Termination of employment – rights and obligations

If you as a manager need to terminate the employment of employees, it is important that you are aware of your obligations, including those under the Swedish Employment Protection Act. To ensure you do not miss anything, get help from an employment lawyer or employers’ organisation.

There are two ways of terminating an employee’s employment: termination with notice and summary dismissal. Both require objective grounds, but otherwise there are major differences between them, both for you as an employer and for the employee. Termination with notice is the most common, and the one you apply in the first instance.

Reasons for termination with notice

The rules differ depending on whether the grounds for termination are personal grounds or a shortage of work (redundancy). Personal grounds are related to the individual, whereas all other reasons for termination are about shortage of work/redundancy. In both cases, the burden of proof is on the employer to prove that there are objective grounds for the termination.

Examples of personal grounds

Examples of personal grounds include misconduct, unauthorised absence, serious difficulties working with others and disloyalty. Read more about what applies specifically attermination with notice on personal grounds or summary dismissal.

Examples of shortage of work (redundancy)

Shortage of work/redundancy has to do with the business and not with the employee personally. It could, for example, be due to a reduction in operations or an organisational restructuring. Read more abouttermination with notice owing to shortage of work (redundancy).

Obligation to offer suitable redeployment

Before a termination with notice can proceed, the employer is obliged to investigate the possibility of redeploying the employee in an alternative role. The new job offered should, as far as possible, be equivalent to the one the employee has held previously. This does not mean that employment conditions need to be equivalent. For example, the salary for the work offered may be lower.

Conditions for redeployment

The possibility of redeployment needs to be explored across the business. As an employer, you must carry out what is known as a redeployment investigation. Redeployment requires that

  • there is a job vacancy – no one else should have to have their employment terminated as a result of the redeployment
  • the person being redeployed must have sufficient qualifications for the job after a training period.

A redeployment investigation may well show that there is no job available for which the employee is qualified or which they can be trained to do within a reasonable time. Nevertheless, the employer is deemed to have fulfilled its obligation by having investigated the possibility of redeployment.

Obligation to negotiate

Employers must negotiate on their own initiative with the trade unions concerned before taking decisions on major changes affecting the business or the working or employment conditions of union members.

In the event of shortage of work/redundancy, all the unions concerned must be invited to negotiate.

The obligation to negotiate is regulated in the Employment (Co-Determination in the Workplace) Act (MBL), which you can read more about on the Swedish Parliament website(Swedish).

In the case of personal grounds, you must inform the employee and notify the trade union to which the employee may belong. This must be done at least two weeks in advance. If the employee or the union requests a consultation, the termination cannot be implemented until the consultation has been completed.

Written notice of termination

A notice of termination must be delivered personally to the person whose employment is being terminated. It needs to be in writing and contain information on how the employee can proceed if they want to challenge the termination or have it legally reviewed. If the reason for the termination is shortage of work/redundancy, the employee should be informed that they are entitled to re-employment and that they need to declare their interest in being re-employed.

The employer must also give reasons for the termination in writing if the employee or the employee’s trade union so requests.

The termination takes place when the employee receives the written notice. If it is not possible to deliver the message in person, it can be sent as a registered letter. In this case, the termination is deemed to have taken place upon receipt, or at the latest ten days after the letter was sent. If the employee is on holiday, the termination is deemed to have taken place no earlier than the day after their return from holiday.

Notice periods

In the event of termination on personal grounds or due to shortage of work/redundancy, the employee has a notice period before termination of their employment. The length of the notice period depends on the length of employment. The length is specified in the Swedish Employment Protection Act (LAS) or in the collective agreement applicable to the employee.