Sweden's employment system facilitates company restructuring despite strong union protections. Companies facing financial issues can justify layoffs using 'sakliga skal', meaning 'objective reasons', categorized as 'arbeitsbrist', or shortage of work. This can include decisions to move operations overseas. Companies must issue a 'varsel' or notice to the Public Employment Service, detailing reasons and affected workers. Negotiations with union representatives are mandatory before finalizing redundancies, ensuring that unions are involved in the process for any layoffs to occur legally.
Under Swedish employment law, companies cannot make people redundant without so-called sakliga skal, or 'objective reasons'. These reasons fall under 'arbeitsbrist', or shortage of work.
When a company decides to make layoffs, it issues a varsel, or 'notice', to the Swedish Public Employment Service, detailing reasons, number of employees affected, and redundancy period.
Union representatives have the right to receive a copy of the varsel notice, and the employer must negotiate redundancies under the co-determination law before finalizing any layoffs.
In Sweden, companies can cite 'arbeitsbrist' to justify layoffs, irrespective of their profitability, allowing them to reorganize without facing an immediate financial crisis.
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