10.6092/issn.1561-8048/10997
In this article, the concept of the employer is analysed for Swedish conditions from a variety of perspectives. The special difficulties that face the private sector are charted, as are the principles of the legal subject in triparty contracts with temporary employment agencies, platform work, and umbrella companies. Found to go hand in hand with the concept of employee, the concept of the employer in the Swedish public sector is now far closer to the standard concept in the private sectordue to the principles of the functional concept of the employer. The concept of the employer in tax law and social security legislation, which have different purposes, differs from labour law.
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Who counts as an employer in Sweden?
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Who counts as an employer in Sweden?
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Who counts as an employer in Sweden?                                                Italian Labour Law e-Journal
Annamaria Westregård                                                                       Issue 1, Vol. 13 (2020)
annamaria.westregard@har.lu.se                                                                   ISSN 1561-8048
                                                                  https://doi.org/10.6092/issn.1561-8048/10997




                 Who counts as an employer in Sweden?
                                       Annamaria Westregård


 1. Introduction. 2. The concept of the private sector employer. 2.1. The legal subject. 2.2.
 Concern groups. 3. Triparty contracts. 3.1. Temporary employment agencies. 3.2. Platform
 work. 3.3. Umbrella Companies. 3.4. Double employer responsibility in triparty
 constructions. 4. Public sector employers 5. Social security and tax law. 6. Conclusions



                                                   Abstract

     In this article, the concept of the employer is analysed for Swedish conditions from a variety of
     perspectives. The special difficulties that face the private sector are charted, as are the principles
     of the legal subject in triparty contracts with temporary employment agencies, platform work,
     and umbrella companies. Found to go hand in hand with the concept of employee, the concept
     of the employer in the Swedish public sector is now far closer to the standard concept in the
     private sector due to the principles of the functional concept of the employer. The concept of
     the employer in tax law and social

     Keywords: Employer; Triparty contracts; Temporary employment agencies; Platform work;
     Umbrella companies.


 1. Introduction.

    The question of who is an employee and who is an employer may not seem complicated
 at first glance since both are parties in the employment contract, but the answer can be
 difficult to determine. The reason for identifying someone as either an employee or self-
 employed in a binary system is to decide whether labour legislation and collective agreements
 are applicable, which they are not if the performing party is self-employed. The reason for
 identifying the employer is to determine who will carry out employer’s responsibilities.
    How the terms employment, employee, or employer are defined in Sweden varies between
 the different parts of the legal system, whether labour law, social security legislation, tax law
 etc. Legislation is interpreted according to the sources of the statutory acts. If the
 interpretation of the statutory act is unclear, the travaux préparatoires are important sources,
 with the findings of public inquiries about new legislation drawn up as Government white
 papers (SOU) or particularly in Bills to Parliament (proposition). The content of statutory act
 is clarified by caselaw, and here the Labour Court’s rulings are of special interest. The



 
  Associate Professor and Senior Lecturer in Business Law, School of Economics and Management, Lund
 University, Sweden. This article has been submitted to a double-blind peer review process.
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doctrine in the legal literature has an impact, especially the arguments about to interpret the
other sources1.
    Far more effort has gone into identifying the employee than the employer. That is because
in Swedish legislation the employer is normally not identified. The concept of the employer
only mirrors the concept of the employee for example in Section 1 (2) of the 1976 Co-
Determination Act (1976:580), which identifies the employer as ‘the party on whose behalf
the employee performs work’. The Labour Court has said that the employer is ‘the physical
or legal person who has concluded a contract with another (physical) person so that this
person must perform work under such circumstances that an employment contract is called
for2.
    Sweden has a binary system where the performing party is employed or self-employed.
Anyone who is not an employee is self-employed, and thus only the employees with
employers who have principals. The concept of the employer in Sweden cannot be defined
independently of the concept of the employee. To separate the employee from the self-
employed, lists based on the legal sources are presented by various legal authorities. Common
to all areas of legislation is that the definitions are based on core criteria so important that
they all must always be present if a relationship is to count as an employment3. These core
criteria are a contract by which a performing party must personally perform work on behalf of another party.
    Then, depending on the situation and the legislation, Adlercreutz, Malmberg, Bruun, and
other authorities, add other circumstances of importance for the overall assessment. The
circumstances are based on binding legal sources as caselaw and on the travaux préparatoires.
The circumstances are not all important simultaneously in all situations: the criteria and their
relative importance (if some are fulfilled but others are not) in each case varies, and their
importance is described (if described at all) in the legal sources as the legislative preparatory
work, caselaw, and doctrine. The result of the overall assessment in individual cases also
depends as always on the situation, and how the court evaluates the evidentiary facts. These
lists of circumstances of importance vary depending on the author and most include for
example4:
             - work is performed under the principal’s leadership and control (employment)



