Employment contracts
An employment contract is an important document for both employer and employee. It clarifies the working relationship, making it clear and secure for both sides through a written agreement. If there is a collective bargaining agreement in force at the workplace, most conditions are already regulated. If there is no collective bargaining agreement, there is a lot you need to think about yourself.
When you are going to start a new job, it is important that you know what you are expected to do and what your employment involves. By law, employers must provide written information about important working conditions. This is to be included in your employment contract.
An employment contract is important for several reasons
- Clarity regarding terms and conditions
- A legally binding document
- Prevention of misunderstandings
- Protection for both parties
Matters that are to be included in an employment contract
If you are unsure about anything in the employment contract, ask the employer. It is important that you feel completely certain about what applies before you sign the contract. As a member, you can always turn to our advisory service.
The contract must contain full names, addresses and contact details of the employer and employee, the company registration number and the employee’s personal identity number.
The employment contract applies until further notice unless otherwise agreed. Read more about forms of employment here (in Swedish)
This specifies the date on which employment begins.
We recommend that the place of employment be stated as a specific, geographically determined place unless the parties agree otherwise due to the nature of the position.
Also read about work from home, telecommuting in the next item.
The possibility of working remotely can look different. It may be an oral agreement, it may be regulated in an internal policy at the employer and apply to all employees, it may be regulated in your employment contract, or you may draw up a remote work agreement as an addendum to the employment contract.
Since the employer can change a policy unilaterally, we recommend that if you work a significant part of your working hours remotely, you agree with the employer on the conditions in a contract. Things can change quickly in the workplace, for example if you get a new manager or there is a reorganisation, and then the agreement provides greater security than an oral agreement or a policy.
Regardless of the scope of the remote work, the employer has responsibility for the work environment. It is still important to think about how you work and ensure that you take breaks even at home. Here you can find more tips on remote work: Tips for working from home (in Swedish).
It is also important to think through and discuss how you should proceed so that the employer can keep track of your performance, for example through regular check-ins. This makes things easier ahead of upcoming performance reviews and when setting salary. It is also important to think through other practical issues, such as IT matters and the social aspect, for example how you will maintain contact with your colleagues.
Important points that should be included:
- The right to work remotely. The agreement must clearly state what you have agreed on and the scope of the remote work.
- Response time and presence at the office. How quickly should you be on site if you are required to report to the office? How often should you be at the office?
- Travel expenses. Which costs will the employer cover when you travel to the office?
- Affiliation/place of posting. Which office do you belong to? This can be important if, for example, there are cutbacks in the workplace and it then becomes relevant to determine whether you are affected by the downsizing, and which group subject to order of priority rules you belong to.
- Termination of the agreement. If the agreement is to be changed or completely terminated, it is important that there is time for you to adapt – you may then need to move or look for a new job. An adjustment period of at least three months is reasonable.
- Insurance. Does the employer need to take out a special insurance policy so that you are covered even though you are not working at the office?
- Equipment in the home. What equipment should the employer provide and how should this be done; for example, should you receive a sum to buy equipment for, or will you receive equipment from the employer?
If the intention is to work full-time remotely, issues such as travel expenses and place of posting are particularly important to regulate. Your place of posting can be of great significance if, for example, a redundancy situation arises, in order to determine which group subject to order of priority rules or operating unit you belong to.
The position is full-time unless otherwise specifically agreed.
The job title or professional title should be written in the employment contract.
The salary you have agreed, what year's level the salary applies to and the salary payment date are to be specified in the employment contract. If a variable salary or bonus is included, this should be stated in the employment agreement, along with any associated conditions.
By law, the minimum amount of paid annual holiday leave is 25 days per holiday year. The number of days you have agreed is to be specified in the employment contract. Advance holiday leave can be granted during the first year of employment. Read more about annual holiday leave here (in Swedish).
Rules and compensation levels for overtime work are normally regulated by collective bargaining agreements. The right to overtime compensation can be waived, usually in return for a higher salary and/or 5 extra annual holiday leave days in addition to the number stipulated by law.
Notice periods are regulated in the relevant collective bargaining agreement unless you have agreed otherwise in your employment contract. Please note that you are not permitted to agree worse terms than those stipulated in the collective bargaining agreement or the Swedish Employment Protection Act.
If the position involves business travel, it should be clear what travel expenses are reimbursed, as well as the rules for daily allowances and mileage allowance.
The collective bargaining agreement covers matters such as:
- sick pay
- occupational pension
- parental pay
- leave of absence
- notice periods
- overtime and travel time compensation
- compensation for employees’ inventions
- working time
A collective bargaining agreement guarantees that you will have the conditions that are regulated within it. But even though collective bargaining agreements have standardised conditions, there may still be scope to negotiate individual solutions and conditions in addition to the collective bargaining agreement. If the employer has signed a collective bargaining agreement, the employment contract should state which agreement applies at your workplace.
