{"id":59076,"date":"2026-06-22T11:16:39","date_gmt":"2026-06-22T09:16:39","guid":{"rendered":"https:\/\/setterwalls.se\/?post_type=articles&p=59076"},"modified":"2026-06-26T11:30:40","modified_gmt":"2026-06-26T09:30:40","slug":"ad-2026-no-40-obligation-to-negotiate-under-the-co-determination-act-in-the-case-of-individual-agreements","status":"publish","type":"articles","link":"https:\/\/setterwalls.se\/en\/article\/ad-2026-no-40-obligation-to-negotiate-under-the-co-determination-act-in-the-case-of-individual-agreements\/","title":{"rendered":"AD 2026 No. 40 \u2013 Obligation to negotiate under the Co-determination Act in the case of individual agreements"},"content":{"rendered":"
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The court case concerned whether an employer without a collective agreement had breached the duty to negotiate under section 13, second paragraph, of the Co-determination Act by entering into agreements on the termination of employment with a number of employees without first initiating negotiations due to redundancy. The court found that agreements initiated by the employer on the grounds of redundancy should be regarded as dismissals within the meaning of the EU Directive on collective redundancies, and that the employer was under a duty to negotiate as soon as it became clear that redundancies were being considered or planned. The case also concerned whether the employer, separately from the obligation to negotiate, was obliged to inform trade unions not party to a collective agreement of the reasons for the planned redundancies under Section 19a of the Co-determination Act. The court also addressed the question of how the rules in the Market Abuse Regulation concerning the handling of inside information affect a listed employer\u2019s obligation to provide information to a trade union.<\/em><\/p>\n

Background:<\/strong><\/p>\n

The case concerned a listed company within a group, where the parent company\u2019s board of directors had adopted a budget focused on increased profitability. As a direct consequence of the budget, the company decided a few weeks later to reduce its workforce by 45 employees. The company was not bound by any collective agreement, but had employees who were members of, amongst others, the trade union Unionen.<\/p>\n

The company announced the decision to reduce the workforce on the same day it was taken and, at the same time, informed Unionen of the planned redundancies. In its communication, the company referred to a press release stating that the workforce would be reduced. It also stated that the company intended to offer the affected employees a settlement to terminate their employment. A week later, the company informed Unionen that agreements had been reached with the employees concerned and that the matter had been concluded. No negotiations with Unionen ever took place.<\/p>\n

Unionen took legal action against the company, claiming that the company had breached, firstly, the second paragraph of Section 13 of the Co-determination Act by failing to initiate negotiations before entering into the agreements with the employees, and, secondly, Section 19a of the Co-determination Act by failing to keep the union continuously informed of developments in the business in terms of production and finances, as well as the guidelines for personnel policy.<\/p>\n

The company contested the claim. The company argued that voluntary agreements do not constitute redundancies, that the background to the agreements was not redundancy, that the duty to provide information had been fulfilled through the information provided to Unionen when the company announced the planned staff reductions, and that the company had been prevented from informing Unionen earlier due to the Market Abuse Regulation concerning inside information.<\/p>\n

The Labour Court\u2019s assessment:<\/strong><\/p>\n

Legal basis<\/em><\/p>\n

Under section 13, second paragraph, of the Co-determination Act, an employer not bound by a collective agreement is obliged to negotiate, in accordance with section 11 of the Co-determination Act, with all relevant trade unions on matters relating to redundancies. This provision is based on the EU Directive on collective redundancies, which requires an employer considering collective redundancies to enter into consultations with employee representatives in good time with a view to reaching an agreement. The concept of \u2018redundancy\u2019 within the meaning of the Directive must be interpreted broadly to cover all cases where an employment contract ceases to apply without the employee\u2019s consent.<\/p>\n

