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Employment & Immigration
As in every other part of the world, the COVID-19 outbreak is affecting Swedish society in numerous ways. This article presents a selection of Swedish employment law-related responsibilities and possibilities for employers to be aware of in view of the effects of COVID-19, particularly with regard to their work environment responsibilities and the Short-Time Work Allowance Act.
Workplace harassment between employees raises questions regarding employers' responsibility to maintain a healthy and sustainable work environment and what actions can be taken against disruptive employees. Employers and their representatives have an extensive responsibility to maintain a positive work environment, including assessing, preventing and acting against risk factors such as harassment.
The government recently decided to appoint a special investigator to explore the possibilities of modernising some of the basic regulations of Swedish labour law. The investigation aims to explore how Swedish labour law can be modernised and adapted to meet current market needs while maintaining the fundamental and historical balance between the various parties to the labour market.
Company leaders such as CEOs are expressly excluded from the scope of the Employment Protection Act. Therefore, the parties to a CEO's employment agreement must agree its terms. However, the reasonability and validity of the agreed terms and conditions may be assessed or determined by the Swedish courts. Given the lack of applicable law in this area, the parties to a CEO's employment agreement must agree on the terms relating to both active employment and termination (by either party).
The Labour Court recently issued two decisions which further outline the principles for determining the 'real' employer when an employer-employee relationship is unclear. The decisions confirm that the court still places a strong emphasis on protecting employees' rights. Thus, in the interests of full transparency, employers must fulfil their obligations by ensuring that employees have full knowledge of any agreement between their employer and another company that performs employment-related functions.
Sweden is one of the most secular countries in the world with full freedom of religion. Further, freedom of conscience is a right protected by the European Convention on Human Rights. However, domestic law recognises no right to conscientious objection. A recent Labour Court decision has clarified from an employment law perspective whether freedom of conscience gives healthcare professionals a right to conscientious objection.
Businesses considering purchasing all or part of a business in Sweden often make several economic and organisational considerations regarding the assets and liabilities of the business being acquired. Employment-related issues and how any redundancies can be handled may also be contemplated. Despite such considerations, buyers commonly disregard entirely, or at least underestimate, the importance of employment regulations in connection with a transfer of undertakings.
The Labour Court recently reviewed whether actions conducted by the employees of a private waste collection and transportation company were illicit collective strike actions. According to the court, the employees had refrained from performing their work tasks in order to pressure the company into ending the demands to conduct an inventory of keys. This was a stoppage of work and an illicit collective strike action, since it had not been duly decided by the trade union.
Companies and individuals acting on the Swedish labour market should be aware of the delimitation in law between consultants and employees. Whether an individual is to be considered a company consultant or an employee will determine the applicability of employment protection and could have significant tax implications affecting both companies and private individuals.
The legislature recently amended the law known as 'Lex Laval', according to which the right to conduct collective actions against foreign labour stationed in Sweden has been limited. The amendments in Lex Laval, which entered into force in June 2017, bring expanded rights for Swedish trade unions through collective actions by demanding that workplaces with foreign labour be covered by Swedish collective agreements.
Calculating compensation for damages can be complicated. The Labour Court recently ruled on this matter and made three individuals and their company liable to pay damages of several million Swedish kroner. It is the first case of its type and magnitude to be tried by a court of the highest instance. The Supreme Court has also decided that the dispute in question is a labour dispute, not a civil claims case.
Following the government's recent finding that whistleblower protection must be improved, new legislation has entered into force. The new legislation has given Sweden its first act specifically on whistleblowing. While the Whistleblowing Act does not regulate any right for employees to blow the whistle about wrongdoing, it protects employees and temporary workers who report serious wrongdoings in their employer's business from retaliation.
Foreign employees may face expulsion if their employers fail to comply with certain employment terms in collective agreements. The Aliens Act stipulates that a foreign citizen who has been offered employment in Sweden can be granted a time-limited work permit, provided that the employment enables the employee to provide for him or herself. The permit will be revoked if the legal requirements are no longer met – for example, if the employment terms are inferior to the relevant collective agreement.
The Supreme Court has ruled that under certain conditions a trade union may be liable for damages if industrial action has taken place in violation of the European Convention on Human Rights. Previously, the general opinion was that employers' organisations and trade unions could not be liable for such damage claims. The decision is particularly significant for small companies, which are more affected by such industrial action.
Sweden has seen a significant increase in reported work-related illness. The Work Environment Authority has identified workload, work pace and work environment as the causes behind the increase. In an effort to keep up with the labour market, the authority has issued new regulations regarding organisational and social work environments. The regulations are intended to support employers in their efforts to prevent workplace illness.
Can a trade union be held liable for damages for breach of the European Convention on Human Rights? The Supreme Court is about to answer this question after a lawsuit was filed against trade union Byggnads by a construction company claiming that the union violated the convention's rules on freedom of association and protection of property.
An employee's duty of loyalty ceases once the employment relationship is terminated. To limit the possibility for employees to conduct competing business after employment ends, employers can include a non-compete clause in the employment agreement. However, the applicability of clauses in individual cases is limited to what may be considered reasonable according to law, case law and agreements between parties.
The Western Sweden Court of Appeal recently ruled on a case regarding three women who had taken two databases from their previous employer and started a competing company. The court stated that the databases were considered trade secrets and the employees' actions constituted a breach of the duty of employee loyalty.
Following the suicide of an employee, two managers were convicted for an environmental offence believed to have caused another's death. The ruling clarifies employers' statutory responsibility for the physical and psychosocial working environment. The court found that the employer's gross negligence had caused the employee's death, because it had breached what was incumbent on it to prevent.
Can using a litigation company pierce the corporate veil and result in shareholders being held personally liable?Sweden | 05 May 2020
From time to time, the question arises as to whether shareholders or other representatives of a company can pursue litigation by creating a company specifically for such purposes and, in the event of loss, avoid personal liability for the litigation costs. A Supreme Court ruling shows how the court balances the statutory obligation to cover the costs for litigation with the rules limiting shareholder liability with regard to their company's obligations by applying the principle of piercing the corporate veil.
Supreme Court strengthens impression that arbitral awards usually stand despite tribunal's procedural errorsSweden | 19 November 2019
Recent case law confirms that the Swedish courts uphold the general principle that awards finalise a dispute between parties. In order to successfully challenge an award, the challenging party must prove not only that the procedural error likely affected the outcome of the award, but also that the error is of essential importance.