EMCC European Monitoring Centre on Change

Sweden: Selection of employees for (collective) dismissals

Sweden
Phase: Management
Type:
Selection of employees for (collective) dismissals
Last modified: 22 July, 2021
Native name:

Lag (1982:80) om Anställningsskydd

English name:

Employment Protection Act (1982:80)

Article

22

Description

Under the order of priority rules, employees with a longer period of employment have priority to stay in the company over employees with a shorter period of employment. This is commonly referred to as the ‘last-in-first-out’ principle. Based on the aggregate period of employment within the organisation, a seniority list is drawn up for each unit and for each group of employees who belong to the same collective agreement. If employees have an equal length of employment, priority to stay is given to the older employee. 

One important condition for continued employment is that the employee has sufficient qualifications for one of the alternative posts left in the unit after the structural reorganisation. However, according to the law, the employee only needs to fulfil certain minimum requirements, i.e. they do not have to be the best suited for a particular post to be entitled to continued employment. An organisation with up to 10 employees may exempt a maximum of two employees from the last-in-first-out principle, if they are of particular importance to operations.

Workers with disabilities and union representatives usually enjoy special protection against being chosen for redundancy. Selection based on sex, nationality, union membership or similar grounds is illegal.

Comments

If there is a collective agreement in place, the parties are allowed to stipulate other criteria than in the Employment Protection Act. Most importantly, upon the announcement of the dismissals, further derogations may be agreed upon by the employer and the local union. As the employer often will want to dismiss employees by other criteria than in law or collective agreement and the unions are free to agree on any (non-discriminatory) alternative selection, this provides the union with a very strong negotiating lever. This may be to, for example, secure compensation for older dismissed workers. If there is no collective agreement at the affected workplace, the employer must act in accordance with the order of priority rules as stipulated in the Employment Protection Act. 

The order of priority rules have for many years been grounds for conflict between the unions and the employers' organisation. While the unions regard the regulation as crucial for protecting older workers, many employers organisations, such as the Confederation of Swedish Enterprise, argue that because of the first-in-last-out principle, many companies are left without the level of competence needed for future operations after restructuring. Furthermore, the Confederations argues that the order of priority rules are one of the main reasons why employers hesitate to employ more workers.

Cost covered by
Not applicable
Involved actors other than national government
  • Employer organisation
  • Trade union
Thresholds
No, applicable in all circumstances
Sources
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