1  See R. Fahbeck, T. Sigeman, European employment and Industrial relations Glossary: Sweden, 2001, in Sweet &
Maxwell, London, 2001, 286 ff.
2 Labour Court ruling 1984 no 141; Lunning L., Toijer G., Anställningsskydd: En lagkommetar, 11th ed., Wolters

Kluwer, Alphen aan den Rijn, 2016, 41.
3 Originally Adlercreutz A. G, Arbetstagarbegreppet, Norstedts, Stockholm, 1964, 186, 276 ff.) and later Malmberg

J., Bruun N., Hållfast arbetsrätt för ett föränderligt arbetslivs, 111 n. 63, identified the set of relevant circumstances
or criteria, all them fundamental prerequisites (grundrekvisit); also Westregård, A., The Notion of `employee´ in
Swedish and European Union Law. An Exercise in Harmony or Disharmony?’, in Carlson, L., Edström, Ö., Nyström,
B. (eds), Globalisation, Fragmentation, Labour and Employment Law – A Swedish Perspective, Iustus, Uppsala, 2016 185-
2014; Westregård, A., Collaborative economy – a new challenge for the social partners in Vänbok till Niklas Bruun,
November, Iustus, Uppsala, 2017, 427-438; Westregård A., Delningsplattformar och crowdworkers i den digitaliserade
ekonomin—En utmaning för kollektivavtalsmodellen, in Nyström B., Arvidsson N., Flodgren B. (eds.), Modern
affärsrätt, Wolters Kluwer, Alphen aan den Rijn, 2017.
4 Adlercreutz A. G., n. (3), 1964, 186, 276 ff.; Ds. 2002:56 Hållfast arbetsrätt för ett föränderligt arbetslivs 111 n. 63;

Källström, K., Malmberg J., Anställningsförhållandet, Iustus, Uppsala, 2019, 26; Sigemen T., Sjödin S., Arbetsätten:
En översikt, Wolter Kluwer, Alphen aan den Rijn, 2017, 31: Inghammar, A. The Concept of “Employee”: The Position
in Sweden, Restatement of Labour Law’ in Waas B., Heerman van Voss G, The Concept of Employee, Hart Publishing,
Oxford, 2017, 686; Lunning L., Toijer G., n. (2), 27.

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             - whether the workload is measured by duration (employment) rather than
         specific duties (self-employment)
             - whether the performing party only has one principal (employment) or two or
         more (self-employment)
             - machinery and equipment (the self-employed provide their own equipment)
             - form of payment (employees are paid a salary)
             - social criteria and industry practices (varies between industries)
             - the parties’ intentions (the contract is of some interest, but in cases of false
         self-employment the Labour Court ignores it)
             - if the contracting party that is going to perform the work is a company (an
         argument for self-employment) or physical person (employment).
   If the core conditions are met and an overall assessment of the other criteria results
determines that the relation is an employment, then definition of the concept of the employer
reflects that definition.
   In this article, the concept of the employer is analysed from a variety of perspectives.
Section 2 considers the special difficulties of the private sector, highlighted in concern
groups, triparty contracts with temporary employment agencies, platform work and umbrella
companies. Section 3 analyses the concept of the employer in the Swedish public sector, and
Section 4 addresses the concept of the employer in tax law and social security legislation,
which differs from labour law analysed. There are conclusions in Section 5.


2. The concept of the private sector employer.

2.1. The legal subject.

    The concept of the employer in Swedish legislation is based on the principle of the legal
subject. The legal or physical person who concludes the employment contract is regarded as
the employer. For trading partnerships (handelsbolag), limited partnerships (kommanditbolag),
limited companies (aktiebolag), and closely held companies (fåmansaktiebolag) the legal person
is contractually part of the employment contract. It is the company, not the shareholders,
which is regarded as the employer. That is why the assignation of shares not is regarded as a
change of employer. If the corporate form is sole trader (enskild firma) then the owner of the
company also is the employer5.
    If it is unclear whether it is a physical person or his company that is the employer, it is the
employer’s responsibility to clarify for the employee who is the employer. In the caselaw, the
Labour Court has tried to identify who concluded employment contracts6. Directive
91/533/EEC Article 2.2 (a) (14 October 1991) spells out the employer’s obligation to inform
the employee about the conditions applicable to the contract and the identities of the parties,
this is implemented in Section 6 c of the 1982 Employment Protection Act (SFS 1982:80).
The information from the employer can be of some help in identifying the real employer,


5   Lunning L., Toijer G., n. (2), 41.
6   See Lunning L., Toijer G., (2), 49 ff. and, for example, Labour Court ruling 1976 no 128 and 1995 no 84.

