New act grants workers leave of absence to start own businesses

On 1 January 1998, a new act came into force in Sweden which grants employees six months' leave of absence in order to start or work in their own businesses.

Swedish employees are entitled to leave of absence for a number of reasons, and the Government's plans to introduce yet another one - for starting or working in their own businesses - were not met with overwhelming enthusiasm when they were made public in spring 1997. The Swedish Employers' Confederation (Svenska Arbetsgivareföreningen, SAF) and the National Agency for Government Employers (Arbetsgivarverket) objected, and the Swedish Trade Union Confederation (Landsorganisationen, LO) doubted that there was a need for an act of the kind proposed.

The Government, however, adhered to its plans. The aim of the proposed legislation was to promote growth and employment by supporting the establishment of new enterprises. By giving workers the opportunity to try to set up their own business for a period without risking their employment the Government hoped that more workers would be prepared to take the risk. This would in turn create temporary vacancies in the business of the employer, which could be filled by other workers who were seeking employment.

In November 1997, Parliament passed the bill. Thus from 1 January 1998, an employee who has been with the same employer for the last six months, or 12 months during the last two years, is entitled to six months' leave of absence in order to start or to work in his or her own enterprise, provided that it does not compete with the employer's business and that the leave does not cause substantial difficulties for the employer.

A worker who wishes to take advantage of this opportunity shall inform the employer at least three months in advance. If the worker later on informs the employer that he or she wishes to return to work earlier than agreed, the employer has to comply with this and must not postpone the return of the worker for more than one month after being informed.

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