Damages and Compensation in Swedish Employment Law

Legal Advice for Employers and Employees

Advantage Law Firm assists both employers and employees with claims for damages and compensation arising under Swedish employment law. Claims may arise following unlawful termination, dismissal, unpaid salary, breach of collective agreements, discrimination or other violations of employment legislation. 

Swedish employment law contains several forms of financial liability. An employer that breaches the Swedish Employment Protection Act, LAS, may be required to compensate an employee both for actual financial loss and for the violation of the employee’s statutory rights.

We assess the legal basis of claims, calculate financial loss, pursue or defend compensation claims and represent clients in negotiations and court proceedings.

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When Can Employment Law Damages Arise?

Damages may arise where an employer or employee breaches statutory employment rules, a collective agreement or, in some cases, the individual employment contract.

A common example is an employee claiming that a termination or summary dismissal was contrary to the Employment Protection Act. Claims may also concern unpaid salary, holiday pay, failures to comply with collective bargaining obligations or discrimination.

Employers should assess potential liability before taking significant employment measures. Employees should also act promptly because Swedish employment law contains short limitation periods for certain claims.

Damages Under the Employment Protection Act

The Swedish Employment Protection Act contains specific rules on damages for breaches of the legislation.

An employer that unlawfully terminates or summarily dismisses an employee may become liable to pay compensation. The damages can cover both financial loss and compensation for the infringement of the employee’s rights.

In some cases, an employee may also seek a declaration that the termination or dismissal is invalid. Questions concerning continued employment and compensation may therefore arise in the same dispute.

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Economic Damages

Economic damages compensate an employee for actual financial loss caused by the employer’s breach.

This may include salary that would otherwise have been earned as well as other employment-related benefits. Depending on the employment terms, bonus, commission or other remuneration may also need to be considered.

The claimant must normally be able to demonstrate the financial consequences of the breach. Salary records, employment terms and other financial documentation may therefore be important.

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General Damages

General damages are different from economic damages because they do not primarily compensate for a direct financial loss.

They compensate for the infringement represented by the breach of employment legislation or applicable employment rule

An unlawful termination or summary dismissal can therefore potentially result in both economic and general damages.

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Unlawful Termination

An employer terminating an employee must comply with both the substantive and procedural requirements of Swedish employment law.

Where the termination breaches the Employment Protection Act, the employee may in certain circumstances seek damages and challenge the validity of the termination.

We assist employees in evaluating whether a termination can be challenged and employers in assessing legal exposure before and after a termination decision.

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Unlawful Summary Dismissal

Summary dismissal is one of the most serious employment measures because employment ends immediately without the ordinary notice period.

The legal threshold is therefore high. Where the requirements are not satisfied, the employer may face substantial liability.

A dismissal dispute frequently requires careful review both of the alleged misconduct and of the procedure followed by the employer before the decision was made.

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Salary, Bonus and Other Compensation

Employment compensation disputes do not always arise from termination.

Employees and employers may disagree over salary, commission, bonuses or other employment benefits. The assessment normally requires consideration of the employment agreement, applicable policies, collective agreements and previous practice.

We assist employees in pursuing remuneration claims and employers in reviewing and responding to such claims.

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Holiday Pay and Holiday Compensation

Employees have statutory rights concerning annual leave and holiday pay.

When employment ends, an employee may also be entitled to compensation for earned but unused holiday entitlement.

Disputes can concern the number of accrued days, the basis for calculating compensation or whether the correct payment has been made. Breaches of Swedish holiday legislation can also create liability beyond the underlying payment claim.

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Damages Under the Co-Determination Act

The Swedish Co-Determination Act, MBL, contains rules concerning negotiations, information and relations between employers and trade unions.

An employer that breaches negotiation obligations can become liable for damages. Breaches of collective agreements can also give rise to compensation claims.

Such disputes may involve claims by employees, trade unions or employers depending on the particular obligation that has been breached.

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Breach of Collective Agreements

Collective agreements contain binding employment terms for the parties covered by them.

They may regulate salary, working time, benefits, negotiation procedures and many other employment conditions.

A breach can result in damages. Disputes may concern both the interpretation of the collective agreement and whether a party has acted contrary to its provisions.

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Discrimination Compensation

An employee or job applicant subjected to unlawful discrimination may in certain circumstances be entitled to discrimination compensation.

Claims can arise from recruitment, salary decisions, promotion, management decisions, termination or other employment measures. 

Evidence should be preserved at an early stage, particularly where the dispute concerns the reasons behind an employer’s decision or differences in treatment between employees.

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Redundancy and Damages

Redundancy dismissals can also create liability where the required legal process has not been followed.

A dispute may concern redeployment obligations, selection rules, collective negotiations or whether redundancy was in fact the genuine reason for termination.

Employers should document the process carefully, while employees should review the documentation where the stated reason for termination is disputed.

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Fixed-Term Employment

Incorrect use or termination of fixed-term employment can also result in claims.

A dispute may concern whether the employment has converted into indefinite employment or whether the employer otherwise acted contrary to the Employment Protection Act.

Such cases can involve both the status of the employment relationship and claims for damages.

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Can an Employer Claim Damages From an Employee?

Employees may also become liable to employers in certain situations.

For example, the Employment Protection Act contains rules concerning employees who fail to observe applicable notice periods.

Employee liability is, however, subject to important limitations in Swedish employment law. Any employer claim should therefore be assessed carefully according to the specific legal basis relied upon.

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Evidence in Employment Damages Claims

Employment claims must be supported by relevant evidence.

Depending on the dispute, relevant material may include employment agreements, payslips, termination notices, warnings, emails, text messages, policies, collective agreements and time records.

