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Employee Rights When an Undertaking is Transferred in Sweden

1. Employees’ Rights

In conjunction with the transfer of a business from one employer to another, the rights and obligations under employment agreements and employment relationships that existed at the time of the transfer to the new employer shall also be transferred.

Prior to the decision to transfer the business (or a part of it), the acquiring company, as well as the transferring company, must, as a rule, call for and conduct union consultations with the local union representatives under the applicable collective bargaining agreements. Even if the companies are not bound by collective bargaining agreements, they are obliged to consult with any trade unions of which any concerned employees may be members. Union consultations must be initiated and concluded before a decision regarding the transfer is made. If the consultation requirement is not observed, the breaching company may be obliged to pay damages to the unions concerned.

2. Requirements for Predecessor and Successor Parties

The transferring company will remain liable (jointly with the acquiring company) towards the transferred employees for liabilities relating to the time prior to the transfer. However, the parties to a business transfer agreement are free to agree on a different distribution of liability between them.

For more information on these articles or any other issues involving labour and employment matters in Sweden, please contact Robert Stromberg, Partner at Cederquist (www.cederquist.se) at robert.stromberg@cederquist.se
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