The obligation to negotiate arises as soon as a strategic or commercial decision is taken that compels the employer to consider or plan collective redundancies, not only once the employer is certain that redundancies will in fact be necessary. Negotiations must be initiated in good time so that they form a natural and effective part of the decision-making process, and must be concluded before the employer takes a decision on the redundancies. The aim is to ensure that the possibility of avoiding redundancies, reducing the number of employees affected or mitigating the consequences remains.<\/p>\n

Employers who are not bound by collective agreements must, in accordance with Section 19a of the Co-determination Act, keep employee organisations continuously informed about how the business is developing. This duty to provide information includes, amongst other things, planned changes that are of significant importance to the employees. Furthermore, in connection with negotiations prior to a decision on redundancies, the employer must, in accordance with Section 15, second paragraph, of the Co-determination Act, notify the other party in writing in good time of, amongst other things, the reasons for the planned redundancies.<\/p>\n

Under the Market Abuse Regulation, the disclosure of inside information is prohibited, subject to an exception permitting disclosure that takes place as a normal part of the performance of duties, activities or obligations. Under Section 21 of the Co-determination Act, an employer may, during negotiations, request that information be subject to a duty of confidentiality.<\/p>\n

Assessment<\/em><\/p>\n

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  1. i) Breach of the duty to negotiate?<\/em><\/li>\n<\/ol>\n

    The Labour Court began by assessing the company\u2019s objection that the agreements could not be equated with dismissals. In this regard, the Court looked beyond the formal voluntary nature of the offers. Instead, the court noted that a refusal risked leading to worse terms and conditions, and that the information provided to the employees was designed to persuade them to accept, which made the scope for refusing extremely limited. The agreements were therefore, according to the court, to be regarded as redundancies within the meaning of the EU Directive on collective redundancies. The court also considered the reasons behind the agreements with the employees. In the case, the company had argued that personal reasons had been decisive in selecting which employees would be offered agreements. However, according to the court, it was clear that a reduction in staff was necessary for the company to achieve the budget target that had been decided by the parent company and communicated to the market, and that the agreements offered to the employees were intended to achieve that target and to avoid redundancies under the Employment Protection Act.<\/p>\n

    According to the Labour Court, the parent company\u2019s decision on the new budget therefore meant that the company was considering collective redundancies. The company was therefore under an obligation to enter into negotiations with Unionen in accordance with section 13, second paragraph, of the Co-determination Act as soon as it became clear that the company was one of the subsidiaries within the group where collective redundancies might be carried out. According to the court, this was the case when, shortly after the parent company\u2019s board of directors had adopted the budget, managers within the company were tasked with identifying employees within their respective teams for a possible offer of an agreement to terminate their employment.<\/p>\n

    The court also emphasised that, although the provision in section 13, second paragraph, of the Co-determination Act is intended to implement the provisions of the Directive on collective redundancies, the Act does not impose any requirement that the redundancies must be collective in the sense that a certain number of employees must be affected for the provision to be applicable (AD 2012 No. 2). The employer\u2019s duty to negotiate therefore arises as soon as it becomes clear that there is a possibility that an employee may need to be made redundant. <\/em>It does not need to be established that anyone will actually be made redundant for the duty to negotiate to arise.<\/p>\n

    Against this background, the Labour Court found that the company had breached the second paragraph of Section 13 of the Co-determination Act.<\/p>\n

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    1. ii) Breach of the duty to provide information?<\/em><\/li>\n<\/ol>\n

      According to the Labour Court, the staff reductions were matters relating to redundancy that fall within the scope of the primary duty to negotiate under the second paragraph of Section 13 of the Co-determination Act. The court noted that, when preparing a decision concerning redundancies, the employees\u2019 need for information is generally met through the employer\u2019s obligation to commence primary negotiations in good time in accordance with the second paragraph of Section 13 of the Co-determination Act, and to provide information in accordance with the second paragraph of Section 15 of the same Act in connection with this. The company had therefore been under an obligation to provide information on the staff reductions already within the framework of its obligation to conduct primary negotiations. According to the court, the company did not have a separate obligation to also inform the trade union of the same matter under Section 19a of the Co-determination Act.<\/p>\n

      iii) Did the Market Abuse Regulation prevent the company from providing information to Unionen earlier (before the information was made public)?<\/em><\/p>\n

