Podd: Redundancy – the entire episode transcribed

Ann Hallsenius
A warm welcome to Almegapodden. We hope that this podcast will provide you with quick insights and that we can clarify what can be done in various labour law issues so that it becomes easy for you to follow Swedish rules and regulations. A very warm welcome to Almegapodden. This episode will be in English. My name is Ann Hallsenius and I’m your host. And today we’re diving into a topic that may affect many professionals at some point in their careers, namely redundancy. I have two guests that are legal advisors, experts in labor law and give day to day service and advice to our member companies. So very welcome. Jakob Stenblom.

Jacob Stenblom
Thank you.

Ann Hallsenius
And Christine Sorselius.

Christine Sorselius
Thank you.

Ann Hallsenius
Glad to have you in the studio with me because you’re the expert, I’m not. But now I think we’re ready to explore how redundancy works under Swedish employment law. So listeners, grab a coffee and let’s get started. My first question goes to you, Jakob. If you could explain to me what is redundancy in the context of Swedish employment law?

Jacob Stenblom
Redundancy in the Swedish legal context refers to the termination of employment due to organizational reasons. This could be for example, restructuring, downsizing or other changes that make a position no longer necessary within the company. It’s important to note that redundancy is not about the employees performance or behavior. It’s about the needs of the companies or future organization. In Sweden you need objective reasons to terminate unemployment, which could be either personal grounds or as we’ve got the topic of today’s podcast, redundancy.

Ann Hallsenius
So this is from the perspective of the company. Do you often get these questions? Is this a common thing?

Jacob Stenblom
It is, unfortunately, because it’s often very tough questions for the companies to handle. It’s very much many emotions within the process of redundancy, both for the employer and of course for the employees.

Ann Hallsenius
So it’s good to have some help.

Jacob Stenblom
It is. It is. Because it could be tough both legally and emotionally.

Ann Hallsenius
I understand. So you talked about objective reason. What could that be?

Jacob Stenblom
Typically when we talk about objective reason in terms of redundancy, it could be personal grounds. That is not today’s topic. But we talk about redundancy. It’s typically economical or organizational changes that require reductions in staff. It’s the employer who decides the organization and there is no obligation to prove, for example, that you having a minor assault or red figures, for example. It’s a company who decides how the organization is going to be organized and how many people you have employed. However, if there is a vacant position which the employee can be reassigned to, there are no objective reasons for termination. So that’s like a very important step to go through in the process if you have any open positions.

Ann Hallsenius
So as you’re telling me, it starts out with the company’s or the employer’s need to reorganize or maybe downsize. But then there are certain obligations before terminating an employee due to redundancy. How does that work is then?

Christine Sorselius
Yeah, there are a few key responsibilities. Before an employee can terminate an employee due to redundancy, an employer needs to look into reassignment options first. They need to consider whether the employee can be reassigned to another vacant position position. And this should be reviewed within the entire company, in all business units within the same legal entity. And the reason for this is to see if it’s possible to avoid termination of employees. The offer reassignment needs to be a reasonable offer, preferably an equivalent position if possible, but at least reasonable. And if there are multiple vacant positions within the company, it is the employer who decides which position the employee should be offered. So in this stage, there is no last in first out principle. But if there are no vacant positions, then the last in first out principle applies according to the priority list.

Ann Hallsenius
So the first thing they need to assess as an employer, they need to see if there are any vacant position. Is that so?

Christine Sorselius
Yeah, yeah, that’s correct. Because as Jakob said, there is no objective reasons if you have a vacant position position which you can reassign a person to. But before the employee can take a decision of important matters and also regarding redundancy, they need to conduct negotiations or consultations with the relevant unions first. So that is an important step. But I often recommend employees, they need to sort of do their homework before they request negotiations with union to see if there are any vacant positions and see how it all plays out before they enter into negotiations.

Ann Hallsenius
So it’s important to get the broader picture. You need to look at all the details here.

Christine Sorselius
Yes, correct.

Ann Hallsenius
Well, I think Christine mentioned the last in first out principle. Jakob, what is that?

Jacob Stenblom
The last in first out principle is a classical principle within Swedish employment law. The last in first out principle means that employees with the shortest total employment time are the first to be made redundant in case of redundancy. So if you have no suitable vacant position available, the employer must review the priority list at the relevant workplace and apply the last one in, first one out principle. So basically it means that if you have someone with a longer employment time, total employment time, they should keep the job before the employee with the shorter employment time.

