In 2022, a number of changes were made to labor law, specifically in the Employment Protection Act (1982:80), which has been of great importance for both employees and employers. The amendments have raised many questions about, among other things, what applies when employers want to reduce their employees' working hours, known as 'hyvling'. Sections 7 a and 7 a b of the Employment Protection Act state that employers must consider order of priority when implementing 'hyvling' and employees undergoing 'hyvling' are entitled to a transitional period. Below, we describe what the provision on 'hyvling' actually entails and how it affects both employers and employees.
The provision on 'hyvling' can be difficult to understand. It refers to situations where the employer, due to a lack of work, needs to reduce working hours. In such situations, the employer must consider the order of priority, which means that employees with shorter periods of employment should be offered reduced employment before employees with longer periods of employment. If the employer has multiple offers, the one with the lower employment rate should be offered before the one with the higher employment rate.
The order of priority is based on employees who have the same tasks within the same operating unit. 'Same tasks' means that the employees have essentially the same tasks. This does not mean that the tasks are identical in all respects, but they should be considered to be largely similar.
If an employee declines the offer of reduced employment, there are legitimate reasons for termination due to lack of work. The employee who accepts the employer's offer will have a new employment with the reduced employment rate and is also entitled to a transitional period according to section 7 b of the Employment Protection Act. During the transitional period, the employee has the right to retain their employment rate and employment benefits. The transitional period should be as long as the notice period would have been in the event of termination by the employer, but no longer than three months. The transitional period begins when the employee accepts the offer of reduced employment, and after the end of the transitional period, the new terms and conditions of the employment apply.
Example: Company X is undergoing a reorganization that will result in a reduced need for labor, causing a lack of work at the company. The company must offer placement due to the lack of work in the form of reduced employment and must consider the order of priority in section 7 a of the Employment Protection Act. Employees A, B, and C are salespeople at the company and have similar tasks and work in the same workplace. A has been employed for 8 years and works full-time, B has been employed for 6 years and works full-time, and C has been employed for 3 years and works 50%.
The company wants to reduce the employment rate for one of the salespeople to 75%. A and B have a higher employment rate than the one offered by the company, but C does not, and is not affected by the offer. The one of A and B who will need to reduce their employment rate is B, who has been employed for the shortest period of time. If B declines, there are legitimate reasons for termination due to lack of work.
Before the law was changed, an employer was not obligated to offer reduced employment in any specific order of priority, but could freely choose which employee(s) would receive the offer. The employee also did not have the right to a transitional period, and an accepted offer would take effect immediately. This gave employers great freedom to make relocations within the company.
Through the amendments, the aim was to provide employees with improved protection in situations where a lack of work is managed by reducing employees' employment rates.
It has been emphasized in the preparatory works for the legislative amendments that the intention of the changes has not been to limit the ability of employees and employers to agree on a reduction in employment rate. In addition, section 7 a of the Employment Protection Act is optional, which means that deviations from the provision are allowed in collective agreements. For example, the commerce sector collective agreement provides for a transitional period of up to 9 months instead of the 3 months specified in section 7 b of the Employment Protection Act.
'Hyvling' has been a common practice in several industries for several years, especially in the retail sector. In light of several cases of 'hyvling' in the retail trade over the past year, the trade union Handels has expressed that the changes in the Employment Protection Act regarding order of priority in reduced employment rates are toothless. This is because the order of priority can be circumvented by the employer implementing 'hyvling' for all employees, in which case there is no order of priority, according to Handels. On the other hand, the Swedish Trade Federation believes that 'hyvling' can be a necessary way for stores to manage a lack of work. The negotiating manager for the Swedish Trade Federation argues that it is of course tough for employees who are offered fewer hours, but it is even tougher for them to be laid off because the company cannot survive unless the hours are reduced.
Despite the changes in the Employment Protection Act, the issue of 'hyvling' became very important in the collective bargaining negotiations of Handels in 2023. In the negotiations, Handels wanted a ban on 'hyvling', but the union did not succeed in achieving this. Over time, more questions may arise regarding 'hyvling' that the labor market parties cannot agree on and that need to be addressed in court. Currently, the Labor Court is handling the issue of the transitional period for employees on parental leave. Handels believes that the transitional period should begin when the employee on parental leave returns to work, but this is not regulated in either law or collective agreements.
We at Alex AB (publ) are experts in labor law. Whether you are an employer or an employee, feel free to contact us with questions and advice regarding 'hyvling' or other labor law matters. Book an initial 30-minute consultation with us at alexapp.co.uk!