      The information regarding the budget and the planned staff reductions constituted so-called inside information. Under the EU Market Abuse Regulation, inside information may not be disclosed except in certain specifically defined situations. The duty to negotiate and provide information under the Co-determination Act also stems from rules rooted in EU legislation. These are therefore two separate sets of rules with different purposes, both of which are based on EU law. According to the Labour Court, therefore, the mere fact that the information constituted inside information within the meaning of the Market Abuse Regulation did not mean that the provisions of the Co-determination Act would not apply. The company had not, therefore, been prevented from providing information to Unionen under the Co-determination Act solely on the grounds that the information was inside information under the Market Abuse Regulation. Instead, it was incumbent on the company to fulfil its obligations under both sets of regulations. The Labour Court specifically pointed out that there are exceptions to the prohibition on disclosure where such disclosure takes place as a normal part of the performance of duties, activities or obligations, and that the company had also had the opportunity to negotiate a duty of confidentiality under Section 21 of the Co-determination Act.<\/p>\n

      Overall, the Labour Court therefore held that the company could not avoid liability for a breach of the second paragraph of Section 13 of the Co-determination Act on the grounds that the information constituted inside information.<\/p>\n

      Setterwalls\u2019 comment:<\/strong><\/p>\n

      The ruling creates fundamental problems for the management of redundancy situations which, in our experience, employers without collective agreements have regarded as both practical and a \u2018win-win solution\u2019<\/em> (i.e. a solution that has benefited not only the employer but also the employee), and which means that the cost the employer would otherwise have incurred in terms of time and resources for trade union negotiations is instead offered to the employee, who receives more generous severance terms than in the case of a standard unilateral termination. In our experience, this type of approach is very common. The cost that the employer would otherwise have incurred in terms of time and resources for trade union negotiations is instead offered to the employee, who receives more generous terms of termination than would be the case with a standard unilateral termination. The fact that the Labour Court has now ruled that such a practice is not compatible with the law means that employers not bound by collective agreements must fundamentally review how redundancy processes are handled, and in particular when and how settlements are offered. Furthermore, it cannot be ruled out that the ruling may lead to employers offering generous settlements less frequently in redundancy situations.<\/p>\n

      The practical implications of the ruling are yet difficult to fully assess, and the ruling requires further analysis. For the time being, the clear advice to employers considering offering a settlement as an alternative to redundancy is to first initiate negotiations with the relevant trade union. Exactly when and how this should be done needs to be carefully assessed in consultation with legal advisers.<\/p>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/section>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":11,"featured_media":58600,"template":"","meta":{"_acf_changed":true,"_seopress_robots_primary_cat":"","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":""},"article_category":[1043],"class_list":["post-59076","articles","type-articles","status-publish","has-post-thumbnail","hentry","article_category-employment-and-pension-law"],"acf":[],"_links":{"self":[{"href":"https:\/\/setterwalls.se\/en\/wp-json\/wp\/v2\/articles\/59076","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/setterwalls.se\/en\/wp-json\/wp\/v2\/articles"}],"about":[{"href":"https:\/\/setterwalls.se\/en\/wp-json\/wp\/v2\/types\/articles"}],"author":[{"embeddable":true,"href":"https:\/\/setterwalls.se\/en\/wp-json\/wp\/v2\/users\/11"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/setterwalls.se\/en\/wp-json\/wp\/v2\/media\/58600"}],"wp:attachment":[{"href":"https:\/\/setterwalls.se\/en\/wp-json\/wp\/v2\/media?parent=59076"}],"wp:term":[{"taxonomy":"article_category","embeddable":true,"href":"https:\/\/setterwalls.se\/en\/wp-json\/wp\/v2\/article_category?post=59076"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}