Ann Hallsenius
So is this a well known principle you implied that people know about this?

Jacob Stenblom
Yeah, it is. It is 16 first in Swedish.

Ann Hallsenius
Even with international companies?

Jacob Stenblom
I think so. I think when we get questions about it, they have heard about these principles. Some of the companies get shocked when they hear about it. But still, I think if you worked with Swedish labor law for some time, you know this principle. But yeah, the problem is often that you first need to go through the first step that Christine mentioned to look at the available positions. Then you go to the order of priority. And it’s a difference here that we have Christine mentioned before. When you look at vacant positions, you look at the entire company, you look at the whole entity, organizational number, whether you have any vacant position. The order of priority and the last one in first wide out principle only applies to the workplace and the collective bargain agreement area.

Ann Hallsenius
Ah, so there’s a difference there. You need to keep these things in your mind when you do the bigger picture.

Jacob Stenblom
Exactly.

Ann Hallsenius
So if you assign an employee to another position, are there any specific requirements when you do that for this position or for the employee?

Jacob Stenblom
Yes, that’s correct. Employees need to have sufficient qualifications, meaning that they can meet the job requirements or learn them within a reasonable time. And job requirements can be, for example, education, experience and so on. And it’s the company who decides what kind of requirements you have for that specific role. But as an employer you must allow a period of on the job training before you meet the requirements, up to maximum of six months. It could be shorter also as well. But if the for example, the employee has the correct education for the role but doesn’t have the sufficient experience, you need to give them some time to.

Ann Hallsenius
Learn the role, to adjust to a new role.

Jacob Stenblom
Exactly. When you make the assessment whether the employee has the sufficient qualifications for the role, and it’s important to be aware of that the employer has to burn off proof whether someone has the sufficient qualifications or not. What the employer claims, the employer needs to be able to prove. So you need to feel secure that you can prove in a negotiation or in court that the redundant employee didn’t have the sufficient qualifications for this vacant role or a role in the order of priority which you. Which are saying that the employee can’t claim. So you need to feel secure that you can prove it.

Ann Hallsenius
And in this case it’s also within the larger company, the entirety of the company.

Jacob Stenblom
Yeah. When it comes to vacant positions. Yes. You have to look at the whole company. Do we have any vacant positions that this person have the sufficient qualifications for. And if your answer is no, you need to prove it. And in insufficient review of sufficient qualifications, for example, if you don’t offer a vacant position and the court, they come to this conclusion that this person did have sufficient qualifications, that could be grounds for nullification of the whole termination of employment. So it’s important to make this assessment to feel secure that we as a company can prove that this employee didn’t have the sufficient qualifications for this role.

Ann Hallsenius
You said before, Kristin, you need to do your homework. And this really sounds like you really do.

Christine Sorselius
Yes, yes, absolutely.

Ann Hallsenius
If we go back to the last in, first out principle, is there any possibility for the employer to make exceptions to the priority list?

Christine Sorselius
Yes, there is. All companies actually may exempt up to three employees from the priority list. According to the law, the choice of who to exempt cannot legally be questioned, but of course it cannot be for discriminatory reasons or if it’s a violation of freedom of association. But other than that, it’s the employer that decides who to exempt from the priority list.

Ann Hallsenius
And this rule, why was this put in place?

Christine Sorselius
Well, the reason is, of course, that with the last in, first out principle, key employees from the business could be terminated. And this is a way to avoid that, to be able to keep key people in the business.

Ann Hallsenius
So for small or big organizations, this could be vital.

Christine Sorselius
Exactly. And previously the law allowed companies of maximum 10 employees to be able to exempt, but this has now been extended. So this applies to all companies because.

Ann Hallsenius
This is so important.

Christine Sorselius
Yes, yes.

Ann Hallsenius
So is there a difference between the law and the collective agreement here?

Christine Sorselius
Yes, as a matter of fact, if you are bound by a collective bargaining agreement, and thus also bound by the main agreement, the companies have even more favorable rules. But first, the parties on the labour market have agreed that companies should try to reach an agreed priority list first. And this is a negotiation with unions to agree on who should be terminated and who should be kept. Set aside the priority list. So this is a very important part. But if it’s not possible to come to an agreement with the unions, because this is not always so easy, then the companies can of course, use the exemptions. And if you’re bound by a collective bargaining agreement and the main agreement, you have three exemptions by collective agreement area, as opposed to three in total and also workplace.

