 44.

Competition clauses in employment agreements which are reached with the seller in conjunction with transfer of a business are often regarded as a more purely commercial contractual relationship, and thus the risk that such a clause will be declared invalid is significantly less than in ordinary negotiation situations.

8. What happens to employees after the employer is going bankrupt? Are the employees entitled to get a severance pay?

If the employer is going bankrupt, the employees are entitled to get a severance pay from the Wage guarantee. Wage guarantee means that the employees can be reimbursed for the salary or similar that the employer owes the employees. Wage guarantee applies when the employer went bankrupt or going through a reconstruction. It is the bankruptcy trustee or administrator to determine if the employees are entitled to the guarantee and how much money they will receive. Pay security also means that the employees can get their severance pay during the notice period.

9. Are there any courts specially appointed for the purpose of dealing with labour law matters?

The Swedish Labour Court is a special court set up to hear and rule on labour-related disputes. A labour dispute is any dispute which affects the relationship between employers and employees.

Certain types of labour dispute may be brought directly before the labour court. In such cases the labour court has exclusive jurisdiction. In other types of dispute claims must be brought before the ordinary district court. If any party is dissatisfied with the district court’s judgement they can lodge an appeal with the labour court. In either case the judgement of the labour court is the final judgement in the dispute since labour court judgements cannot be appealed.

The labour court is a normal court in the sense that it is financed from public funds. Members of the court are appointed by the government. The individual parties in a dispute have no influence whatsoever over the composition of the court. In addition, the court also follows largely the same judicial process as the general courts. The Code of Judicial Procedure applies to the labour court.

Jurisdiction of the labour court:
Two conditions must be met for a labour dispute to be brought directly before the labour court. The claim must be lodged by an employer organisation or employee organisation or by an employer who has entered into a collective agreement on an individual basis. In addition, the case must concern a dispute arising from a collective agreement, a dispute relating to the law concerning the right to participation in decision-making (such as disputes relating to the freedom of association or the right to negotiate), a dispute between parties who are bound by a collective agreement, or a dispute relating to a place of work where a collective agreement is in force. If any of these conditions are not met the claim must be brought in the district court and any subsequent appeal will be heard before the labour court.