The reform aims at adapting the legislation to the changed needs of the labour market and at implementing the collective agreement signed in late 2020 by the unions (PTK, IF Metalls och Kommunal) and the Federation of Swedish Enterprises.  

Following this agreement, the government appointed a team of investigators to explore how the three main aspects of the agreement could be implemented by means of a law applicable to all Swedish employers and employees, including fixed-term employees. These three areas are: 

1. employment protection; 
2. unemployment insurance; and
3. skilling and education. 

The main changes of the reform will indeed concern the possibility to shift from a fixed-term to an open-ended employment contract after twelve months of employment and the right to enrol in education/training for one year after eight years of employment with the same company. The latter novelty is quite innovative as the employees will receive up to 80% of their salary. However, the training is not at his/her choice, but must contribute to the employee’s employability.    

With regards to employment protection, the priority rules of dismissals (‘last in, first out’, for instance) can be overcome for three employees and employers’ unilateral changes to the working conditions, such as the working hours, requires up to three months of notice. The rules for dismissal will be more predictable and will require “factual reasons”, that include cases of serious violation of the employment contract through “difficulties in cooperation” and other reasons.  

Martin Ådahl, Labor Market Policy spokesman for the Center Party, during the press conference, underlined that labour law must be adapted to today’s labour market and that the reform strengthens Sweden’s competitiveness”. 

The reform will most probably enter into force on 30 June 2022. 

It is estimated to cost the state SEK 11 billion per year (around EUR1billion).