Ann Hallsenius
So the law says you can make exceptions for three in total, but if you are bound by collective agreement, you can make exceptions for three per area.

Christine Sorselius
Exactly. Three per collective agreement area and workplace. So if you have both blue collar workers and white Collar workers. It’s actually three each, so in total, six employees.

Ann Hallsenius
So there’s a bigger scope of the agreement than within the law.

Christine Sorselius
Yeah, correct. There’s another rule that we’ve agreed between the parties on the labor market and that is if you only have one workplace, you can have four exemptions. So instead of three, then you have four exemptions per collective agreement area and workplace.

Ann Hallsenius
So you need to keep in mind what kind of workplace, if you have a collective agreement or if you don’t. So it’s a lot to keep in mind.

Christine Sorselius
Yeah, there are quite a few things to keep in mind, but we’re here to help and give advice to our member companies.

Ann Hallsenius
And I know that you often have to teach our companies about what happens after the redundancy has taken place, what happens afterwards. The former employees still have some rights.

Jacob Stenblom
Yeah, that’s correct. An employee who has been made redundant may have so called preferential right to re employment. And to qualify for that, an employee must have worked at least 12 months in the last three years at the company, be qualified for new role. We talked before about sufficient qualifications. It’s the same assessment here. And also claim his or her right to this preferential right to re employment. And if someone has claimed their right to preferential right to re employment, it applies through the notice period and for nine months thereafter. So it’s the employer’s responsibility to keep track of this and contact the former employees if they are about to hire someone in a vacant position where this former employee has sufficient qualifications for the role. So for the notice period and nine months thereafter, you have to. When you’re about to make new recruitment, you need to consider this former employee.

Ann Hallsenius
So you really need to keep track of your former employees then as a company.

Christine Sorselius
And even if you know that they have taken another job, you still need to ask the person if they qualify and as Jakob said, have sufficient qualifications.

Jacob Stenblom
Before we talked about. Okay, when we talked about vacant position, reassigned to vacant position, that applies for the whole company. The preferential right to re employment is the same as we talked about the order of priority. It only applies for the same workplace. You worked at the same collective bargaining agreement area.

Ann Hallsenius
So here we are in the smaller picture, not the whole company.

Jacob Stenblom
We are.

Ann Hallsenius
Yeah.

Christine Sorselius
Can I just add something to the exemption? Because it’s very important. There is a rule against misuse for this rule. And this means that you can only exempt employees with once per quarter. Regardless of how many employees you exempted, you have to wait another three months before you can exempt again. If for instance you have a redundancy within a three month period. So it’s important to plan ahead because it’s not possible to keep or save exemptions for later.

Ann Hallsenius
So if you’re in a period of reorganization, you have to think it through before because this can only be used per three month period. This is a lot to take in. I hope when we wrap up this podcast on redundancy that you listeners have a little bit clearer understanding of your employer rights and your employer responsibilities in this area. As always, we advise our members to look up information with Almeiga’s digital service arbitzilverguiden se Alma where you can find information checklists and other useful tools as well as online courses. You do online courses in English in this on this subject?

Jacob Stenblom
We do, we do. We currently planning an E Learning, for example, in that. And I also want to really, really push you to look into our step step by step guide in terms of redundancy that we have on Abbott silverguiden. It’s very good because as we talked about during this podcast, it’s a lot of steps you need to go through and not to just to make sure that you don’t forget anything. Check that Step by step guide. It’s very good.

Christine Sorselius
Yeah. And most of the guide is in Swedish, but we have translated the step by step guides both in terms of if you’re bound by the law or bound by the collective agreements.

Ann Hallsenius
That’s very good advice, I would think, from you. You listen to Swedish companies and international companies all the time and help them with this. So please do not miss Albiciewa Gaiden Pantessi.

Christine Sorselius
And of course they can call us and get advice.

Ann Hallsenius
Yes, if you’re a member.

Christine Sorselius
Right.

Ann Hallsenius
If you’re a member. Correct. And on Almega.se you’ll find information and its associated organizations on how to become a member. If you’re not yet a member, we will help you in English or in Swedish. And we also hope that you will listen to more of our podcasts in the Almegapodden series. Most of them are in Swedish, but we plan to do some more in English. And you will find Almegapodden where podcasts are found normally with this. I thank you for very much for listening and thank you for sharing your expertise with us today. Kristen and Jakob, thank you. Thank you so much.