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but if there are any doubts as to whether the information is correct, the written information
is only one proof among others in the court’s evaluation of evidence7.


2.2. Concern groups.

   The employer’s responsibilities are limited to the specific legal person who is party to the
employment contract. If an employee is employed in a subsidiary in a concern, the employers’
responsibilities do not stretch beyond the subsidiary, who have all employer responsibilities.
Normally the employee has no claims on other companies in the concern, not even on the
controlling company8. There are very few exemptions in the statutory regulations9. The social
partners, at an industry level, can agree in a collective agreement that the concept of the
employer in that specific industry is extended to concerns.
   If the structure of a company changes and it unbundles its holdings or is divided into
subsidiaries the result might be different responsibilities for the new employer. With a ‘new’
minor employer the employee’s employment protection could be inferior to what it was with
the ‘old’ major employer10. If the company is divided into smaller subsidiaries the possibilities
of e.g. a transfer are more limited. Only jobs in the (smaller) subsidiary where the person is
employed will be suggested. In cases of redundancy the selection category will be limited to
that subsidiary. As the order of selection is based on the length of service this will be of
disadvantage to employees with a long employment in the former company as the selection
category in the subsidiary is smaller.


3. Triparty contracts.

3.1. Temporary employment agencies.

   In the early 1990s, temporary agency workers first appeared in the Swedish labour market.
Initially there were legal questions about on whose behalf employees were working—for the
temporary work agency or the end user11. According to the principle of legal subject have the
Labour Court and also doctrine pointed out the importance of who are the parties in the
contract12. This mean that in most cases will the temporary work agency be the employer.

7 See C-253/96 - Kampelmann m.fl. mot Landschaftsverband Westfalen-Lippe m.fl. ECLI:EU:C:1997:585 and
Lunning L., Toijer G., (2), 323 ff.
8 Lunning L., Toijer G., (2), 41.
9 See, for example, how length of service is counted in Sections 22 and 25 of the 1982 Employment Protection

Act.
10 Lunning L., Toijer G., (2), 41.
11 Directive 2008/104/EC of the European Parliament and of the Council on temporary agency work was

implemented in the Agency Work Act (SFS 2012:854) and its definitions. Section 5 § 1 and 2 of the Temporary
Work Act: ‘1. Temporary work agency: Any natural or legal person who employs temporary agency workers in
order to assign them to user undertakings to work under their supervision and direction; 2. User undertaking:
Any natural or legal person for whom, and under the supervision and direction of whom, a temporary agency
worker works temporarily.’
12 Labour Court ruling 2006 no 24; see also Lunning L., Toijer G., (2), 55; Selberg N., Arbetsgivarbegreppet och

arbetsrättsliga ansvar i komplexa organisationer: En studie av anställningsskydd, diskriminering och arbetsmiljö, Media-Tryck,
Lund, 2017, 191–2.

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    The parties to the labour market took an active approach to the situation, and in a relative
short time they had included Temporary agency work in the collective agreement system 13.
The result is that the temporary employment agencies now forms a separate branch of
industry where the employees are employed by temporary employment agencies, which take
full employment responsibility for them. There are still some responsibilities for the end user
in the 1977 Work Environment Act, see below in section Double employer responsibility in triparty
constructions.
    Thus, in contrast to many other countries, Sweden gives temporary agency workers a level
of security approaching that of ‘regular’ employees. Collective agreements seem to have
solved most problems related to who formal parties to the employment might be.


