Redundancy due to shortage of work
What is shortage of work?
Shortage of work is a legal and legitimate reason for termination of employment under the provisions of the Employment Protection Act (LAS). Shortage of work may be due to financial reasons, for example insufficient undergraduate or research grants. It may also be a result of an employer’s decision to reorganise or reallocate resources, for example by closing down a certain department or winding down certain activities. Such reorganisation or reallocation may occur for reasons other than a lack of financial resources.
Shortage of work does not necessarily have to be because there is not actually enough work to do. It can also be due to the employer wanting to organise work in a different way. The key thing to bear in mind is that the reason for the termination is not directly related to the employee personally.
Priority rules for employees during redundancy due to shortage of work
If it becomes necessary to make employees redundant due to shortage of work, the agency/higher education institution is to establish a priority or seniority list. This means that the employer must identify those employees at risk of redundancy and, in negotiation with the trade union, create a priority list in accordance with the provisions of the collective agreement and the Employment Protection Act. According to the TurA-S central collective agreement, each of these groups must include employees at the higher education institution who have working tasks which are “essentially comparable” with the tasks to which the shortage of work refers. The concept of “essentially comparable tasks” is to be interpreted broadly. The decisive factor when forming these priority groupings is the actual tasks performed by the employee, not the employee’s job title.
The employee’s total employment time with state employers, including employment with other state agencies, then determines the employee’s place on the seniority list. Employees with longer periods of employment have priority claims to continued employment over those with shorter periods of employment. Where employees have equal periods of employment, higher age gives priority to continued employment.
From 1 October 2022, an employer in the state sector may also exempt a maximum of three employees from the order of priority if the employer deems those employees to be of particular importance to its operations. Such a decision cannot be challenged legally, other than in cases of discrimination according to the Discrimination Act or equivalent. The employer may only make such an exception once in a six-month period, regardless of whether one, two or three employees were exempted. In such cases, the employer is defined as the entire higher education institution and not, for example, an individual department.
In the private sector, the rules regarding priority or seniority lists specified in Section 22 of the Employment Protection Act (LAS) apply. There may also be additional rules governing priority in central collective agreements, such as those in the Arbetsgivaralliansen (Employers’ Alliance) Sector and Salary Agreement for Higher Education. The Act states that priority lists are to be drawn up according to operational unit, collective agreement area and location.
Unless otherwise agreed in a collective agreement, from 1 October, 2022, Section 22 of the Act stipulates that, regardless of the number of employees, the employer has the right to exempt from the priority list a maximum of three employees who it deems to be of particular importance to continued operations. Such a decision cannot be challenged legally, other than in cases of discrimination according to the Discrimination Act or equivalent. If the employer has made such an exception, no new exceptions may be made in the event of a termination that takes place within the following three months. This applies regardless of whether the employer previously exempted one, two or three employees.
There are no legal and legitimate grounds for shortage of work if it is reasonable to require the employer to offer the employee another position within the organisation. This means that the employer must thoroughly investigate the possibility of redeploying the employee before redundancy is permitted. At state sector higher education institutions, the redeployment requirement applies across the entire range of the institution’s activities, even if it has more than one site. In the private sector, the redeployment requirement applies across the employer’s entire operations.
A prerequisite for redeployment is that the employee has sufficient qualifications for the position to which they are to be redeployed. The basis for assessing whether someone has sufficient qualifications is the eligibility requirements set out in the Higher Education Ordinance and other relevant regulations, e.g. the collective agreement. Being sufficiently qualified does not mean that the person needs to be the most qualified candidate for the position in question; it is enough to have sufficient qualifications. An employee is considered to be sufficiently qualified even if they need a normal learning period of up to around 6 months to be able to perform the new tasks.
The redeployment requirement covers any position that the employer knows at the time of redundancy will be available in the period up to the time when the proposed termination becomes effective. The termination takes effect when the redundancy notice period expires. If an employee refuses a reasonable offer of redeployment, the employer has a valid reason for redundancy. As a general rule, redundancy takes place when the employee receives notice of the termination (redundancy notice). The redundancy notice must be given in writing.
Find out more about the notice periods that apply when redundancy notice is given due to a shortage of work.
If you are made redundant due to a shortage of work, you may be entitled to transition support:
- state sector, you can also find information at the website of The Swedish Agency for Government Employers (in Swedish),
- private sector,
- municipal sector.
Preferential right to re-employment
An employee who has been made redundant due to shortage of work has a preferential right to re-employment under certain conditions.
In order to be entitled to re-employment, you must have been employed by the employer for a total of more than twelve months during the past three years.
For the preferential right to re-employment in new special fixed-term employment, it is sufficient to have been employed at the same employer for more than nine months in the past three years. The same applies if you have general fixed-term employment on or after 1 October 2022.
State sector employees may count all employment in the state sector in the past three years.
Another requirement is that the employee is sufficiently qualified for the new position, (see above under the Redeployment requirement). The employee must also have notified the employer that they wish to exercise their preferential right to re-employment. The right to re-employment applies from the date that notice of termination was given, (normally when the employee received the redundancy notice), and continues for nine months from the date of termination, i.e. from the date the notice period expired.
If an employee who has been made redundant claims their preferential right to re-employment and the other conditions are met, (see above), the higher education institution must take this into account when making decisions on recruitment to any positions covered by the employee’s claim.
Preferential right to re-employment in the state sector
The preferential right to re-employment is not defined in the same way in the state sector as in other parts of the labour market. In the state sector, the person with a preferential right to re-employment has no absolute precedent over other candidates. The right to re-employment constitutes valid grounds that can be taken into account alongside formal qualifications and competence. For employers that are not state agencies, the right to re-employment is stronger, in line with the rules that apply in other sectors of the labour market.
Trade union influence in processes of redundancy due to shortage of work
Section 11 of the Co-determination Act (MBL) states that the employer is required to negotiate with the local trade unions if it is necessary to take measures that may lead to a reduction in the number of employees. The requirement to negotiate applies before the employer can make decisions through the entire redundancy process, i.e. before decisions regarding operational change and staff reduction; decisions on the formation of groups subject to order of priority rules and exemptions to these; decisions on redeployment; and decisions on redundancy of individual employees. If the employer wishes to exempt certain employees from the priority list, the employer is to provide an explanation of why it deems the employees it wishes to exempt to be essential for its continued activities.
Through this negotiation requirement, the trade union is able to influence the decisions that are made. However, it is the employer who has the right to make the final decision if there are areas of disagreement.
What happens if someone thinks that the redundancy decision is wrong?
If a redundancy is handled incorrectly, SULF may call for a dispute resolution negotiation with the employer and claim damages for members of the union who are affected. In some cases, SULF can request that the termination of a SULF member’s employment be declared invalid.
If you suspect that you have been made redundant incorrectly, you should contact your local trade union representative, who in turn will contact the SULF Central Office for a full assessment and possible commencement of a dispute resolution negotiation.