Step-by-step guide for reorganization
Are you planning a reorganization? Learn all about order of employment rules, the obligation to reassign according to Section 7 of the Employment Act (LAS), and negotiations according to Section 11 of the Co-determination in the Workplace Act (MBL) in our expert guide.
Work shortages and reorganization – step-by-step guide.
This guide is created for those working in HR or with employer responsibilities. The guide provides a clear and structured overview of the entire process, from the initial assessment to the implementation of any layoffs. By following the steps, it is ensured that the reorganization is handled correctly, while reducing the risk of legal disputes and creating security for both the business and the employees.
1. What is a staffing shortage?
Labor shortage is a legal term according to the Employment Protection Act (1982:80) and does not necessarily mean an actual shortage of work. A labor shortage can arise when the employer:
- reorganizing the business
- streamlines
- reduces costs
- restricts operations
- discontinuing all or part of the business
Lack of work normally constitutes valid grounds for termination.
2. Initial assessment – is there a genuine staff shortage?
The employer needs to first investigate:
Is the labor shortage real? There must be organizational, economic, or operational reasons.
Is there a risk of a sham redundancy? Labor shortage must not be used to actually terminate employment for personal reasons. Example:
- collaboration difficulties
- mismanagement
- Interpersonal conflict
If the real reason is personal, the termination can be declared invalid.
3. Check the collective agreement
It is crucial to investigate early on which collective agreement which apply, which employees are covered, local agreements, and special rules regarding exceptions.
Companies with Collective Agreements
- Primary negotiation obligation (MBL)
- Rules on information and collaboration
- Opportunity for contract schedules
- Several exceptions under the collective agreement
- Transition agreement
COMPANIES WITHOUT COLLECTIVE AGREEMENTS
- Negotiate with the union
- Promotional Law
- Exceptions to the order of redundancy according to the Employment Protection Act instead of a collective agreement
- Option for a scheduled tour
4. Duty to inform under the Co-determination Act (MBL)
The employer shall continuously keep the trade union party to the collective agreement informed about the development of the business. Example:
- Sales development
- economic situation
- planned organizational changes
- changes to premises or operation
5. Notification according to Section 15 of the Act on Employee Representation and Co-determination
The employer shall, well in advance of negotiations regarding staff reductions, provide written notice to the union regarding:
- Reasons for planned layoffs
- number of employees affected
- which categories the employees belong to
- number of employees normally employed
- timing of the dismissals
- calculation model for potential additional compensation
The employer shall also provide a copy of the notice to the Swedish Public Employment Service.
6. Primary Negotiation Obligation – Section 11 of the Employment (Co-determination) Act
According to Section 11 of the Co-determination in the workplace Act (MBL), the employer must negotiate before a decision is made and implemented. Negotiation is required in the following cases:
- more important change of operations
- more important change to employment or working conditions
The negotiation shall take place with trade unions where the employer is bound by a collective agreement.
7. Risk assessment according to work environment regulations
A reorganization also involves The Work Environment Act. The employer shall:
- conduct a risk assessment before the change
- Investigate organizational and social risks (workload, stress, conflicts, unclear responsibilities)
- Collaborate with the safety representative
8. Obligation to Redeploy - Section 7 of the Employment Protection Act
There are no objective grounds for dismissal if it is reasonable for the employer to offer other work. The investigation shall include:
- the entire legal entity
- all open positions
- work where the employee has sufficient qualifications
There are no objective grounds for termination if it is reasonable for the employer to offer other work.
Key principles: The employer does not need to create new positions; only applies to vacant positions;
The offer must be in writing; the employer bears the burden of proof.
9. Order of working hours according to the Employment Protection Act
When relocation No rules of priority apply: Last in – first out. Order of operation is normally per operational unit and per collective agreement area.
10. Exceptions to the order of priority
UNDER COLLECTIVE AGREEMENT:
Agreements can be reached on shift schedules or special agreements through negotiation. Exceptions are regulated in collective agreements.
WITHOUT COLLECTIVE AGREEMENT:
Can meet the collective agreement's roster or special agreements through negotiation. Otherwise, the Employment Protection Act (LAS) applies directly regarding exceptions in the roster.
11. Special protection for trade union representatives
According to the Act (1974:358), trade union representatives have enhanced protection. The employer shall take into account the needs of trade union activities and the representative's significance.
12. Notice to the Swedish Public Employment Service
Notice is required if at least 5 employees are affected in a county (Law on certain employment promotion measures).
13. Wait with terminations
Do not carry out any dismissals before negotiations are concluded, order of preference has been handled, and a reassignment investigation is complete.
14. Termination
The termination must be in writing and delivered in person. Contents:
- Complaint reference
- Information on preferential right to re-employment
- Check notice period (LAS/contract)
15. During the notice period & termination
Severance pay shall be paid. Contact the transition fund, write a service certificate and a letter of recommendation.
16. Right of first refusal for re-employment
Prerequisites: Sufficient qualifications and at least 12 months of employment. Requires negotiation in case of deviation.