3.2. Platform work.

   In Sweden, as elsewhere, online platforms have a variety of business models. If the
platform only brings together the platform worker and the service consumer14, the service
consumer could be the employer or the platform worker could be self-employed. In more
established platform companies goes all contact between service producers and consumers
via the platform. The platform also has a clear set of rules for how services should be
provided, price setting, and so on. The platform provides the service, which the platform
worker then performs15. There have not yet been any cases in the Swedish Labour Court
about who is the employer in this situation, but it is likely that the platform will be judged as
the employer.
   The collaborative economy differs greatly from what is customary in the Nordic model,
where collective agreements are the self-evident and most important regulatory instrument.
One problem is that the platforms’ representatives claim that platform employees are self-
employed. Since they argue they are not employers and thus have no employers’
responsibilities, they also have no interest in joining employers’ organisations or regulating
working conditions in collective agreements. Until the employers take on a more organised
form, there will be no collective agreements. A single employer can of course also conclude
collective agreements on a local, company level (an application agreement). Sometimes the


13 In 2000 the Employers’ Organisation for the Swedish Service Sector (Almega) and all LO organisations made
a collective agreement for blue-collar workers, LO’s collective agreement on general employment conditions
with Almega Temporary Work Agencies. See also the collective agreement for white-collar employees between
the Union and the Academic Alliance with the Almega temporary work agencies on general employment
conditions. The Swedish Association of Graduate Engineers represents the Academic Alliance; the Academic
Alliance includes a variety of associations for professional occupational groups, including university teachers
(Akademikerförbundet SSR, Sveriges universitetslärarförbund), physiotherapists (Sveriges Arbetsterapeuter,
Fysioterapeuterna), scientists (Naturvetarna), and engineers (Sveriges Ingenjörer).
14 Here the term platform workers is used in the same meaning as service provider in and service consumer here is

used in the same meaning as in Communication from the Commission to the European Parliament, the Council,
the European Economic and Social Committee and the Committee of the Regions, A European agenda for the
collaborative economy, Brussels 2 June 2016 COM (2016), 356 final p. 3
15 See De Stefano V., The rise of the “just-in-time workforce”: On-demand work, crowdwork and labour protection in the “gig-

economy”, ILO, Conditions of Work and Employment, 71, 2016, 1; Communication from the Commission to the
European Parliament, the Council, the European Economic and Social Committee and the Committee of the
Regions, A European agenda for the collaborative economy, Brussels 2 June 2016 COM (2016), 356 final.

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parties use an already existing collective agreement for another industry16. Such arrangements
do not contribute to creating an industry of their own for platform workers.


3.3. Umbrella companies17.


    A new business model rapidly adopted in Sweden is a version of the umbrella company
(egenanställningsföretag in Swedish)18. Umbrella companies are similar to temporary employment
agencies in their operations, with the difference that a temporary employee works when the
employer decides, while the umbrella company worker of an umbrella company decides
when to work and then ‘hires’ an employer.
    Umbrella companies in Sweden have a special design: the umbrella company worker (to
bee) bids for work, and, if successful, arranges both the work and the remuneration with the
client. The umbrella company worker (to bee) then makes sure the client has signed a
contract with the umbrella company. The umbrella company and the umbrella company
worker the signs a short fixed-term employment contract for the duration of the assignment.
The client is invoiced by the umbrella company when the work is done. Once the client has
paid the umbrella company, the performing party is credited, after deductions for tax, social
security contributions, and the umbrella company’s commission19.
    In the collaborative economy, platforms use umbrella companies as middlemen. Umbrella
companies are also used in more traditional industries such as journalism, the arts, etc. The
business model is popular among workers who do not want to have responsibility for their
own company, for example arranging to pay taxes, social fees, and other administrative
responsibilities.
    Swedish umbrella companies have a trade association, where membership is predicated
on companies taking responsibility for the performing parties for the time they are working20.
According to the intention of the parties are umbrella company workers employees, and have
a short fixed-term employment contracts for the duration of the assignment. The generous
possibilities for fixed-term employment in Sweden are essential for the umbrella companies’
business model21.
    Even if the intention of the parties is that there is a short fixed-term employment contract
so is the legal problem that umbrella companies do not have a roll of an ordinary employer.

16 See more about industrial relations in Sweden in Westregård A., Sweden, in Liukkunen U., Collective Bargaining
in Labour Law Regimes A Global Perspective Ius Comparatum –Global Studies in Comparative Law, Vol. 32, Springer,
Berlin, 2019.
17 See also Westregård A., Looking for the (fictitious) Employer – Umbrella companies: The Swedish Example, in Chesalina

O., Becker U. (eds.), Social Law 4.0: New Approaches for Ensuring and Financing Social Security for Digital Age, 2020,
pending.
18 SOU 2017:24 167. According to the branch organization, the number of umbrella companies employees

grew from 4,000 in 2011 to 44,000 in 2017, and increased by 31 per cent in 2016,
http://www.egenanstallning.org/index/news (accessed 30 March 2019); see also Eurofound, New forms of
employment, (Publications Office of the European Union, 2015).
19 See SOU 2017:24, 161 ff., 198; Swedish Tax Agency,

www.skatteverket.se/privat/skatter/arbeteochinkomst/inkomster/egenanstallning (accessed 30 March 2019);
Eurofound, n. (18), 2015, 120.
20 http://www.egenanstallning.org/ (accessed 30 March 2019).
21 This is possible due to Sections 5 and 5(a) of the 1982 Employment Protection Act (1982:80).




