What's the background?
Sweden's Employment Protection Act is currently 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.
The centre-left Social Democrat-Green coalition agreed to order the inquiry as part of the so-called January Agreement, a deal drawn up between the government and the two centre-right Liberal and Centre parties in 2019 to put an end to post-election deadlock.
Negotiations between the unions and businesses to fine-tune the details of the inquiry's proposal broke down this month, which means that the issue is now in the hands of the government. According to the rules of the January Agreement, the government is supposed to put forward its own bill to parliament.
Centre Party leader Annie Lööf and Liberal leader Nyamko Sabuni. Photo: Jessica Gow/TT
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What's the row all about?
The issue was one of the most hotly debated topics at public broadcaster SVT's party leader debate on Sunday evening, which also saw the party leaders debate crime, environment and elderly care.
The Left Party is unhappy with the proposals, which outgoing leader Jonas Sjöstedt called “the greatest deterioration of employment protection in modern times”. Critics of the proposals argue that throwing out the current rules and giving managers a greater say in which employees to let go risks making layoffs too easy and arbitrary.
Those in favour of changing the rules – specifically the so-called “last in, first out” tradition – argue that the current rules lead to less labour market mobility, flexibility and growth, and mean that the highest performing individuals are not necessarily those who keep their jobs in times of difficulty.
It should be noted that the government itself is not entirely happy with the inquiry's proposals.
Prime Minister Stefan Löfven has said that he will attempt to work out a bill that is “more balanced” between employers and unions, which he said was “the core of the Swedish model”, and ideally that those two groups should continue negotiations among themselves in the meantime.
Left Party leader Jonas Sjöstedt. Photo: Jessica Gow/TT
What's the government crisis?
The Left Party has threatened to put forward a vote of no confidence in Social Democrat Prime Minister Löfven's government if he decides to push ahead with the proposals. The Left has gained three unlikely allies on the opposite side of the political spectrum: the Moderates, Christian Democrats and Sweden Democrats.
The three right-wing parties are not necessarily opposed to changing employment protection and making the “last in, first out” rule more flexible, but what they do want is a chance to bring down the government.
Löfven does not have enough support in parliament without the tacit backing of the Left Party, so those four parties together would have a majority for a vote of no confidence.
At least 35 members of parliament must propose a no-confidence motion to parliament in order for a vote to take place. A minimum of 175 of its 349 MPs must vote for the motion in order for it to pass. If parliament passes a no-confidence motion against the Prime Minister, the entire government must resign or call a snap election.
Sweden's eight party leaders. Photo: Jessica Gow/TT
How likely is this to actually happen?
It's currently in the hands of the Left Party, which is in a tricky situation because it dislikes the thought of any threats to employment rights, but all in all much prefers Social Democrat Löfven to the right-wing opposition.
And the Left Party is now looking increasingly like it is backing away from its pledge, with Sjöstedt during the debate on Sunday giving Löfven more time to resolve the issue. “We think it will take a couple of weeks,” he said.
By that time, Sjöstedt will no longer be the leader of the Left Party – he is stepping down at the end of October to be replaced by Nooshi Dagdostar. She has vowed to press ahead with the motion, but the general talk among Swedish politics pundits seems to be that a new party leader would take a less confrontational stance.
So as of Sunday, the threat of a government crisis and potential snap election looks less likely.
It is important to remember that a vote of no confidence has been held in the Riksdag 11 times in Swedish history, and none of them have been successful. Löfven and/or his cabinet ministers have already survived six such votes. And even if he were to lose, it is unclear who would have enough support to take his place.