Sweden: debate on layoff order because of rising youth unemployment and difficulties for SMEs

SMEs want more flexibility to face the crisis. Anna-Stina Nodmark Nilsson, leader of the Foretagarna employers’ association, which represents SMEs (55,000 members), thinks that layoff priority rules worsen SMEs’ situation in times of crisis. Indeed, the provisions of the LAS apply in the absence of an agreement with a union organization. Yet, while it’s easy for large businesses to negotiate layoff conditions with local unions, SMEs often have no one to turn to and suffer from the lack of collective agreements. When they can negotiate, it is hard for them to discuss fundamental skills for a job with unions who are only interested in seniority. Yet, given their size, SMEs really need to keep key employees. Therefore, Foretagarna joined forces with the Svenskt Naringsliv employers’ organization to create a lobbyist frontline to ask for more flexible rules. As a consequence, on October 28, the Folkpartiet (center party in the government coalition) presented proposals to the Parliament to adjust layoff priority rules to the labor market’s flexibility needs. Today, only SMEs with less than 10 employees can lay two people off without taking account of layoff priority rules, but the Folkpartiet wants this possibility to be extended to all businesses, regardless of their size. It also wants businesses with more than 50 employees to be able to lay a maximum of 10 people off under the same conditions.