Are you looking to hire someone, but unsure of which employment form to use, or how they work? Whether it be part-time or full-time, a trial- or indefinite employment - having a general understanding of the different employment forms is crucial for any business looking to employ in Sweden.
The rules found in the Swedish Employment Act are non-negotiable and mandatory for all employers to follow, so non-compliance with the law could result in fines or an unpleasant surprise. If you for example hire someone with a probationary period which is longer than the law allows, the employment is automatically converted to an indefinite employment after the maximum allowed six months.
Draft an employment contract that will fit your needs, regardless of what kind of employment form you are offering, with Jurio. The contract can be signed digitally and is completed in no more than 15 minutes.
From an employee’s perspective, indefinite term employment, or "tillsvidareanställning" in Swedish, is the most attractive employment form. As the name indicates, the employment will continue to run indefinitely without a set end date. The employee is free to terminate the employment at any time, but the employer’s opportunity to terminate the contract is strictly regulated.
In order to terminate the employment, the employer must prove that the decision was made on objective grounds, such as shortage of work, and that there is no alternative position for the employee in the business. Furthermore, even if the employer can prove a shortage of work, the law still requires the employer to follow a “last-in-first-out”-principle. Meaning that your most recent employees’ contracts are to be terminated first, regardless of their work performance.
An indefinite term employment can also be terminated due to personal reasons, or due to a serious breach of contract from the employer’s side. However, the bar is set fairly high and is reserved for cases such as repeated disallowed absence, refusal to work, serious cooperation-difficulties or crimes against the employer or other employees.
Due to the commitment that an indefinite employment entails, employers often find themselves hesitant to offer indefinite term employments, since the contracts are very difficult to terminate. As a result, the probationary employment, or provanställning in Swedish, has risen in popularity. The employer and the employee are free to negotiate a trial period, which may last no longer than six months. During this period, any of the parties can single-handedly terminate the contract without any particular reason.
With a probationary employment, the employer gets the benefit of testing the newly recruited employee for a few months before committing to an indefinite employment. However, you might discourage senior job applicants from applying for the position in the first place. For example, an employee will have a harder time being granted a mortgage loan from a bank if he or she only has a probationary employment contract as proof of income.
A probationary employment will automatically convert into an indefinite term employment when the trial period ends, unless one of the parties chooses to terminate the trial period prior to its due date. As an employer, you have to inform the employee that you wish to terminate the employment contract at least two weeks before the trial period ends. Failure to adhere to the notice period may result in having to pay a fine.
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The most criticised employment form is the fixed-term employment, in Swedish "visstidsanställning". By employing someone for a fixed term, the termination of the contract is decided from the start, complete with a date. The Employment Security Act prohibits fixed-term employments from lasting more than 24 months spanning over a five year period. But a new legal act proposed by the Swedish government will, if passed by parliament, shorten the period to 12 months during a five year period. The new act is proposed to enter into force on the 30th of June 2022.
It is up to the employer and employee to decide whether the fixed-term contract can be terminated prior to the end date by any of the parties, or if it requires mutual consent. As an employer, you get the benefit of having a predictable work force for a fixed time period. A breach of the contract, such as the employee quitting the job prior to the end date, may give rise to damages. But few employers actually enforce the contract and demand damages if the employee insists on leaving.
Even with the law on your side, the side effects of causing a hostile work environment should not be underestimated. Coercing an employee who wants to quit into staying, under the threat of having to pay damages to the employer, is therefore not recommended. Rather, we recommend a compromise where the employee accepts a certain notice period needed to find a replacement, but no longer than necessary.
All businesses have different needs. Whatever your needs are, Jurio offers an easy-to-use online legal service which empowers you to draft your own employment contracts, which you can sign by hand, or digitally with your BankID.