Originally published February 2010
Amendments To The Annual Leave Act (1977:480) (The "Act") As Of 1 April 2010
A number of amendments to the Act are due to come into force from 1 April 2010. The purpose of the amendments is to simplify the application of the Act. The key changes are as follows:
- A new calculation rule for holiday pay is introduced as the principal calculation rule with respect to employees with fixed wages;
- The current percentage rule used for calculation of holiday pay is maintained but simplified;
- Employees absent due to sickness or occupational injury will be entitled to holiday pay for a period of one full qualifying year instead of two full qualifying years;
- The rules regarding earning the right to be paid holiday during absence due to temporary parental allowance are simplified;
- The rules regarding the period during which employees with fixed-term contracts earn entitlement to paid holiday are changed;
- The specific rules applicable to employees working from home or so-called "uncontrolled employees" are abolished; and
- Only a limited number of days of annual holiday with pay can be paid in lieu to employees, should employees be unable to actually take the time off.
REPORTED CASE LAW
Case No. A-268-04, Ref. No. 89-09 - The Lavalcase (Vaxholm) – Damages Due To Collective Actions
In December 2007, the European Court of Justice (the "ECJ") held that the collective action taken by trade unions was in violation of Community laws. The Swedish Labour Court (the "SLC") has now passed its ruling with respect to the question of damages.
Background
In May 2004, Laval, a Latvian company, posted workers from Latvia to work on building sites in Sweden. The work was carried out by a subsidiary, L&P Baltic Bygg AB ("Baltic Bygg"), and included the renovation of school premises in the town of Vaxholm.
In June 2004, Laval and Baltic Bygg, on the one hand, and the Swedish building and public works trade union, Svenska Byggnadsarbetareförbundet, on the other, began negotiations in order to determine the rates of pay for the posted workers and to make Laval sign the collective bargaining agreement for the building sector. However, the parties were unable to reach an agreement. Instead, Laval signed a collective bargaining agreement with the Latvian building sector trade union. The Swedish union then initiated collective action in the form of a blockade of all Laval's sites in Sweden. The Swedish electricians' trade union joined in with a sympathy action. Due to these actions, the work was stopped. Baltic Bygg was consequently declared bankrupt and the posted workers returned to Latvia.
Laval brought proceedings before the SLC for a declaration as to the lawfulness of the collective action and for compensation for the damage suffered. For this reason, the court asked the ECJ if community law precludes trade unions from taking collective action in the circumstances described above.
The Ruling Of The ECJ (December 2007)
The court accepted that the right to take collective actions must be recognised as a fundamental right which forms an integral part of the general principles of Community law, but that the exercise of that right may be subject to certain restrictions. In this case, the court pointed out that the right of trade unions of one Member State to take collective action forcing undertakings established in another Member State to negotiate certain terms and agreements is liable to make it less attractive, or more difficult, for such undertakings to carry out construction work in Sweden. This was held to constitute a restriction on the freedom to provide services. The court also pointed out that the action cannot be justified by overriding reasons of public interest.
The ECJ held that certain Swedish national rules amount to discrimination against non-national undertakings. These rules fail to take into account collective agreements which undertakings posting workers to Sweden are already bound by in the Member State in which they are established. Under these rules, such undertakings are treated in the same way as Swedish undertakings which have not concluded a collective agreement. The ECJ held that these rules give rise to discrimination against such undertakings. Such discrimination cannot be justified as the purpose of these national rules does not constitute grounds of public policy, public security or public health.
In response to the ECJ's judgment in this case, the Swedish Government has made a decision on a proposal concerning certain amendments to Swedish employment legislation. It has proposed that the amendments should come into force on 1 April 2010.
The Ruling Of The SLC Regarding Damages
The SLC held that the trade unions could be held responsible for violations of Community law and that the action taken by the trade unions was unlawful. The trade unions were held liable to pay general damages to Laval un Partneri Ltd ("Laval") amounting to SEK 550,000. Laval's request for damages resulting from financial loss was, however, rejected as Laval had not succeeded in proving the amount of the financial loss it had suffered as a result of the trade unions' actions nor in presenting sufficient data in order for the SLC to estimate this loss.
Case No. A-250-08, Ref. No. 3/10 - An Employer Can Give Notice Of Termination To An Employee In Order To Adjust A Full-Time Position To A Part-Time Position When The Employee's Working Capacity Has Been Permanently Reduced
In this case, the Swedish Social Insurance Agency (Sw. Försäkringskassan) established that an employee's capacity to work was permanently reduced by a quarter when the employee was granted sickness compensation to a corresponding extent. Due to this decision, the employer wanted to adjust the employment to a part-time position covering 75% of the employee's original full-time position. When the employee refused this adjustment, the employer gave notice of termination with respect to the full-time position and, again, offered the employee a part-time position on identical conditions which the employee later accepted. The question that the Labour Court had to consider was whether the dismissal from the full-time position was based on objective grounds.
The Labour Court held that the interests of the employee must be balanced against those of the employer. The employer's wish was to terminate the employee's full-time employment, and the employee wished to maintain his full-time position. It was clear that the employer's purpose was not to end the employee's employment but to adjust the full-time position to the employee's actual working capacity, i.e. to 75%. The Labour Court held that the employer's interest in adjusting the position to the employee's actual working capacity prevailed over the employee's interest in keeping the full-time position. The dismissal was thus held to have been based on objective grounds.
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