Failure to agree new Swedish labour laws

An attempt to get Swedish unions and employers to reach agreement on revised employment protection legislation appeared to have ended in failure last month, when LO, the country’s largest union confederation rejected the plan.

LO chair Susanna Gideonsson announced the decision on 16 October. But the background to the negotiations is political and lies in the formation of the January 2019 Swedish government.

With no majority in parliament after the 2018 elections, the Social Democrats and the Greens agreed to make changes to Sweden’s employment protection legislation to win the Centre Party and the Liberals to the formation of a new government.

An investigation on the issue was launched in 2019 and reported with a series of recommendations earlier this year.

These included weakening the last-in first-out rules for redundancy and removing the right in small companies (15 employees or fewer) to be reinstated if a dismissal for personal reasons was found to be unfair.

In larger companies, employees can be reinstated if the dismissal is unfair but, while the case is being investigated, they cease to be employed (and paid) by the company.

The government asked the two sides to begin negotiations on a possible solution. It is these negotiations that have now failed.

Under the deal with the Centre Party and the Liberals, the government should now bring in the recommendations made in June, but it is far from clear that this will happen.