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An employer had not undertaken a notice period to terminate a probationary employment

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calendar 30 August 2020
globus Sweden

An agreement on probationary employment contained a notice period of one month. The Swedish Labour Court ruled that this did not indicate that the parties intended to deviate from the Employment Protection Act, and the employer could therefore terminate the probationary employment by notifying the employee two weeks in advance.

An employee commenced a probationary employment of six months. The employment contract contained a notice period of one month, without specifying that it only applied to an eventual permanent employment. When the employer notified the employee that the probationary employment would terminate, the employee claimed entitlement to the one-month notice period.

The question was whether the parties had agreed that a one-month notice period would be required to terminate the probationary employment.

A probationary employment can be terminated without a formal notice period

According to the Employment Protection Act, an employer who does not want an employment to continue once the probationary employment expires, must notify the employee of this at least two weeks in advance. In order to terminate a probationary employment, no formal notice or notice period is required. Instead, it is enough that the employer notifies the employee two weeks in advance.

An employer and an employee can nonetheless agree in the employment contract, that a notice period shall be required for the employer’s termination of a probationary employment. This is because the agreement may benefit the employee. On the other hand, the agreement may not revoke or restrict the employee’s rights according to the Employment Protection Act.

Had the parties agreed on a one-month notice period?

In the employment contract, it was stated that the employment was a fixed-term probationary employment. Provided that the employment was not terminated, it would transform into a permanent employment after six months, in accordance with the Employment Protection Act. It could therefore make sense, as stated by the Labour Court, to agree on a notice period in the probationary employment agreement. However, it should be clear if the parties intend to deviate from the Employment Protection Act, by also having the notice period cover the probationary employment.  

The Labour Court did not find the one-month notice period in the employment contract to indicate an intention from the parties to impose a one-month notice period on the probationary employment. Therefore, the employer was entitled to terminate the probationary employment by notifying the employee two weeks in advance.   

IUNO’s opinion

It is possible for the employer and employee to agree that the employer must take a certain notice period into account, even during a probationary employment. To become binding, however, it must be clear that the parties have actually intended to deviate from the Employment Protection Act, and that the notice period does not only apply if the probationary employment transforms into a permanent employment.

There is a risk that ambiguities in the employment contract will burden the employer. IUNO therefore recommends that termination clauses are formulated as clear as possible and that the contract clearly indicates that the notice period shall not cover the probationary employment.

 [Swedish Labour Court Case 38/2020 of 24 June 2020]

An employee commenced a probationary employment of six months. The employment contract contained a notice period of one month, without specifying that it only applied to an eventual permanent employment. When the employer notified the employee that the probationary employment would terminate, the employee claimed entitlement to the one-month notice period.

The question was whether the parties had agreed that a one-month notice period would be required to terminate the probationary employment.

A probationary employment can be terminated without a formal notice period

According to the Employment Protection Act, an employer who does not want an employment to continue once the probationary employment expires, must notify the employee of this at least two weeks in advance. In order to terminate a probationary employment, no formal notice or notice period is required. Instead, it is enough that the employer notifies the employee two weeks in advance.

An employer and an employee can nonetheless agree in the employment contract, that a notice period shall be required for the employer’s termination of a probationary employment. This is because the agreement may benefit the employee. On the other hand, the agreement may not revoke or restrict the employee’s rights according to the Employment Protection Act.

Had the parties agreed on a one-month notice period?

In the employment contract, it was stated that the employment was a fixed-term probationary employment. Provided that the employment was not terminated, it would transform into a permanent employment after six months, in accordance with the Employment Protection Act. It could therefore make sense, as stated by the Labour Court, to agree on a notice period in the probationary employment agreement. However, it should be clear if the parties intend to deviate from the Employment Protection Act, by also having the notice period cover the probationary employment.  

The Labour Court did not find the one-month notice period in the employment contract to indicate an intention from the parties to impose a one-month notice period on the probationary employment. Therefore, the employer was entitled to terminate the probationary employment by notifying the employee two weeks in advance.   

IUNO’s opinion

It is possible for the employer and employee to agree that the employer must take a certain notice period into account, even during a probationary employment. To become binding, however, it must be clear that the parties have actually intended to deviate from the Employment Protection Act, and that the notice period does not only apply if the probationary employment transforms into a permanent employment.

There is a risk that ambiguities in the employment contract will burden the employer. IUNO therefore recommends that termination clauses are formulated as clear as possible and that the contract clearly indicates that the notice period shall not cover the probationary employment.

 [Swedish Labour Court Case 38/2020 of 24 June 2020]

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Anders

Etgen Reitz

Partner

Franziska

Brüggemann

Associate

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