Influential supervisor was not an employee

During the summer, a supervisor in Stockholm was terminated from her employment at a small cleaning company after conflicts with the other owner of the company.

The employee was responsible for bookkeeping, administration, and supervising. The company was owned by the VD together with the employee. The two each owned half of the company's shares and had signatory rights.

The question in the Labour Court was whether the employee was covered by the Employment Protection Act at the time of termination.

Organization was key

The Labour Court concluded that the employee held a managerial position in the cleaning company. Therefore, her termination was not covered by the Employment Protection Act.

The Labour Court pointed to the fact that she had extensive influence in the company. She owned shares, was a deputy board member, and had signatory powers. However, it was crucial how the management of the company was organized in practice.

The management had been organized in a way that showed that the employee had a significant influence over the company's operations. She regularly attended meetings about the operation and management of the company. She also had a considerable influence over the management of the company solely based on her shareholding.

IUNO’s opinion

Employees can be entirely or partly exempted from the Employment Protection Act. Employees in managerial or similar positions are exempted from the rules on termination, among other things. The assessment of whether the rules apply is based on the employee's duties, conditions of employment, and the way the management is organized and exercised in practice.

IUNO recommends companies to keep track of how the management has been organized in practice to understand which employees are fully or partly exempted from the Employment Protection Act. The employment contract should also reflect this.

[The Swedish Labour Court’s decision of 26 April 2023 in case 24/23]