As the summer holidays are approaching, questions arise regarding how the legislation on annual leave relates to the rules on short-time work and the employer’s vacation planning.

As a general rule, the employer shall schedule the annual leave of each employee to a period of at least four weeks during the period June to August. This also applies during a period of short-time work. The leave period may be scheduled to another time if there are special reasons. An agreement between the employer and the employee on the scheduling of paid leave is, as a general rule, binding, but may be amended if the parties agree. Where no agreement can be reached with respect to the scheduling of the annual leave, the employer has the right to determine how those dates are to be scheduled. In such case, the employer shall notify the employee of the decision no later than two months prior to the commencement of the leave. Notification may be given at a later time if there are special reasons but, if possible, at least one month prior to the commencement of the leave.

The employee’s right to paid annual leave is not affected by the introduction of short-time work. Vacation pay is calculated according to the applicable collective agreement, or if there is no such agreement, according to the Annual Leave Act.

According to the Swedish Agency for Economic and Regional Growth’s current communication, vacation shall be counted as absence when calculating the financial support for short-time work. This means that the employer is not eligible for such support for the time during which an employee is on vacation. When the financial support for short-time work is reconciled, the employer must report all absence and if the financial support paid preliminarily does not correspond to actual worked time during the support period, the excess amount will be subject to repayment or deducted from the coming support period.

If the employer experiences a change in circumstances during a period of short-time work that results in an increased need for manpower e.g. during the summer months, the employer shall, to the extent feasible, utilise the employees allocated to the short-time work. As long as the actual worked time corresponds to the level of reduction of working hours agreed between the employer and the employee during the entire contract period, the employer is free to plan the reduction of working hours during the contract period. It is also possible to change the scope of the short-time work. Bringing in extra staff when demand increases, instead of allowing the regular employees participating in the short-time work programme to return to work, may affect the assessment of whether the company is eligible for financial support and result in that the employer will be liable for repayment.