no redundancy pay is stipulated. While the grounds for collective redundancies are very liberal
they are to proceed in accordance with seniority. The presumption of the open-ended contract
permeates labour law. For example, if it is unclear as to what type of contract was made, the
Labour Court places the burden of proof on the party claiming that the contract was not open-
ended, i.e., usually the employer.
Until 1997, the law listed a number of specific circumstances when the employer may use a
fixed-term contract. By far the most common form is hiring a replacement for an absent
employee (leave replacement). Another frequently used contract involves work that is
intrinsically of a fixed duration, such as project work that is common in, for example,
construction and research. Contracts for a probationary period and those motivated by a
temporary increase in labour demand may be made for a maximum duration of six months.2
As regards the regulation of open-ended contracts the Swedish legislation has been judged to
be roughly as strict as in Finland and Norway (OECD, 1999). The outlier in the Nordic context is
Denmark, which is clearly placed in the Anglophone cluster of less regulated employment
protection regimes. Denmark is also the least regulated country as regards fixed-term contracts.
At least up to the mid-1990s, the regulation of fixed-term contracts in Finland and Norway was
rather similar to that in Sweden.
2.2 Labour Law and Collective Bargaining
Any assessment of the impact of employment protection in Sweden must, in addition to statutory
law, consider both the relationship between law and collective agreement and the content of
collective agreements. In both respects Sweden is rather unique. In most countries statutory law
is a floor of guaranteed minimum worker rights upon which collective agreements may build, but
not erode, further protection for the employee. In Sweden, however, several paragraphs of the
2 What we refer to as fixed-term contracts may sometimes easily be terminated before their expiration date. A
probationary contract, which can be terminated at any time by either party at will, is a case in point.