A quick Q&A for employers in response to the outbreak of COVID-19

1. What happens if it is not possible for your employees to work from home?

Over the past few weeks, the Swedish Public Health Authority (Sw. Folkhälsomyndigheten) has stated that employers can consider recommending their employees to work from home where it is possible for the employees to do so. Consequently, many employers have recommended or even ordered their employees to work from home. However, where it is not possible for employees to work from home due to the nature of the employer’s business, it is important that the employer comply with the applicable regulations regarding its employees’ working environment. This includes the employer taking adequate measures to prevent its employees from being infected at the workplace. According to the Swedish Work Environment Act (Sw. Arbetsmiljölag (1977:1160)) and the Swedish Work Environment Authority’s (Sw. Arbetsmiljöverket) regulations, employers must systematically plan, direct and monitor activities to ensure a good work environment. The employer must undertake a risk assessment of its workplace and assess, among other things, the risk of infection as well as investigate what safeguards it may need to take. Accordingly, and in order to reduce the spread of the infection in society, it is important for employers to monitor the current recommendations and guidelines. Employers should also clearly communicate to their employees that they should stay at home if they show symptoms (even mild ones).

2. What right does an employer have to order its employees to perform work outside their usual duties and responsibilities?

The economy is already suffering from the outbreak of COVID-19 and many employers need to reduce their staff or temporarily require their employees to perform other tasks to those they would normally perform. A common question asked by employers is the extent to which they have the right to change an employee’s job duties. In Sweden, an employee has a broad obligation to perform work innate to the employer’s business, provided that the work falls within the scope of the employee’s professional qualifications. Ultimately, the employee’s work obligation is determined by the employment contract. The extent of the obligation can be found in the industry custom and practice, the relevant collective bargaining agreement (albeit in rare cases) or the so called “29/29” principle. Under that principle, the employer has the right to distribute the work in such manner it deems appropriate as long as the work ordered does not fall entirely outside the employer’s overall activities or the employee’s competency. In other words, it is possible for an employer to direct its employee to work on tasks that fall within that employee’s work obligation. According to case law from the Swedish Labour Court, the nature of the employment must not be changed to the extent that it is in effect a new position.

3. What right does the employer have to terminate employment agreements if its revenue has significantly diminished?

The rules regarding termination of an employment relationship under the Swedish Employment Protection Act (Sw. lagen om anställningsskydd) have not changed since the outbreak of COVID-19. If there is a shortage of work, the employer may terminate its employees due to redundancy in accordance with the current regulations and, if collective bargaining agreements apply to the industry or the employees are affiliated with a trade union, after negotiation with the relevant trade union.

4. What does “short-term work” (previously known as “short-term furlough”) mean?

Short-term work allows an employer to reduce its employees’ working hours and simultaneously receive support from the state to cover a large extent of the cost of wages. In practice, short term work is introduced by the employer with the support of any applicable collective bargaining agreements. However, if there are no such collective bargaining agreements in place, the employer can enter into separate agreements with the relevant employees. Short-term work will mean a reduction in working hours for a limited period with a slightly lower salary for the relevant employees (further information on short term work and a breakdown of the reduction in hours and costs can be found in question 5 below).

5. What are the eligibility criteria for an employer to introduce short-term work?

Any employer, whether a legal or natural person, who runs a business may be eligible to introduce short-term work. The company must also be able to demonstrate that it is experiencing temporary and serious difficulties in meeting the challenges arising from the outbreak of COVID-19. Such difficulties must be affecting the employer’s business and be caused by circumstances beyond the employer’s control. Additionally, the following criteria must be met:

• If a central or local collective bargaining agreement applies, the short-term work arrangements must follow the relevant terms;
• If there is no applicable collective bargaining agreement, at least 70% of the employees in the operating unit must approve and participate in the short-term work arrangements. The agreed reduction in working hours and pay must apply to all participating employees in the operating unit
• The employer must have taken other available measures to reduce staff costs, for example by laying off employees who are not permanently employed.
• At the time of making the application to implement short-term work, the employer must not be facing insolvency proceedings, undertaking a corporate restructuring or in bankruptcy.

The reduction in working hours can be made at three fixed levels: 20%, 40% or 60% and, if the application is granted, can lead to reduced costs for the employer of 19%, 36% and 53% respectively.

This following table sets out how the costs of short-term work are distributed. Keep in mind that the compensation will apply for salaries up to SEK 44,000 per month, i.e. should an income earner have a higher salary the income will be calculated at SEK 44,000.

More information is published on an ongoing basis on The Swedish Agency for Economic and Regional Growth’s (Sw. Tillväxtverket) website.

6. Is the new support for short-term work available to contract workers/consultants?

As mentioned above, the support for short-term work is available to employers with employees, that is the employer must have been obliged to pay employer contributions during the relevant month for its employees. Consequently, the contract worker’s employer may be eligible for the support, provided that the employer meets the other criteria as set out in question 5 above.