Nordic Employment Law Bulletin - July 2025

A new holiday year is coming soon. In Denmark, the holiday year runs from 1 September to 31 August the following year and therefore there are only a few months left in this holiday year. There is concurrent holiday meaning that every employee can take paid holiday as soon as the holiday has been accrued. An employee earns 2.08 days of holiday for each month of employment. The holiday-taking period is the holiday year plus four months from 1 September to 31 December next year. Therefore, there is still time for employees to take their accrued, but untaken holiday. However, employers are encouraged to check how much holiday employees have left so that employees can take their holiday in a way that is consistent with the employers’ business. 

Changes to Aliens Act 11 June include important implications for employers – If an employee is working in Finland on a work-based residence permit and the employee’s employment ends, the employee will have 3 months to find a new job. Otherwise the process to cancel the residence permit will commence. The time period is 6 months if the employee has a residence permit for a specialist, a person working in top or middle management, an ICT permit or an EU Blue Card or if the employee has another type of residence permit issued on the basis of employment for at least two years. Unlike before, employees may become employed in another sector on the basis of valid residence permit for an employed person if the sector has been declared as a sector affected by national labour shortage in Finland.

Employers must notify the Immigration Service of termination of employment within 14 days from last day of employment. The notification can be made via online platform Enter Finland. Furthermore, employers must submit an employee announcement when hiring a person from outside the EU/EEA countries who already has a valid residence permit and right to work. The announcement must be submitted within 7 days as of commencement of employment via Enter Finland.

Changes to Co-operation Act enter into force on 1 July 2025 – Employers that regularly employ 20-49 employees are required to conduct change negotiations in connection with redundancies only if the employer is considering measures to reduce the number of at least 20 employees over a 90−day period. The duration of the negotiations will be 7 days. Lay-offs lasting maximum of 90 days will not require change negotiations. The obligations regarding the continuous dialogue have also been alleviated. For companies with at least 50 employees, the minimum duration of the change negotiations will be 3 weeks or 7 days, depending on the planned measures and their scope. All employers should, however, note that if a CBA is followed as “normal binding” on the basis of a membership in the employer association, the CBA provisions overrule the statutory regulations for example with respect to duration of negotiations.

Furthermore, regardless of headcount, an employee’s employment must not end before 30 days have elapsed from the date the proposal to commence change negotiations was submitted to the employment authority.

Legislative Amendment to Norwegian Requirements for Domestic Shipping and Offshore Service

The government has adopted legislative amendments to ensure that workers on ships in Norwegian waters and on the continental shelf receive Norwegian wage conditions. Changes to the General Application Act and the Petroleum Act aim to promote fairness in the maritime labour market by preventing wage competition from foreign-flagged vessels with significantly lower pay. The new rules apply to domestic shipping—where trade unions can demand that collective agreements cover all crew regardless of nationality—and to offshore services such as petroleum, aquaculture, offshore wind, seabed minerals, and carbon capture, where licence holders must ensure compliance. The amendments to the General Application Act will enter into force on 1 July. Amendments to the Petroleum Act and other sector-specific legislation will enter into force on 1 January 2026. The amendments aim to reinforce Norwegian values and make maritime careers more attractive.

Amendments to the Working Environment Act Strengthen the Labour Inspection Authority’s Mandateand Changes to Age Limit Regulations

On 20 June 2025, the Council of State approved amendments to the Working Environment Act, expanding the Labour Inspection Authority’s powers to address workplace crime. Effective from 1 July 2025, the Labour Inspection Authority may now secure evidence by court order and impose on-the-spot administrative fines for clear legal breaches. The duty to provide information is also extended to certain third parties, with safeguards for necessity and proportionality. Sensitive personal data under Article 9 of the GDPR remain protected. The liability standard for fines is clarified, requiring negligent or intentional violations, and the limitation period is extended from two to five years.

Furthermore, the Norwegian government has adopted amendments to the Working Environment Act removing the option for employers to set an internal company age limit of 70. Currently, the Act allows employment to be terminated at 72, with an exception enabling companies to set a lower age limit down to 70 under certain conditions. From 1 January 2026, this exception will be abolished, establishing a uniform legal age limit of 72 in most workplaces.

New Court Ruling Regarding Disclaimer of Employment Protection Rights (Hålogaland lagmannsrett - Dom: LH-2024-202194 - Lovdata)   

In September 2024, the Court of Appeal ruled that a certain degree of objectivity is required when terminating a senior executive, even if they have waived statutory dismissal protection in return for severance pay. The Supreme Court later overturned that decision and remitted the case for reconsideration. In its new judgment, published on 25 May 2025, the Court of Appeal reaffirmed that an employer’s managerial prerogative is not unlimited — a requirement of objectivity still applies. The court stated that: "If, for example, the employer’s decision is based on a defamatory rumour without any basis in reality, leading to a hasty termination of the employment relationship without a minimum of investigation or a genuine opportunity for the employee to respond, this could violate general standards of reasonableness."

Under the Working Environment Act, a senior executive may waive dismissal protection in exchange for severance pay, allowing the employer to terminate the relationship without cause or formal process. In this case, the municipal chief executive had such an agreement but challenged the termination as invalid. The court found that even with a severance clause, there is an implied duty to act objectively when terminating a managing director. It remains to be seen whether the ruling will be appealed again. If upheld, the decision is likely to influence similar cases going forward.

Swedish employer faces significant safety fines after fatal accident

Billerud Skog & Industri AB has been sentenced to one of the highest corporate fines ever imposed for work environment safety violations after an employee died from hydrogen sulfide poisoning at the company's Frövi facility in April 2023. The district court has imposed a corporate fine of 17.4 million SEK (approximately 1.6 million EUR) on the company, plus damages of 110,000 SEK each to four of the deceased's relatives. The fine ranks among the highest ever imposed in Sweden for work environment-related crimes, signaling the court's serious view of corporate responsibility for employee safety in the workplace.

First whistleblower law ruling 

Three years after Sweden's whistleblower act was introduced, the Labor Court has issued its first ruling in a landmark case, ruling in favor of the employer. A surgeon who filed 71 incident reports over 19 months at a private healthcare company lost her compensation claim. The surgeon alleged she was punished with reassignment and suspension following her reports, while the company claimed the conflict stemmed from personal disputes with an anesthesiologist. The court assessed whether the reports concerned "misconduct of public interest". The reported incidents included interrupted phone calls, COVID-related patient rescheduling, improperly connected equipment during surgery, and poor communication in the operating room. The court ruled that the incidents did not constitute misconduct of such public interest as required by the whistleblower act. 

Sweden's job market paradox — too many unemployed but not enough workers

Sweden's Employment Agency has revised its unemployment predictions due to growing concerns over trade tariffs and ongoing global conflicts. The agency now predicts that unemployment will reach 7.0% in 2025 (from 6.9%) and 6.8% in 2026 (from 6.6%). Agency analysts report that uncertainties are causing households and businesses to tighten spending. The pessimism particularly extends to Swedish households, especially those with lower incomes. Union economists attribute this disparity to 2024's interest rate cuts, which significantly benefited high earners while low-income households - often renters - faced substantial rent increases. To support struggling families, the association LO (the national umbrella organization for blue collar trade unions) has called for increased child allowances and expanded vocational training investments. Despite the gloomy outlook, severe labor shortages persist across multiple sectors. Nearly one third of professions face staffing gaps, according to an Employment Agency report. Such gaps affect nurses, chefs, auto mechanics, systems analysts, IT architects, special education teachers, and electricians, to mention a few.