An employer without a collective bargaining agreement may have many similar conditions in a written policy or employee handbook. However, the conditions regulated in the policy or employee handbook can be changed or removed unilaterally and without warning by the employer. It is therefore important to negotiate in order to ensure that the following conditions are included in your individual employment contract:
Occupational pension
There is no statutory obligation for employers to pay occupational pension contributions. If your workplace is not covered by a collective bargaining agreement, it is therefore vital that the right to an occupational pension and the pension scheme’s premium levels are regulated in your employment agreement.
Other insurances that are included in collective bargaining agreements
Compare the insurance cover that the employer offers with collectively agreed insurances, for example health insurance (part of the ITP pension scheme), TFA (occupational injury insurance) and TGL (group life insurance).
Read more about collectively agreed insurances on the Avtalat website
Sick pay
By law, the employer is to pay sick pay for days 1-14 of sick leave, with a qualifying period deduction. Sickness benefit is then paid by the Social Insurance Agency, Försäkringskassan. With a collective bargaining agreement, the employer also pays collectively agreed sick pay for days 15-90 of sick leave, which means that during this period you can receive almost 90 per cent of your salary. If there is no collective bargaining agreement at your workplace, you should investigate what cover your employer provides.
Read more about sick leave compensation heree (in Swedish)
Salary review
There is no statutory right to an annual salary review and adjustment. This is regulated in collective bargaining agreements. If there is no collective bargaining agreement at the workplace, you should negotiate the right to an annual salary review in your employment contract, as well as when in the year this should normally take place.
Parental pay
Parental benefit from the state can be supplemented by parental pay/ supplementary parental leave compensation through collective bargaining agreements. Most commonly, you are entitled to parental pay when you have been employed at the workplace for at least one year. If there is no collective bargaining agreement at your workplace, the right to parental pay and the rules that apply to it need to be clearly stated in your employment contract.
Can I negotiate the terms and conditions of employment?
If there is a collective bargaining agreement at the workplace, you can be sure that you will have good working conditions, but this does not prevent you from trying to negotiate different or better conditions. You should always negotiate about your salary.
In a workplace without a collective bargaining agreement, all conditions are negotiable. You simply have to negotiate yourself to make sure you get good working conditions. Many employers who do not have collective bargaining agreements have their own standard contracts that they follow strictly. It can be difficult to negotiate changes to these employment contracts, so you should prepare yourself with clear arguments about why you should get the conditions you want. Benefits, for example, are easier to negotiate than matters regarding confidentiality. You should always negotiate about your salary.
Even if the employer uses a standard contract, be sure to read it carefully and ask the employer questions if anything is unclear. In some cases, it may be possible to negotiate changes or improvements. A serious employer makes sure that you understand the terms and conditions and that both parties are in agreement before you sign.
The terms and conditions in your contract will impact not only your work life, but also your private life, so it is important that you are comfortable with them.
Employment certificate in the public sector
Some employers in the public sector provide certificates of employment that normally do not need to be signed.
Clauses that can be found in employment contracts
Below you will find examples of more clauses that may appear in employment contracts, with a brief explanation of what they mean and advice on what to bear in mind.
Non-competition clauses should be used restrictively. A non-competition clause may impact your ability to take up employment in your chosen field during the validity period of the clause. Any such clause should not have a validity period longer than 9 months from the last day of employment. During the period covered by the non-competition clause, your former employer must compensate you for loss of earnings, normally at a level of 60 per cent of your previous monthly income. We recommend that you raise the issue with the employer to receive clarification regarding their view on competing companies and operations.
This type of clause usually means that you may not try to attract the employer's customers and/or staff to a new employer or your own business for a certain period after your employment ends. Consider whether this could have consequences for your future employment.
Liquidated damages are a contractual sanction that occurs if an employee violates one or more provisions in the contract, often equivalent to six months' salary. Engineers of Sweden advises against agreeing to inclusion of a fixed sum for such damages in your employment contract. The amount should instead be decided through a legal process.
In some cases, legislation gives an employer a right to offset a debt or liability that an employee has to the employer against the employee's salary or other employment-linked compensation, for example advance holiday leave. The scope for such deductions without prior consent or agreement is otherwise severely limited.
It is becoming increasingly common for employers to include confidentiality provisions in employment contracts. These clauses are often unlimited in time. Engineers of Sweden's view on this issue is that confidentiality obligations should be limited in time, as the Protection of Trade Secrets Act already provides sufficient protection.
Employees have a statutory right to fair compensation for inventions that the employer takes over. This right cannot be waived in advance. Employment contracts often contain clauses regarding intellectual property rights during employment, and in some cases even after employment ends.
Read more about intellectual property rights here (in Swedish)
Swedish law applies as standard in Swedish employment contracts, and that is also our recommendation. Engineers of Sweden has limited scope to provide support and assistance in the event of a dispute if you agree to a clause in your contract that states that another country's law is to apply.
Engineers of Sweden believes that disputes regarding employment contracts should be settled by a Swedish court. Sometimes, however, the employer wishes to insert an arbitration clause. If arbitration is to be used, the contract should state that the employer is to cover the entire cost of the arbitrators' fees, regardless of the outcome.
Company car benefits
Car benefits from employers can take several forms, such as a company car, a leased car or compensation for the use of a private car for work. If you are offered a car benefit at work, there are several important aspects to consider.