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It is the umbrella company worker and the client that have control of the assignments, when
and how the work will be carried out. The umbrella company’s role is to administrate taxes,
social security fees, invoice the client and pay remuneration. One could ask if the umbrella
company worker could manage without the umbrella company and be a self-employed
person who carry out the administration himself.
    The Swedish Labour Court has not yet had any cases deciding whether umbrella company
workers are employees according to the 1982 Employment Protection Act. The concept of
employment is wide, and according to the travaux préparatoires, in dubious cases shall the
concept of employment be interpreted as if there is an employment at hand22. The intention
is to avoid “false self-employed”. As there are an employment contract and as umbrella
company takes on employers responsibilities for the duration of the assignments it will very
well be the case that the Labour court regards the relation as an employment when it comes
to regulate the conditions between the umbrella company and the umbrella company worker.
This could be different if the employment have importance in relation to a third party, like
order of priority in case of bankruptcy23. The interpretation of the concept employment on
unemployment benefits have varied so fare in the settled caselaw from the Administrative
Court of Appeal, see section 4. Here is seems more urgent to revile “false employees”.
    Another question is whether umbrella companies are covered by the Agency Work Act
(2012:854). That depends on the interpretation of the definition of temporary employment
agencies in Section 5 (1). Where an umbrella company is judged a temporary work agency,
the consequence is that its employees are entitled to the basic working and employment
conditions set down in the end-user’s collective agreements and other binding general
provisions24. Umbrella companies scarcely existed in Sweden in 2012 when the statutory act
was passed, and they were not mentioned in preparatory work for the Bill put to Parliament25.
By the the statutory act, temporary agency work is when a company employs temporary
agency workers in order to assign them to work for end-users, under their supervision and
direction. If a company instead places its employees to do a particular job under its direction
for another company, then that is contract work, which is not covered by the statutory act26.
Any decision whether a company is a temporary work agency or not must also correspond
to the interpretation under the Temporary Agency Work Directive27.



22 In Sweden is the legislation interpreted according to the sources of the statutory acts. If the interpretation of
the statutory act is unclear, the travaux préparatoires are important sources, with the findings of public inquiries
about new legislation drawn up as Government white papers (SOU) or particularly in Bills to Parliament
(proposition). The content of statutory act is clarified by caselaw, and here the Labour Court’s rulings are of
special interest. The doctrine in the legal literature has an impact, especially the arguments about to interpret
the other sources. See Fahbeck R., Sigeman T., n. (1), 286 ff.
23 Employees claims (but not self-employed claims) against their employer for outstanding pay enjoy priority

before ordinary creditors according to the 1970 Preferential Claims Act (Förmånsrättslagen 1970:979) or they
will have their pay from the state instead according to 1992 Pay Guarantee Act (Lönegaranti lagen 1992:497).
It is not up the parties in the employment relation alone to decide if it is an employment where there also are
interests of a third party.
24 Sections 5 (3) and 6 the 2012 Agency Work Act (2012:854).
25 SOU 2011:5 Bemanningsdirektivets genomförande i Sverige; Prop. 2011/12:178 Lag om uthyrning av arbetstagare

[Government Bill].
26 SOU 2011:5 p 55; see also Labour Court ruling 2006 no 24 on contract versus agency work.
27 Directive 2008/104/EC of the European Parliament and the Council of 19 November 2008 on temporary

agency work.

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3.4. Double employer responsibility in triparty constructions.


