At-will vs LAS in Sweden: why dismissal needs objective grounds

Under US at-will employment, which is the general starting point in most states, either side can end the job at any time, provided the reason is not unlawful, and often without notice. Under Sweden’s Employment Protection Act, lagen om anställningsskydd (LAS), an employer may only dismiss a permanent employee for sakliga skäl, meaning objective grounds, and must give notice that grows with service.

The US rule has limits of its own. Discrimination and retaliation laws, written contracts and some state rules restrict what an at-will employer can do, so the American model always had guard rails. The difference is where the burden sits. In the US the employee usually has to show that a specific protection was breached; in Sweden the employer has to be able to justify the dismissal from the start.

The Swedish rules also shape how a job begins. Permanent employment, tillsvidareanställning, is the main rule under LAS § 4, and fixed-term contracts are only allowed in listed situations. A US manager used to hiring quickly and adjusting later needs to move the careful thinking to the front of the process, before the contract is signed.

It helps to think of the two systems as answering different questions. The US at-will default asks whether a specific law was broken when someone was let go. LAS asks whether the employer had an acceptable reason at all, whether it followed the required steps, and whether it gave the right notice. A US playbook built around the first question will miss most of the second.

LAS recognises exactly two families of reason: the business has too little work for the role (arbetsbrist), or something about the individual justifies ending the job. The wording of LAS § 7 was reformed in 2022, and both kinds still need a real, documented basis.

Redundancy covers business decisions such as closing a function, restructuring a team or cutting cost. The employer decides the business need, but the selection of who goes follows the order-of-selection rules described below, and the union negotiation duty applies first. A redundancy label used to remove one named person is a classic source of disputes.

Personal reasons cover performance, conduct and cooperation problems attributable to the employee. In practice employers are expected to have raised the issue, explained what must change and given the person a fair chance to improve before issuing notice. The file of emails, meeting notes and written warnings built up along the way is what supports the decision if it is later challenged.

Summary dismissal, avsked, is a separate and much narrower tool. It ends employment without notice and requires a gross breach of the employee’s obligations. For US companies it is best treated as an exceptional step that needs specialist advice.

Some reasons can never serve as grounds. Dismissal because an employee takes parental leave is prohibited under the Parental Leave Act, as is less favourable treatment linked to that leave. With parents in Sweden sharing 480 days of parental benefit per child, a manager will often be handling performance questions around periods of leave, and the timing and wording of any conversation should be checked carefully with the employer.

The statutory scale in LAS § 11 ties the employer’s notice to how long the person has worked there, with a floor of one month and a ceiling of six. The employee gives 1 month whatever their tenure, unless a contract or collective agreement says more.

• Employed less than two years: one month’s notice
• Two to four years in post: two months
• Four to six years in post: three months
• Six to eight years in post: four months
• Eight to ten years in post: five months
• Ten years and upwards: six months

Pay keeps running while notice is served, and leave that was earned but never used is settled in cash (semesterersättning) with the last salary. A US budget that assumes a two-week wind-down will be short by months of salary and 31.42% employer contributions on that salary.

Collective agreements can contain notice rules of their own. Check with the employer which agreement, if any, covers the role before quoting a notice period to anyone.

To see the cost in money terms, take the Stockholm example of SEK 50,000 a month. A person with six years’ service is owed 4 months’ notice, so SEK 200,000 in wages attracts a further SEK 62,840 in contributions (31.42%), and unused holiday comes on top. Those amounts are due whether or not the person is asked to keep working during notice, so they belong in any restructuring budget from the first draft.

A Swedish redundancy has a fixed order: negotiate with the union, apply the order-of-selection rules, give notice and honour a re-employment priority. Skipping a step is what turns a lawful reorganisation into a damages claim.

Negotiation comes first. Sections 11 to 13 of the Co-determination Act (MBL) oblige the employer to open talks before any decision is taken, and a union with members on site has that right whether or not an agreement has been signed. The negotiation has to take place before the decision is final, so a restructure announced in a global all-hands before the Swedish talks begin creates avoidable risk.

