Government proposes stronger protection for fixed-term employees and workers on parental leave

In April 2005, Sweden's minority Social Democrat government and the parties with which it cooperates in parliament proposed new legislation to ensure stronger rights for fixed-term employees and better protection for workers on parental leave. The aim is to both strengthen the rights of individual employees and make the rules less complicated. The proposals are based on recommendations made by a government-appointed labour law commission in 2002.

In November 2002, a government-appointed labour law commission, chaired by Professor Niklas Bruun of the Working Life Institute (Arbetslivsinstitutet), made a number of proposals for changes to existing legislation, including stronger protection for fixed-term employees and workers on parental leave (SE0211104F). The proposals were sent out for consultation and some met with rather sharp criticism. The minority Social Democratic Party (Socialdemokratiska Arbetarepartiet, SAP) government, along with the Left Party (Vänsterpartiet) and the Green Party (Miljöpartiet de Gröna), now recommend that some of the labour law commission’s recommendations should be realised, and in late April 2005 a working group at the Ministry of Industry, Employment and Communications drew up a proposal for amendments to the Employment Protection Act and the Act on Parental Leave (Ds 2005:15 Förstärkning och förenkling - ändringar i anställningsskyddslagen och föräldraledighetslagen). The government intends to present a bill in autumn 2005. The proposal focuses primarily on stronger rights for fixed-term employees and better protection for workers on parental leave. Some of the labour law commission’s suggestions are unaltered whereas others have been revised to some extent.

Strengthened rights for fixed-term employees

An increasing number of Swedish employees are employed for short periods only (SE0312101F). Particularly among groups that have a weaker position on the labour market - such as immigrant groups, women and young people - the phenomenon is growing. A further tendency is that many individuals get stuck in this type of employment. This causes problems of various kinds for the people involved - for example, they may find it hard to get loans from banks or telephone subscriptions. These employees also run the risk of being overlooked with regard to career advancement and skill development, and may be left outside social life at the workplace. Because of these general tendencies, the government and its 'cooperation parties' state that open-ended and indefinite employment should remain the main type of employment.

The three political parties however agree with the labour law commission that some kind of fixed-term employment is necessary and legitimate on the modern labour market. They therefore suggest that the current list of acceptable reasons for fixed-term contracts should be removed and replaced by a general rule allowing fixed-term jobs lasting no more than 12 months (over a period of five years) with the same employer.

This is largely in line with the labour law commission’s suggestions, with two important exceptions. The commission suggested that fixed-term contracts should be allowed for up to 18 months, and that the only exception to this rule should be the possibility to employ for longer periods people as substitutes for absent employees. The present proposal has shortened the time to 12 months - thereby taking on board objections mainly from trade unions - but it also suggests some additional cases when exceptions should be possible. It provides that longer fixed-term employment should be allowed in the following cases: if the nature of the work so demands; if the employee is working as a substitute; and if the fixed-term employee is over 67 years of age. It is argued that people aged over 67 do not need the extra protection since they are free to chose not to work. The other exceptions reflect the working group's view that, considering the wide range of fixed-term employment that exists today, it is not reasonable to believe that all could be included in one general time-limited case. The group has in this case listened to the objections emanating mainly from various employers’ associations.

An enhanced right of preference for open-ended employment is proposed to strengthen the right for employees to become permanently employed after a period of fixed-term employment, should an opportunity arise with their employer. This right would become effective after six months of employment. This is mainly in line with the labour law commission’s suggestions, although this was initially a point heavily criticised by employers and unions alike. A suggested special payment to be imposed on employers breaking the rules has, however, been dropped. Under the commission’s proposal, employers who failed to comply with the rules on employing people on fixed-term contracts would have been made to make a special payment of at least three months' wages to each worker in question. This would also be the case if employers failed to offer open-ended contracts to an employee who had a right to be given preference. This suggestion was more or less unanimously questioned by the social partners and has therefore been dropped. The present text instead suggests that the rules in the Employment Protection Act, which give employees the right to take a case to the courts and force employers who break the rules to pay a fine, should apply.

Stronger protection for workers on parental leave

The working group agrees with the labour law commission on the need for stronger protection for workers on parental leave. The group's proposal states that, although the labour law commission’s investigations pointed to a need for such protection, further reasons have since arisen. These are reports by the Swedish Union of Technical and Clerical Employees in Industry (Svenska Industritjänstemannaförbundet, SIF) and the Equal Opportunities Ombudsman (Jämställdhetsombudsmannen, JämO), an analysis of EU Directive 2002/73/EC on equal treatment, and a political ambition stated by parliament.

According to the working group, a general ban should be imposed on the unfair treatment of workers on parental leave, or of people on parental leave seeking employment. This was also the suggestion of the labour law commission. The two proposals however differ with respect to how the ban should be constructed. The present proposal argues against the commission's suggestion of constructing the ban in the same way as the ban on gender discrimination. Instead the working group proposes stronger employment protection in the Parental Leave Act, such as a broad, general ban on unfair treatment of these individuals. To be treated unfairly could be taken to mean both losing out on better employment conditions and wages, as well as negligence on part of the employer in the treatment of these workers. The working group also proposes removing the qualification period of six months' service for workers to be entitled to parental leave rights, and recommends that the notice period in the event of the dismissal of workers on parental leave should not start until the worker returns to work.

Commentary

The Ministry for Industry, Employment and Communication’s working group has gone some way to meet the criticisms made when the labour law commission launched its proposals in 2002. The new proposal clearly builds on the labour law commission’s suggestions, but the proposed changes to the Employment Protection Act have been revised somewhat, seeking a compromise between the current system and the labour law commission’s suggestions of a modernised and more transparent labour legislation. More technical legal criticisms have also resulted in some alterations to the earlier recommendations.

In the new proposal's list of reasons for the stronger protection for workers on parental leave, the political ambition of the present parliament can clearly be seen. The working group argues that taking parental leave should not be seen as an extraordinary event in working life. Rather, parenthood is a natural part of all employees’ work and life plans and should be taken into consideration by employers when they organise work. The group also argues that more people, women and men, will be needed on the labour market. A strengthening of parents’ employment protection could have positive influences on labour supply.

The proposal is now being sent out for another round of consultations. The three political parties involved presented their proposal in a debate article in the Svenska Dagbladet newspaper on 27 April 2005, signed by Hans Karlsson, Minister of Employment, for the government, together with two members of parliament representing the Left and Green Parties. They end their article by asking all the bodies and organisations to which the proposal has been referred for consideration to take an active part in the discussion. They also state that they will consider all comments on the proposal before presenting it as a bill in parliament. Whether they are listened to and whether they have managed to stay clear of what caused so much criticism last time, remains to be seen. (Ann-Britt Hellmark, Arbetslivsinstitutet)