   Under the 1977 Work Environment Act (Arbetsmiljölagen 1977:1066), a company does
have responsibility for other people in the workplace than its own employees. This does not
mean that the company also becomes the employer of those other people; however, it does
take on some of the employer’s responsibilities. The construction is unique in the Swedish
labour legislation as normally the principle of the legal subject is strict practiced.
   The 1977 Work Environment Act Chapter 3 Section 12 (1) stipulates that the person in
control of the workplace must also ensure that permanent equipment located at the
workplace is safe to use so no one who works there (including those who not are his
employees) is exposed to the risk of illness or accident. This means that anyone who has a
temporary agency worker to perform work for him has an extensive responsibility for the
working environment where the actual work is done. The temporary work agency—the
employer—still has responsibility for ‘all’ measures, including long-term responsibilities such
as rehabilitation and competence development. This is called double or shared
responsibility28.
   Responsibility for collaborative platforms’ working environments is ambiguous in the
legislation. The findings of a government white paper Ett arbetsliv i förändring—Hur påverkas
ansvaret för arbetsmiljön? (SOU 2017:24) were that the special triparty construction makes it
unclear if any responsibility could be demanded from some of the collaborative platforms at
the moment. It will depend on what control the platform has over the worker and his
performance as to whether that worker is accounted a private person, a professional, an
employee, self-employed, etc29.
   There has recently been a judgement in the case of an umbrella company’s responsibility
for the work environment. The Swedish Work Environment Authority imposed financial
penalties on an umbrella company for violating the 1977 Work Environment Act Chapter 3
Section 12. A worker had started work before the contract between the umbrella company
and the client was signed, and thus was not held to be employed by the umbrella company.
The financial penalty on the umbrella company therefore did not apply. The special business
model in which umbrella companies operate was of particular importance for the outcome
of the case. Employment only exists for the time when there is a signed contract—for the
duration of the assignment. Even if an employment contract is signed after the worker has
started work, this will not change: the worker will not be regarded as employed by the
company according to the rules stated in the 1977 Work Environment Act30. This case from
Administrative Court of Appeal indicates the difficulties of applying the current legislation
on new business models.




28 SOU 2017:24 Ett arbetsliv i förändring: Hur påverkas ansvaret för arbetsmiljön?, 55 [Government White Paper].
29 SOU 2017:24, 222.
30 Judgement from Administrative Court of Appeal in Stockholm 30 October 2019 (case no. 5725-18).



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4. Public sector employers.

    The traditional point of view was that the employer at government level was one legal
person. The different public authorities reporting to the government were not independent
employers in an employment perspective. This changed with the 1994 Public Employment
Act (1994:260). The scope of the statutory act is no longer defined as someone ‘employed
by the state’, but instead, according to Section 1, ‘special provisions concerning authorities
reporting to the government’31. The ‘new’ concept of the public employer is called the
functional concept of the employer32. This means that the authorities33 reporting to the government
on is operations have many of an employer’s _authorities, including human resources policy,
decisions about employment, and decisions about redundancy34. When it comes to the
application of most of the statutory regulations in the 1982 Employment Protection Act, it
is not the Swedish state, nor an arm of government, but one part (at a local level) of the
authority reporting to the government that has the employer’s function. A functional concept
of the employer makes the concept of the employer at government level more like the
concept of the employer in the private sector.
    On the other hand is some areas, determination with notice out of reasons relating to the
individual, decided by a special disciplinary board for the government sector. The negotiation
of collective agreements is also centralised. The employers’ representative in collective
agreements at government level is the Swedish Agency for Government Employers, which
is also responsible for handling industrial action. When collective labour legislation such as
the 1976 Co-determination Act (1976:580) and collective agreements are in operation, the
concept of the employer is centralised.
    At the municipal level, the local authorities and committees have the function of
employer, and the same is true at the regional level. The municipal authority are the employer
but employers function are exercised differently depending on what situation it is. In
established praxis from the Labour Court, the various statutory regulations are treated
differently. The statutory rules about the right to transfer are valid in the whole local authority
and not in committees35. A collective agreement can change the scope of the employers’
obligations. When it comes to redundancy, the collective agreement dictates that selection
for redundancy (based on length of service in the statutory regulations) is handled separately
by every committee in a local authority or region.


5. Social security and tax law.

   The main reason for identifying the employer according to the tax- and social security
legislation is that according to the 2000 Social Insurance Contribution Act (2000:980)

31 See Lunning L., Toijer G., (2), 46.
32 Labour Court ruling AD 1999 no 21 where the practice is established; Lunning L., Toijer G., (2), 46.
33 Examples of authorities reporting to the government are The Swedish tax agency, the Swedish National

Courts Administration, Swedish Migration Board etc.
34 In that case, Labour Court ruling AD 2003 no 10 decided that the 1982 Employment Protection Act (1982:

80) was to be enforced so that the employer was the authority at local level.
35 Under Section 7 of the 1982 Employment Protection Act, the employer must try to transfer an employee

before giving notice; Labour Court ruling AD 1984 no 141, AD 1992 no 130.

