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The Swedish rules around hiring and firing that could spark a political crisis

What are the Swedish employment law changes that are being argued about – and why could they spark a government crisis? The Local explains.

The Swedish rules around hiring and firing that could spark a political crisis
Currently, the most recently hired employees are at biggest risk of redundancy. Photo: Isabell Höjman/TT

What's the Employment Protection Act?

This is the law that is under review. It outlines the rules for hiring and firing within Swedish businesses, and also contains regulations for employment contracts. In Swedish, it is called Lagen om anställningsskydd, and is usually referred to simply as LAS. 

One of the key principles is 'last in, first out' when it comes to redundancies. In other words, if a company needs to restructure or cut jobs, they should work from the principle that the most recently hired person is the first to go. There are exceptions, such as if that employee performs a key role that can't easily be done by someone else.

The government ordered a review into the law, the results of which were shared in June. They've been welcomed by centre-right parties and businesses, but received criticism from trade unions and the Social Democratic Prime Minister as well as other left-of-centre parties.

Why is it being reviewed?

It was part of the so-called January Agreement, a deal drawn up between four parties to ensure that Sweden's government could rule and put an end to post-election deadlock.

In order to get the passive backing of their former centre-right rivals the Centre and Liberal parties, the centre-left Social Democrat-Green government agreed to a review of the employment law.

In the agreement, the government pledged to “modernise the Employment Protection Act to adapt to the present-day labour market while maintaining a basic balance between the actors in the labour market”.

“The law should give businesses flexibility and protect individuals against arbitrary dismissal,” the January Agreement said. 

Specifically, it asked for proposals giving clear exceptions from the 'last in, first out' rule, to reduce the costs of dismissal for small businesses, lay out the responsibility of employers for skills development, and create a balance in job protection for people on different kinds of contracts. 

Photo: Lieselotte van der Meijs/

What did the review say?

The review suggested that all companies, regardless of size, should be able to exempt up to five employees from the 'last in, first out' principle during any rounds of layoffs. Currently, companies with more than ten employees may exempt up to two, and smaller companies must follow the principle.

And age would no longer be a factor. In cases where two employees have been at the company an equal length of time and one must be laid off, currently the youngest employee has to leave. Under the new proposals, the employer would be able to make their own decision.

It also suggested making the rules stricter when it comes to giving an employee a new position rather than lay them off. Instead of being allowed to take new qualifications, as is allowed under the current rules, the person would need to be able to take on their new responsibilities straight away.

Another big proposed change was that in small companies, those with fewer than 15 employees, it would not be possible for a dismissal to be declared invalid. That means that in the case of any disagreement, the company would not have to pay the salary of the affected employee until the issue was resolved, as is the case today. For larger companies, they would only have to pay out the salary in the event of a court decision declaring the dismissal invalid, and not during the time of the dispute.


What are the arguments for and against?

The 'last in, first out rule' may lead to less labour market mobility. For example, it could dissuade employees from changing jobs because they would then risk being the last person in. And it means that the highest performing individuals aren't necessarily those who keep their jobs in times of difficulty. Företagarna, an organisation representing business-owners, welcomed the proposals, saying current rules hinder company growth and give flexibility. 

But there's a risk that giving managers the say in who is affected by layoffs could lead to discrimination, or would go against the government directive to protect individuals from arbitrary dismissal.

Sweden's trade unions are very strong, and generally say they prefer to negotiate employment terms themselves. The Swedish Trade Union Confederation has said that the new proposals make it more difficult for them to carry out negotiations.

Prime Minister Stefan Löfven of the Social Democrats was critical of the proposals. 

“The balance between [employers, employees and unions] has not been upheld,” he told Aftonbladet at the time.

What happens now?

The January Agreement stated that if the different parties involved in the labour market were satisfied with the proposals, they would come into force from January 2021. But if no such agreement was reached, it stated that instead the government would put forward proposals on the basis of the other parties' suggestions.

Negotiations between The Swedish Trade Union Confederation and the Confederation of Swedish Enterprise broke down in the early hours of October 1st, so the matter is currently in the hands of the politicians.

This could spark a government crisis, with the Left Party vowing to put forward a vote of no confidence in parliament if the ruling Social Democrats press ahead with the matter. But if the Social Democrats do not do so, they risk angering their Centre and Liberal partners.

At the time of writing, all three latter parties have said that they would be open to allowing the unions and businesses more time to work out an acceptable compromise, so it is currently unclear what will happen.

Have you got a question about working in Sweden, or want to share your own experience? Perhaps you were a victim of the 'last in, first out' principle, have experienced discrimination at work, or have set up your own business? The Local is here to help you navigate life in Sweden and raise your voice, so please get in touch.

Member comments

  1. It’s ok to update articles but please clearly mark what’s the updated part. I read this article when it came out in June and now I couldn’t understand which one is the new part or what is the new information that the update means to deliver.

  2. Hi Renato, that’s great feedback, thank you! We’ll keep that in mind for the future. In this case, most of the updates are in the “what happens now” section, so we now know that negotiations between the labour market groups have broken down (whereas in June they hadn’t yet got under way).

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For members


How foreigners can get on the fast track for a work permit in Sweden

It can now take about six months to get a work permit in Sweden, and a year for an extension. Here's how you can get on the fast track.

How foreigners can get on the fast track for a work permit in Sweden

How long does it normally take to get a permit to work in Sweden? 