Where economic damages are claimed, the financial loss itself must also be established. Documentation concerning salary, benefits and other consequences can therefore be crucial.

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How Are Damages Calculated?

The amount depends on the particular rule that has been breached and the circumstances of the individual case.

Economic damages are based on actual loss. General damages are assessed according to the nature of the violation and relevant Swedish employment law practice.

A reliable estimate therefore normally requires a review of the employment relationship, the alleged breach and the financial consequences.

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Time Limits in Employment Disputes

Swedish employment law contains several short time limits for claims concerning invalidity and damages.

Failure to act within the applicable period can result in the loss of the right to pursue a claim.

Legal advice should therefore be sought promptly following termination, summary dismissal or another significant employment dispute.

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Negotiating Employment Compensation Claims

Many damages disputes can be resolved through negotiation without a final court judgment.

A settlement can include financial compensation, final salary, holiday pay, release from work duties, references and other terms relating to the end of employment.

A negotiated settlement may provide both parties with greater certainty and avoid the costs and risks of prolonged litigation.

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Settlement Agreements

Where the parties settle an employment dispute, the agreement should be documented clearly.

The settlement may specify the compensation payable, payment dates and whether the parties have any further claims against each other.

It may also address confidentiality, employment certificates, return of company property and other practical matters. The consequences of the settlement should be fully understood before it is signed.

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Employment Litigation

Where negotiation is unsuccessful, a compensation claim may need to be determined through legal proceedings.

Depending on the parties, the collective bargaining structure and other circumstances, employment disputes may be handled by a district court or the Swedish Labour Court.

Claims, legal grounds and evidence must be structured carefully. We represent clients from the initial claim and negotiations through the relevant court proceedings.

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Claims Against Employers

An employee claiming that the employer has breached employment law should first identify the legal right that has been violated and the compensation sought.

A claim should normally explain the legal basis and specify the amounts requested. Economic losses should be calculated and documented, while claims for general damages should be connected to the underlying legal violation.

We assist employees in evaluating, presenting and pursuing such claims.

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When an Employer Receives a Damages Claim

An employer receiving a compensation claim from an employee, former employee or trade union should analyse the claim before responding.

The company should review the employment history, documentation, employment agreement, applicable collective agreement and communications with the employee.

We assist employers in assessing legal and financial exposure, responding to claims and representing the business in employment disputes.

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Preventing Employer Liability

Many employment disputes can be prevented through proper procedures before significant decisions are made.

Clear employment agreements, documented workplace procedures, appropriate management of misconduct and knowledge of collective bargaining obligations can substantially reduce risk.

This is particularly important before termination, restructuring and other major employment decisions. Advantage Law Firm assists employers in identifying risks and structuring employment processes correctly.

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Advantage Law Firm – Experience in Employment Damages

Advantage Law Firm has been practising law for more than 18 years and has extensive experience in Swedish employment law, negotiations and employment disputes.

We represent both employers and employees throughout Sweden. Our work includes unlawful termination, summary dismissal, salary claims, damages under the Employment Protection Act, collective agreement disputes and other compensation claims.

We assist from the initial legal assessment and calculation of potential compensation through negotiation, settlement and litigation.

Why Choose Advantage for Employment Damages?

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More Than 18 Years of Experience

Extensive experience in Swedish employment law, negotiations and court proceedings.

Employers and Employees

We act for both sides of employment disputes and understand the legal and commercial considerations from each perspective.

Damages and Compensation Claims

We identify, calculate, pursue and defend employment-related compensation claims.

Negotiation and Settlement

We seek commercially and legally sustainable settlements where appropriate.

Extensive Litigation Experience

Where negotiation is unsuccessful, we represent clients in court proceedings.

Assistance Throughout Sweden

We advise employers and employees throughout Sweden.

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How We Handle an Employment Damages Matter

Initial Assessment

We review the employment relationship, alleged breach, agreements and available documentation.

Claim and Calculation

We assess the available claims and calculate economic loss and other compensation.

Negotiation

We pursue or respond to the claim and represent the client in negotiations.

Court Proceedings

Where the dispute cannot be resolved, we represent the client through the legal proceedings.

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Frequently Asked Questions About Employment Damages in Sweden

01 What are damages under Swedish employment law?

They can include economic damages for actual financial loss and general damages for infringement of statutory or contractual employment rights.

Yes. A breach of the Employment Protection Act can result in damages and, in certain situations, the validity of the termination can also be challenged.

Economic damages compensate for a measurable financial loss such as lost salary or employment benefits.

General damages compensate for the infringement caused by the breach itself rather than a specific financial loss.

Yes. The same employment law breach can in some cases result in both forms of compensation.

Yes. Failure to comply with negotiation obligations or collective agreements can result in liability.

Yes. Breaches of holiday legislation can in certain circumstances result in damages in addition to the underlying payment claim.

In certain circumstances, yes, although employee liability is subject to important legal limitations.

The amount depends on the applicable law, the actual financial loss, the nature of the violation and relevant case law.

Some Swedish employment law claims are subject to short statutory time limits, so legal advice should be obtained promptly.

Yes. Many disputes are resolved by negotiation and settlement agreements before a final court judgment.

Yes, subject to the ordinary rules concerning conflicts of interest.

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Contact an Employment Lawyer in Sweden

Have you been terminated or dismissed and want to assess whether you may be entitled to damages? Has your company received a compensation claim from an employee or trade union?

Advantage Law Firm assists both employers and employees in assessing employment law claims, calculating compensation and handling negotiations and disputes.

We provide support from the initial legal analysis and claim through settlement and court proceedings.

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