Selection then follows turordning under LAS § 22, which is broadly last in, first out by length of service. A 2022 change lets any employer, large or small, lift three people out of the queue before applying it. Anyone dismissed for redundancy has a 9-month priority right to re-employment if a suitable role opens up (§ 25).

For support after a redundancy, many employees turn to bodies set up under collective agreements and through the state’s omställningsstudiestöd, study support administered by CSN since 2023 for people aged 27 to 60, covering about 80% of pay.

A US group running a global reduction should therefore give the Swedish part its own timeline. The union talks, the selection order and the notice ladder all add weeks or months to the date on which costs stop, and communicating a leaving date before those steps are complete can itself cause a dispute.

Yes, and the deadlines are short. A worker seeking to overturn notice gets two weeks to say so, or one month if the notice was only oral (LAS § 40). Money claims get four months under § 41. Once a window closes, the claim is lost.

The 2022 reform changed what happens while a dispute runs. Today the job normally stops on the last day of notice, dispute or not; § 34 keeps only a few exceptions. Before the reform, the employee could often remain employed and paid throughout the dispute, so the change reduced one of the largest cost risks for employers.

Putting notice in writing is the simplest protection an employer has. An oral notice stretches the employee’s window to contest it from 2 weeks to 1 month, and a written notice creates a clear date from which the § 40 and § 41 deadlines run. The same letter should state the notice period that applies, since an error in the length of notice is easy to avoid and awkward to fix later.

The financial exposure is still significant. Where a court sets the dismissal aside yet the company declines reinstatement, § 39 fixes compensation at 16 months’ pay for under 5 years’ service, 24 months’ for 5 to 10 years and 32 months’ for 10 years or more. For a long-serving senior engineer, that can mean more than two years of salary.

Flexibility exists mainly at the start of employment and in fixed-term contracts. Probation, or provanställning, may last up to 6 months under LAS § 6, and either side can end it before it expires without having to show objective grounds. If no one ends it, the job continues as permanent employment.

Time-limited hiring is restricted to four headings in LAS § 5. Two matter most for foreign clients. Särskild visstidsanställning, the general-purpose fixed term, flips to permanent once its total passes a year inside any five-year stretch. A vikariat, covering for an absent colleague, flips after two years in five. Seasonal jobs and staff aged 69 or older make up the other two headings.

Employers should keep in mind that the probation clock starts on the first working day, so a slow onboarding eats into the review window. Our guide to LAS dismissal and notice covers each contract type in more depth.

Under an EOR model it is the employer of record whose name is on the contract, so the LAS duties sit with the EOR, while you still decide on the work and raise any performance concerns. A termination is planned together: the employer of record assesses whether objective grounds exist, handles any union negotiation, issues notice and runs final pay.

One staffing rule also reaches the client. If the same person has been placed with the same unit of a client for more than 24 months within a 36-month period, the client must offer permanent employment within one month or pay compensation of 2 months’ pay. A US company planning a long engagement through an EOR should diarise that date and decide in good time how it wants to handle it.

Clients sometimes expect an EOR to make dismissal easier; it does not change the law. What it does is put a Swedish employer, with Swedish payroll and HR processes, between your US managers and the statutory steps. Employer of Record Sweden bills from USD 560 per person per month for that service.

The practical advice is to document early. Written objectives, regular one-to-ones and notes on performance conversations help any later decision regardless of who the legal employer is. For the wider set-up, read our guide for American firms employing Swedes and our introduction to Swedish EOR arrangements, or see what the EOR Sweden services cover.

Q01Is at-will dismissal possible in Sweden?+

A.No. Ending a permanent contract needs a lawful reason under LAS, rooted either in a shortage of work or in the individual’s own conduct or performance.

Q02What notice period applies when a Swedish employer ends a job?+

A.Between one and six months, set by length of service on the LAS § 11 scale; staff who resign owe one month.

Q03Can a Swedish probation period end without a reason?+

A.Yes. Probation lasts up to 6 months and either side can end it early; otherwise it becomes permanent employment.

Q04Does the employee stay on payroll during a dismissal dispute?+

A.Usually not any more. After the 2022 changes, pay and employment stop at the end of notice while the case continues, save in a few specific situations.

Q05How many employees can be exempted from last in, first out?+

A.Three, for any size of business, following the October 2022 reform.