AD 2026 No. 2 – Dismissal of union representative was legally grounded; Incorrect time reporting constituted a gross breach

In a new judgment, the Labour Court has examined the question of whether the Swedish Social Insurance Agency had a legal basis to dismiss an employee who was on full-time leave for union work. The Labour Court found that the employee had repeatedly incorrectly reported his working hours and absences, including by registering working hours on a flat-rate basis instead of following the employer’s flexitime agreement. The action was considered to constitute such a serious damage to trust that there was a legal basis for dismissal.

Background

The employee E.H. became employed by the Swedish Social Insurance Agency in 2012 and was since 2016 on full-time leave for assignments as a union representative. During her leave of absence, the Social Insurance Agency continued to pay E.H. salary, which is why she was obliged to report to the authority, among other things, absence and hours worked.

In the autumn of 2023, E.H.’s unit manager discovered during a routine check that E.H. had only taken two weeks’ holiday during the summer. This led to an investigation regarding the employee’s reported working hours. The investigation showed that E.H. had on several occasions reported sick leave and holiday to her union, but failed to make the corresponding report to the Social Insurance Agency. Instead, she had reported time as if she had been working. The investigation also showed that E.H. had abused the Swedish Social Insurance Agency’s flexitime system by registering working hours incorrectly.

On 24 October 2023, E.H. was notified of the intended dismissal, and on 20 December 2023, she was dismissed without notice from her employment with the Swedish Social Insurance Agency.

The union representing E.H., Akavia, brought an action claiming that the dismissal should be declared null and void and that E.H. should be awarded general and financial damages. In support of the action, Akavia argued, among other things, that E.H. had not made incorrect time reports to the extent claimed by the Swedish Social Insurance Agency. Akavia also argued that E.H., as a full-time union representative, had to be able to manage her working hours in a different way than regular employees, and that for practical reasons she could account for her working hours on a flat-rate basis.

Legal starting points

Dismissal under Section 18 of the Employment Protection Act (1982:80) (“LAS”) presupposes that the employee has grossly neglected his or her obligations to the employer. It must be a deliberate or grossly negligent practice of such a nature that it should not reasonably have to be tolerated in any legal relationship. The legal preparatory works show that a strict approach must be applied to crimes committed in the course of employment, which are directed against the employer or which take place in the workplace. However, the case-law of the Labour Court shows that dismissal without notice may also be considered in the event of other reprehensible conduct – both within and outside the employment – which constitutes a gross breach of the employee’s obligations.

The Labour Court’s assessment

To begin with, it may be mentioned that the Labour Court found that E.H. had the same obligation as other employees of the Swedish Social Insurance Agency to comply with the provisions of the Swedish Social Insurance Agency’s flexitime agreement and to report his actual hours worked. The court thus rejected Akavia’s argument that a union representative should have a special position in this regard and instead emphasised that E.H., as a union representative – and thus the bearer of the flexitime agreement that her organisation had agreed to follow – had all the more reason to ensure that she actually complied with the agreement.

Instead, the Labour Court found that E.H. had been obliged to report the actual time worked on a daily basis, or at least in such close proximity to the working day that the accounts were correct. A standard time registration was therefore not considered to be correct and compatible with the Swedish Social Insurance Agency’s flexitime agreement and what was incumbent on her in the employment.

When reviewing E.H.’s time reports, the Labour Court found that E.H.:

• failed to report sick leave on 22 May 2023 in violation of the Swedish Social Insurance Agency’s flexitime agreement,
• failed to report holiday on 10 and 11 August 2023 in violation of the Swedish Social Insurance Agency’s flexitime agreement,
• wrongly received compensation of SEK 3,000 for a postponed holiday day,
• registered approximately twice as much working time as she actually worked on 8 and 10 February 2023, and
• had taken flex leave for more than half a day on 27 and 28 March and a full day on 5 June 2023 without the Swedish Social Insurance Agency’s approval.

In assessing whether there were grounds for dismissal without notice, the Labour Court emphasised in particular that the Swedish Social Insurance Agency is responsible for paying benefits of significant amounts to the Swedish population and is tasked with ensuring that incorrect payments are not made. High demands must be placed on government employees in order to maintain public confidence in the business. Furthermore, since E.H. was not under the daily management of the Swedish Social Insurance Agency, it was of the utmost importance that she reported and registered her working hours correctly.

Overall, the Labour Court concluded that E.H. had repeatedly over a relatively short period of time incorrectly reported her working hours and absences in a way that affected her right to pay and the Social Insurance Agency’s ability to check the reported working hours. The action had caused such a serious damage to trust that E.H. had grossly neglected his obligations to the Social Insurance Agency. There was therefore a legal basis for dismissal without notice.

Setterwalls’ comment

We believe that the judgment is particularly interesting because it to some extent affects union representatives and their position in the workplace, albeit to a limited extent. The ruling makes it clear that union representatives with full-time assignments do not necessarily have a special position when it comes to following the employer’s routines for time reporting. Despite the fact that the elected representative is not under the employer’s day-to-day supervision, the obligation to comply with applicable agreements and rules of conduct remains – not least because the salary continues to be paid by the employer.

The ruling also underlines the special requirements placed on government employees, as well as the importance for state employers of maintaining public confidence in their operations. The Labour Court emphasises that high standard must be set for government employees in order to maintain this trust. An employee of an authority such as the Swedish Social Insurance Agency, whose core task includes counteracting incorrect payments, is therefore charged with a special responsibility to act correctly.