According to the calculator on the Migration Agency’s website, 75 percent of first work permit applications are completed within three months, and 75 percent of work permit extensions are completed within 14 months. 

These numbers, though, are only for people in non-risk industries. If you are applying for a job in the cleaning, building, hotel and restaurant, or car repair industries — all of which are seen as high risk by the agency — applications can take much longer to be approved. 

For these industries, the calculator suggests a long 12-month wait for a first application and a 17-month wait for an extension. 

This is because of the higher number of unscrupulous employers in these industries who do not pay foreign workers their promised salaries, or do not fulfil other requirements in their work permit applications, such as offering adequate insurance and other benefits. 

So how do you get on the fast track for a permit? 

There are two ways to get your permit more rapidly: the so-called “certified process” and the EU’s Blue Card scheme for highly skilled employees. 

What is the certified process?

The certified process was brought in back in 2011 by the Moderate-led Alliance government to help reduce the then 12-month wait for work permits.

Under the process, bigger, more reputable Swedish companies and trusted intermediaries handling other applications for clients, such as the major international accounting firms, can become so-called “certified operators”, putting the work permit applications they handle for employees on a fast track, with much quicker processing times. 

The certified operator or the certified intermediary is then responsible for making sure applications are ‘ready for decision’, meaning the agency does not need to spend as much time on them. 
You can find answers to the most common questions about the certified process on the Migration Agency’s website

How much quicker can a decision be under the certified process? 
Under the agreement between certified employers and the Migration Agency, it should take just two weeks to process a fresh work permit application, and four weeks to get an extension. 
Unfortunately, the agency is currently taking much longer: between one and three months for a fresh application, and around five to six months for an extension. 
This is still roughly half the time it takes for an employee seeking a permit outside the certified process. 
The Migration Agency told the Dagens Nyheter newspaper in a recent article that in September the average decision had taken 105 days, while over the year as a whole, applications for certified companies had taken 46 days, and those for non-certified companies 120 days. 

How can someone planning to move to Sweden for work take advantage of the certified process? 
Unfortunately, it is very much up to your employer. If you are planning to move to Sweden for work, you should make sure to ask prospective employers if they are certified, or sub-certified through an intermediary firm, and take that into account when deciding which company to take a job with. 
Smaller IT companies are often not certified, as they tend to start off by recruiting from within Sweden or the European Union. 
If you have begun a work permit application with a company that is not certified or sub-certified, then you cannot get onto the fast track even if your employer gets certified while you are waiting for a decision. 
The certified process can also not be used to get a work permit for an employee of a multinational company who is moving to the Swedish office from an office in another country. 
If my employer is certified, what do I need to do?
You will need to sign a document giving power of attorney to the person at your new company who is handling the application, both on behalf of yourself and of any family members you want to bring to Sweden.  
You should also double check the expiry date on your passport and on those of your dependents, and if necessary applying for a new passport before applying, as you can only receive a work permit for the length of time for which you have a valid passport. 

Which companies are certified? 
Initially, only around 20 companies were certified, in recent years the Migration Agency has opened up the scheme to make it easier for companies to get certified, meaning there are now about 100 companies directly certified, and many more sub-certified. 
To get certified, a company needs to have handled at least ten work permit applications for foreign employees over the past 18 months (there are exceptions for startups), and also to have a record of meeting the demands for work and residency permits.  
The company also needs to have a recurring need to hire from outside the EU, with at least ten applications expected a year. 
The Migration Agency is reluctant to certify or sub-certify companies working in industries where it judges there is a high risk of non-compliance with the terms of work permits, such as the building industry, the hotel and restaurant industry, the retail industry, and agriculture and forestry. 
Most of the bigger Swedish firms that rely on foreign expertise, for example Ericsson, are certified. 
The biggest intermediaries through whom companies can become sub-certified are the big four accounting firms, Ernst & Young, Deloitte, KPMG, and Vialto (a spin-off from PwC), and the specialist relocation firms Human Entrance, and Alpha Relocation. Bråthe estimates that these six together control around 60 percent of the market. Other players include K2 Corporate Mobility, Key Relocation, Nordic Relocation, and some of the big corporate law firms operating in Sweden, such as Ving and Bird & Bird. 

What is the EU Blue Card, how can I get one, and how can it help speed up the work permit process? 
Sweden’s relatively liberal system for work permits, together with the certification system, has meant that in recent years there has been scant demand for the EU Blue Card. 
The idea for the Blue Card originally sprung from the Brussels think-tank Bruegel, and was written into EU law in August 2012. The idea was to mimic the US system of granting workers a card giving full employment rights and expedited permanent residency. Unlike with the US Green Card, applicants must earn a salary that is at least 1.5 times as high as the average in the country where they are applying.
Germany is by far the largest granter of EU blue cards, divvying out nearly 90 percent of the coveted cards, followed by France (3.6 percent), Poland (3.2 percent) and Luxembourg (3 percent).

How can I qualify for a Blue Card?

The card is granted to anyone who has an accredited university degree (you need 180 university credits or högskolepoäng in Sweden’s system), and you need to be offered a job paying at least one and a half times the average Swedish salary (about 55,000 kronor a month).

How long does a blue card take to get after application in Sweden? 

According to the Migration Agency, a Blue Card application is always handled within 90 days, with the card then sent to the embassy or consulate named in the application.

In Sweden ,it is only really worth applying for a Blue Card if you are applying to work at a company that is not certified and are facing a long processing time.

EU Blue Cards are issued for a minimum of one year and a maximum of two years.