Practice area

Employment and staffing

22 December 2022 · Article

Increased exemption possibilities in the event of a lack of work and greater security for fixed-term employees

As of October 1, 2022, the new rules are applied in the LAS, which in several places has been described as the largest labor law reform in modern times. How big a change that will mean in practice, however, remains to be seen. In any case, what is clear is that the new rules will mean increased administration for many HR departments. Two important news in LAS that you as an employer need to keep track of and think strategically about are clarified in more detail below.

Faster “in-LASing” for fixed-term employees

By replacing the form  of  general fixed-term employment with special fixed-term employment, the  starting distance to a permanent employment is half as long as before. Already after 12 months of work during the last five-year period, the special fixed-term employment is transformed into a permanent one.

If a special fixed-term employment is entered into after 1 October 2022 and the employee has previously had a general fixed-term employment, the employee may count time in the general fixed-term employment from 1 March 2022. In practice, this means that a person who has had a general fixed-term employment contract from 1 March 2022 to 1 October 2022 and then receives a special fixed-term employment after 1 October 2022 with the same employer, receives seven months of “free” employment to speed up the conversion to a permanent contract. A fixed-term employee who has worked for at least nine months over a three-year period also has priority to a new fixed-term employment contract.

Something that can be easy to miss is that a person who has three or more short-term fixed-term employment contracts during the same month, may count the interim period as employment time. Three single working days in a month can thus become one month’s period of employment. This rule may involve an additional rotation of on-demand staff.

Greater opportunities for employers to select staff in the event of a shortage of work

In the event of dismissal due to lack of work, the employer must take into account the rules on rotation based on the employees’ period of employment with the employer. Before the new LAS entered into force, employers with a maximum of ten employees could exempt two employees who were considered to be of particular importance for the continuation of the business. The new LAS extends this possibility. This means that all employers, regardless of the number of employees, now have the opportunity to exempt up to three people before the order of rotation is determined.

If the employer makes use of the exemption option, no new exceptions may be made during the next three-month period. Thus, from the time the first dismissal was made, a three-month block applies that prevents the employer from making more exceptions, regardless of whether you choose to exempt one or three people. It is not possible to “save” their exemptions for the next round of job shortage layoffs.

As before, it is up to the employer to decide who is of particular importance for the continued operation and who should thus be exempted. From a strategic perspective, one should not exclude someone who would still have had a safe place in the order of succession even if the person is of particular importance for the continued operation.

In summary, the new rules on special fixed-term employment mean that employers need to have a clear system for monitoring fixed-term employees’ seniority and conversion dates right from the start. Due to the new exemption rules in the event of redundancies due to lack of work, which means new opportunities for all companies regardless of size, care should also be taken to consider which employees are of particular importance to the business to ensure that important key competence remains in the company.