Introducing transition and retraining support, and readjustment support for employees – a tool for employers?

As part of the new reforms to Swedish employment protection legislation, there is an increased focus on employees maintaining job security by continuously developing their expertise and skillset. The changes include introducing generous public support for transition and retraining and readjustment. As a result, individuals with a close and active connection to the labor market can apply for student grants and loans for transition and retraining, and support with readjustment in the event their employment is terminated.

New types of financial support are being introduced, all of which are available to a wider group of individuals. Readjustment support has previously been available to many employees by way of collective bargaining agreements.

A similar type of financial support is now made available, by virtue of legislation, to employees not covered by collective bargaining agreements. As regards student grants and loans for transition and retraining, until recently employees have been entitled to an (unpaid) leave of absence from their employment when they have wanted to study.

Under the new legislation, individuals will have the opportunity to apply for financial support in connection with studying where the studies are deemed to strengthen the individual’s position on the labor market and make it easier for them to find new employment. The new generous financial package consists of publicly-financed grants and loans and, for those who are covered by certain collective agreements, additional financial support via those agreements.

While the new support package is a tool designed for employees and the labor market in broad terms, it can also be useful for certain employers. By having a dialogue with the employees and (where applicable) trade unions, employers can clarify their future need for skills and expertise in order to incentivize employees to use the financial support and acquire the right education and training to be able to meet the future requirements for the job.

In doing so, employees will increase their skills and attractiveness on the labor market, whilst companies have a greater prospect of being able to retain their employees in the long term, since they could gain the skill sets that are required for the future business. This could also decrease the risk of redundancies and the associated costs.

In the January episode of our Hire & Fire podcast, published in Swedish, our employment law experts Sam Seddigh and Elin Osbeck explain the new rules and the practical implications the new support package could have in the future.

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Elin Osbeck 
Senior Associate