Navigating Employee Termination and Notice Periods in Sweden

Sweden's Employment Protection Act (Lag om anställningsskydd) outlines clear procedures for terminating employment contracts. Employers must follow strict guidelines to ensure compliance and fairness. There are two primary methods for ending an employment relationship: termination with notice and summary dismissal. Termination with notice is the standard approach, requiring valid grounds, which fall into two categories: personal reasons and redundancy.

Personal reasons include misconduct, unauthorized absences, lack of cooperation, or disloyalty. Employers must provide at least two weeks' notice to the employee and their relevant trade union. If the employee or union requests negotiations, termination cannot proceed until discussions conclude.
Redundancy arises from business needs, such as reduced operations or restructuring, unrelated to the employee's performance. Employers must initiate negotiations with the involved trade unions before making a final decision.

Termination notices must be delivered personally and in writing, detailing the employee's right to challenge the decision. For redundancies, the notice should inform the employee of re-employment rights. If requested, employers must provide a written explanation for the termination.

The termination becomes effective upon the employee's receipt of the written notice. If personal delivery isn't possible, mailed notices take effect upon receipt or within 10 days of sending. If the employee is on vacation, termination takes effect no earlier than the second day after their return.

Understanding Notice Periods in Sweden

Notice periods define the interval between notification and the end of employment. For permanent employees, statutory notice periods based on tenure are:

Years of Service	Notice Period
Less than 2 years	1 month
2–3 years	2 months
4–5 years	3 months
6–7 years	4 months
8–9 years	5 months
10+ years	6 months

During the notice period, employees are entitled to reasonable time off for job hunting while retaining benefits. Note that employees aged 67 or older have a maximum notice period of one month and no re-employment priority.

Severance Pay in Sweden

Swedish law does not mandate severance pay unless specified in employment contracts or collective agreements. Employers should review these documents carefully to avoid disputes.

Consequences of Wrongful Dismissal

If termination lacks valid grounds, employees can challenge it within two weeks. Courts may invalidate the dismissal, and if the employer refuses compliance, the employee is entitled to compensation based on tenure:

Less than 6 months of service: 6 months' salary
Up to 5 years of service: 16 months' salary
5–10 years of service: 24 months' salary
Over 10 years of service: 32 months' salary

Termination Process Overview

Employers should adhere to this structured process:

Notification: Inform the employee's trade union in writing, stating the reason for termination.
Delivery: Provide a written notice directly to the employee, including grounds and appeal rights.
Negotiation: Address any objections from the union or employee before proceeding.

Unemployment Benefits in Sweden

Sweden follows EU regulations on unemployment support, offering basic insurance, income-based benefits, and additional allowances. Eligibility requires registration with the Swedish Public Employment Service (Arbetsförmedlingen) on the first day of unemployment.

Eligibility Criteria

General: Register as a job seeker and apply through the relevant insurance fund (e.g., for teachers, engineers).
Work History: Must have worked at least 6 months in the past year, with minimum hourly requirements.
Additional Requirements: Submit a job search plan and activity reports, demonstrating availability for work.

Benefits begin after a 6-day waiting period. For example, a tech professional laid off after 4 years would receive income-based support while seeking new opportunities.

Benefit Entitlements

Basic insurance pays up to 510 SEK daily, while income-based compensation covers 80% of previous earnings for 200 days. Support grants are also available through the employment service.

For expert guidance on managing terminations in Sweden, SailGlobal offers tailored legal advice and end-to-end HR solutions to ensure compliance and minimize risks.

Sweden Employee Termination Guide: Notice Periods, Severance & Legal Compliance