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employers must pay tax and social fees for their employees. The employer’s responsibility for
paying tax and social fees in some cases goes beyond the concept of employment. The
responsibilities include some independent self-employed without a firm registered with the
business authority, who do not carry out work independently36. The self-employed pay taxes
and social fees themselves. There are no general definitions of the employer in the tax- and
social security legislation, as it mirrors the concept of the employee. When needed there is
the concept of the employer, defined for example by a statutory rule in the Social Security
Act, which stipulates that remuneration under SEK 1,000 (1 Euro is 10,50 SEK) is always
regarded as income from employment and that the person (whether legal or natural) paid the
remuneration is regarded as an employer37.
    The main reason for identifying the employee in social security legislation is to decide in the
binary legal system which statutory regulation about entrance and the calculation of benefits
will apply, as there are different regulations for employees and self-employed. The concept
of employment is not interpreted in the same way in tax law, social security as in labour law.
As a result, a performing party can be regarded as an employee under the 1982 Employment
Protection Act, but as genuinely self-employed under the 1999 Income Tax Act (1999:1229),
and thus qualify for Business Tax Certificate approval38.
    The employment concept in social security legislation is based on how it is defined in tax
law, where the focus is on whether the individual’s income comes from employment or from
business operations39. In the 2010 Social Insurance Code (2020:110) is an employee defined
as someone who has an income from employment and in the 1997 Unemployment Insurance
Act (1997:238) refers to tax law when to decide who is self-employed40.
    The concept of employment in tax law (and social security law) is based on the same “core
criteria” as in labour law.41 There has to be a “contract that a performing party must personally perform
work on behalf of another party”. Other circumstances (or evidentiary facts) are viewed differently
compared to labour law (see in Introduction above) when deciding whether the performing
party is sufficiently independent for Business Tax Certificate approval42. One criterion
mentioned in the travaux préparatoires and in the doctrine legislation is the extent to which an
assignment worker is dependent on the employer and is part of their business43. The fact that
the employer decides how, when, and where the work is to be done, including on the


36 Chapter 2 of the 2000 Social Insurance Contribution Act (2000:980); see also Källström K., Employment and
contract work, in Comparative Labour Law & Policy Journal, 21, 1, 1999, 162.
37 Section 7 Chapter 25.
38 Westregård A., Digital Collaborative platforms: A challenge for social partners in the Nordic model, in Nordic Journal of

Commercial Law, 1, 2018; Källström K., Malmberg J., n. (4) , 31. In Denmark and Norway the practice in tax law
seems to follow the established concept of employment in labour legislation; Hasselbalch O., Arbejdsretten, 11th
ed., Djøf Forlag, Copenhagen, 2013, Section III, Section 1.2.1; Jenum Hotvedt M., Arbeidstaker—Quo vadis? Den
nyere utviklingen av arbeidstakerbegrepet, in Tidsskrift for Rettsvitenskap, 131, 2018, 42–103 at 51, 58 & 64.
39 Sections IV and V of the 1999 Income Tax Act (1999:1229).
40 Chapter 6 Section 2; for calculation of SGI, see Chapter 25 Section 10 of the 2010 Social Insurance Code

and Section 34 in the 1997 Unemployment Insurance Act (1997:238) referes the chapter 13 section 1 in the
Inocme Tax Act (1999:1229).
41 Originally Axel Adlercreutz Arbetstagarbegreppet (Norstedts 1964 p. 186 and 276 ff.) and later Malmberg J.,

Bruun N., n. (3), identified the set of relevant circumstances or criteria, all them fundamental prerequisites
(grundrekvisit).
42 Adlercreutz A. G., n. (3), 1964, 186, 276 ff.; Ds. 2002:56 Hållfast arbetsrätt för ett föränderligt arbetsliv, 111 n. 63;

Westregård A., n. (3).
43 Legislative Bill 2008/09:62 F-skatt åt fler, p. 25 f, and A. Westregård A, n. (38), 2018.



