1. Minimum Requirements
An employment agreement does not have to take any specific form. However, Sweden has implemented the directive on an employer’s obligation to inform employees of the conditions applicable to the contract or employment relationship. As such, an employer must provide certain information in writing to the employee concerning the principal terms of the employment. This information must be provided to the employee within one month of the commencement of the employment.
2. Fixed-term/Open-ended Contracts
The general rule is that an employment agreement is for an indefinite period, unless otherwise agreed. The Employment Protection Act allows a general fixed-term employment when the employer is in need of fixed-term employees. A fixed-term employment agreement may also be concluded for a temporary substitute employment, for a seasonal employment and after the employee has reached the age of 67. If, during the past five years, an employee has been employed in a fixed-term employment for in aggregate more than two years the employment is transformed into an indefinite-term employment. Collective bargaining agreements may contain regulations deviating from the statutory rules governing fixed-term employment.
3. Trial Period
The Employment Protection Act permits probationary employment for a period of no more than six months. If the employment is not terminated before the expiry of the probationary period, the employment will automatically become employment for an indefinite term.
4. Notice Period
An employer must provide a prior notice of termination before dismissing an employee. Further, the employer must observe certain formal rules set out in the Employment Protection Act when serving a notice of termination to an employee. Notices shall always be made in writing and must state the procedure to be followed by the employee in the event the employee wishes to claim that the notice of termination is invalid or to claim damages as a consequence of the termination. The notice shall also state whether or not the employee enjoys rights of priority for re-employment. Statutory notice periods vary between one and six months, depending on the length of the employment term.
The length of the notice period may be extended by virtue of collective bargaining agreements or individual contracts. During the notice period the employee is obliged to perform work for the employer and is entitled to salary and all other employment benefits. It is possible for an employer to release the employee from the duty to perform work during the notice period.
The provisions in the Employment Protection Act regarding termination of employment are mandatory; however, the employer and the employee may agree to terminate the employment. Accordingly, it is possible to reach an exit agreement stipulating payment in lieu of notice and other terms and conditions that shall apply in connection with the exit.