Administrative Court of Appeal in Stockholm, Case No. 1672-25 – Sanction fee for violation of the Working Hours Act (1982:673)

The Swedish Administrative Court of Appeal in Stockholm reduces sanction fee for unlawful additional hours (Sw. mertid) but confirms a violation of Section 10 of the Working Hours Act for certain part‑time employees. The employer succeeded in reducing the fee after supplementing information on employees’ contracted hours. Objections concerning breaks, COVID‑related extra hours, and equitable reduction were rejected.

Background

The employer, a company engaged in retail and the provision of repairs and servicing of mobile phones, was ordered by the Administrative Court in March 2025 to pay a sanction fee of SEK 704,956. The fee was set on the basis that ten employees, during January-October 2021, had worked additional hours in excess of what is permitted under Section 10 of the Working Hours Act. The company appealed the Administrative Court’s judgment and argued, among other things, that certain employees had a higher contracted level of employment than the Administrative Court had assumed, that breaks had been incorrectly counted as working time, and that pandemic‑related circumstances justified additional hours or a reduction of the sanction fee.

Legal framework

According to Section 10 of the Working Hours Act, additional hours for part‑time employment may be taken out up to a maximum of 200 hours per calendar year. Additional hours refer to time that exceeds the regular working hours and on‑call time under the employment contract. Extra additional hours pursuant to Section 10a of the Working Hours Act may be taken out up to an additional 150 hours if there are special reasons and the situation could not be resolved in any other reasonable way.

It follows from Section 26 of the Working Hours Act that in the event of a violation of Section 10 of the Working Hours Act without support in a collective bargaining agreement, an administrative sanction fee must be imposed. The fee may be reduced if the violation is minor or excusable, or if it is otherwise unreasonable to impose the fee (see Section 26b, second paragraph of the Working Hours Act). A break, according to Section 15 of the Working Hours Act, means an interruption during which the employee is not obliged to remain at the workplace; meal breaks are instead counted as working time.

The assessment of the Administrative Court of Appeal

In the Administrative Court of Appeal, the company submitted employer certificates and employment contracts to demonstrate that certain employees had a higher working‑time measure than the 20 hours per week on which the Swedish Work Environment Authority had based its assessment. In light of the supplementary evidence, the court found that two employees had regular working hours of 40 hours per week and that a third had regular working hours of 30 hours per week.

The court therefore held that the rules on additional hours were either not applicable – which applied to those working full‑time – or had not been exceeded – which applied to the employee with regular working hours of 30 hours per week. These three employees were therefore excluded from the calculation of the administrative sanction fee. For the other affected employees, the court found that there was no evidence showing that their regular working hours exceeded 20 hours per week; their additional hours were therefore to be calculated based on a 20‑hour contract.

On the issue of breaks versus meal breaks, the Administrative Court of Appeal found that the employees were neither free to leave the workplace nor fully released from work. They had worked alone, needed to remain available, and in practice stayed in the shop during their lunch break. The time for the break had moreover been compensated by the company. The breaks were therefore assessed as meal breaks (Sw. måltidsuppehåll) and counted as working time.

The company invoked COVID-19 as a special reason for additional hours and as a basis for reducing the sanction fee. The Administrative Court of Appeal found that the use of additional hours had occurred over a relatively long period and did not constitute temporary solutions during a transitional period. The circumstances were not considered unforeseen in the sense required for additional hours. Nor was the violation deemed minor, excusable, or the fee disproportionate in light of the circumstances.

In summary, the Administrative Court of Appeal held that the company had violated Section 10 of the Working Hours Act and should be imposed a sanction fee. However, the fee was adjusted to exclude three employees from the calculation base and was set at SEK 321,776 kronor (compared with SEK 704,956 in the Administrative Court).

Setterwalls’ comments: The ruling is an important reminder of the need to carefully and thoughtfully determine an employee’s contractual working hours in part-time employment. If contractual working hours are set too low and does not correspond to how the employee actually works, there is a risk that the annual limit for permissible additional hours will be exceeded. In such a situation, the employer risks violating the Working Hours Act and incurring administrative penalties. At the same time, the parties should not agree on working hours that is too high if the intention is not that the employee will in fact work to that extent. This is because the employee may then claim a right to work more on the basis of the agreed contractual hours. Furthermore, it is important that any changes to an employee’s ordinary working time are regulated and documented in a satisfactory manner.

The ruling also clarifies the difference between a break and a meal break, as well as the importance of the employer being well acquainted with this distinction. As a general rule, employees should be able to leave the workplace during their lunch break and be released from work. If the employee is not truly released and free to leave the workplace – particularly in cases of solitary work or requirements to remain available – the break is treated as a meal break and must be counted as working time. This may, in practice, affect the calculation of additional hours in its entirety.