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employer’s premises and with the employer´s tools, does not automatically mean that the
assignment worker is under the direction of the employer according to the preparatory work
in the tax legislation44. Equally, it is also standard for a former employer to be the new
company’s first and only client, yet even so the business must be considered independent45.
In addition, particular attention must be paid to the parties’ intent, while the number of
clients is less important46. In labour law most of those criteria indicate that it is an
employment, so it is obvious why the same person could be regarded as an employee in
relation to the employer but as self-employed in tax law and social security.
    It is crucial for the performing parties to know whether they are regarded as employees
or not: if the performing parties are regarded as self-employed they are entitled to social
security benefits for self-employed which can be less favorably than those for employees47.
In the unemployment insurance e.g. an employee is regarded as unemployed between
assignments and therefore entitled to unemployment benefits. A dependent contractor or a
self-employed is entitled to unemployment benefits as self-employed, which means that they
will not receive any unemployment benefits between assignments unless they formally
register a temporary hiatus in their business activities.
    Caselaw from the Administrative Court of Appeal in which the court decides whether
dependent contractors are regarded as employees or self-employed according to the 1997
Unemployment Insurance Act varies. The essential criteria is the degree of independence48.
The main problem for e.g. platform workers, umbrella company workers and other
dependent contractors is that they so easily fall between regulations for employees and self-
employed depending on how their individual level of independence is judged.


6. Conclusion.

    In the private sector, the decision of who out of the two parties rests on the principle of
legal subject. The employer is defined as the legal subject who has concluded the employment
contract and for whom the employee works. In the private sector there are situations where
it can be difficult to decide who is the employer and whether the employer’s responsibilities
go beyond a contract with the legal subject.

44 Legislative Bill 2008/09:62 p. 25.
45 The problem that the statutory rules for Business Tax Certificate approval can result in more people being
hired as sole traders, even though they are actually employed—the so-called ‘false self-employed’. A Committee
of Inquiry to consider new legislation was especially critical of the fact that the former employer can be the new
company’s only client, and proposed a change in tax regulations to avoid the ‘false self-employed’ (SOU2018:49
F-skattesystemet: Några särskilt utpekade frågor; SOU2019:31 F-skattesystemet: En översyn). Any change in the
legislation will also affect the scope of the social security regulations, as the social security classification is linked
to the tax classification. It is unclear if and when a change will be made, however.
46 Prop. 2008/09:62 F-skatt åt fler, 26–7.
47 Both entrance and calculation of benefits for employees and self-employed is regulated in the 2010 Social

Insurance Code (2010:110) see chapter 6, 25, 27 and 28.
48 Judgement from the Administrative Court of Appeal in Gothenburg 11 May 2010 (case no. 3059-09);

Judgement from the Administrative Court of Appeal in Gothenburg 17 February 2015 (case no. 911-15); see
also the Swedish Unemployment Insurance Board (IAF) appeal to the Supreme Administrative Court in the
Judgement from the Administrative Court of Appeal in Gothenburg 11 May 2010 (case no. 3059-09), review
not granted (case no. 4218-10). See also Uppdragstagare i arbetslöshetsförsäkringen 2016:3, 15–16, about the particular
difficulties relating to the self-employed.

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   In concern groups the principle of the legal subject is strictly applied. In triparty contracts
such as temporary employment agencies the principle of legal subject also applies, and the
temporary work agency is regarded as the employer. In platform work there are still no court
cases in Sweden to look to for precedent, but it is likely that a platform will be regarded as
an employer if the platform takes an active role in determining how the work should be done
and when. If the platform only mediates between the platform worker and the service
consumer, however, it is more doubtful whether there are any employers at all, or if the
service consumer might be the employer. In umbrella companies the intention of the parties is
that it is a short fixed-term employment for the duration of the assignment. Again, there
have not yet been any cases in the Labour Court, but it is likely (or at least not unlikely) that
the court will find an umbrella company to be the employer in the relation between the
umbrella company and the umbrella company worker. In dubious cases the concept of
employment shall be interpreted as if there is an employment at hand, as in accordance with
the travaux préparatoires. The concept of employment may be interpreted differently in relation
to a third party and in other areas of regulation such as social security.
   In some particular situations there is a shared responsibility, such as in the 1977 Work
Environment Act where the end user also undertakes the responsibility for everyone who
work at the workplace.
   The employer in the public sector is as a concept more like the employer in the private
sector, according to the functional concept of the employer. The functional concept decentralizes
the employment concept to the authorities reporting to the government at local level. The
employer’s responsibilities are therefore carried out on the local level. In other respects, the
concept is nevertheless a centralized one.
   In summary, it is not always easy to determine who is the employer. It is easier in cases
where the intention of both parties according to the employment contract is an employment
relation (e.g. umbrella companies). The question might then be one of finding ‘false
employees’, in which case there is no employer. If the principal, who is often the stronger
party, denies that the relation is one of employment (e.g. collaborative platforms), it instead
becomes a question of finding ‘false self-employed’ and their employer.




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                                                                                         Section: Theme


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Copyright © 2020 Annamaria Westregård. This article is released under a Creative Commons
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