Hamilton Perspectives Nyhetsbrev

Swedish contractual employment law – The obligation for employees to repay expenses for education paid by the employer

Contract law and employment law are two le­gal ju­ris­dic­tions with a clo­se con­nec­tion. A wi­de range of contracts are fre­quent­ly uti­li­zed wit­hin employment law; e.g., employment agre­e­ments, ex­it agre­e­ments and agre­e­ments re­la­ting to non-com­pe­te clau­ses and ot­her restricti­ve co­ve­nants.  General prin­ciples of contract law are com­mon­ly employed to in­ter­pret the­se agre­e­ments. However, the­re are se­ve­ral are­as whe­re the Swedish contractu­al employment law de­vi­a­tes from the “or­di­na­ry” contract law.

A com­mon oc­cur­rence in Sweden is that an employee, du­ring the employment, un­der­go­es an educa­tion paid for by the employer. In re­turn, it is usu­al­ly agreed between the par­ti­es that the employee shall re­pay the employer for the costs, if the employee ter­mi­na­tes the employment be­fo­re cer­tain ti­me has lap­sed from the com­ple­tion of the educa­tion.

In a re­cent ca­se, AD 2018 no. 77, the Swedish Labour Court (Sw. Arbetsdomstolen) has ela­bo­ra­ted its vi­ew on such agre­e­ments. In its jud­ge­ment, the Swedish Labour Court al­so con­firms its pre­vious sta­te­ments re­gar­ding how and when an agre­e­ment shall be de­e­med to ha­ve be­en con­clu­ded wit­hin the fi­eld of employment law.

AD 2018 no. 77

In the pre­sent ca­se, a he­li­cop­ter te­ch­ni­ci­an had un­der­go­ne an educa­tion paid by the employer. A few mont­hs la­ter the te­ch­ni­ci­an ter­mi­na­ted his employment. The ques­tion in the ca­se was whet­her the par­ti­es had oral­ly agreed that the te­ch­ni­ci­an he­re­by should re­pay parts of the costs for the educa­tion.

According to the Swedish Labour Court, such agre­e­ments are al­lo­wed un­der cer­tain con­di­tions and can be com­bi­ned with cer­tain ob­li­ga­tions for the employee to re­pay the costs.

Such an ob­li­ga­tion con­sti­tu­tes a con­di­tion of es­sen­ti­al im­por­tan­ce for the terms of employment in ac­cor­dan­ce with Article 6 c of the Swedish Employment Protection Act. Such agre­e­ments should the­re­fo­re, as a ge­ne­ral ru­le, be con­clu­ded in wri­ting.

The Court furt­her sta­ted that an agre­e­ment has be­en con­clu­ded on­ly when the par­ti­es ha­ve agreed upon all con­di­tions that eit­her of the par­ti­es wished to re­gu­la­te by the agre­e­ment.

The Court found that the par­ti­es had not agreed upon how the re­pay­ment would be ma­de or which spe­ci­fic costs the employee would be ob­li­ga­ted to re­pay. Therefore, an agre­e­ment re­gar­ding an ob­li­ga­tion of re­pay­ment had not be­en con­clu­ded.

In con­clu­sion

It is im­por­tant for employers to re­gu­la­te the employee’s ob­li­ga­tion to re­pay educa­tio­nal ex­pen­ses by a writ­ten agre­e­ment. The agre­e­ment should be con­clu­ded be­fo­re the employee un­der­go­es the educa­tion and the terms and con­di­tions for the re­pay­ment ob­li­ga­tion should be clear­ly and pre­ci­se­ly re­gu­la­ted. The key is­sues to be re­gu­la­ted are e.g. how long the employee shall re­main in the employment, which costs that shall be co­ve­red by the re­pay­ment ob­li­ga­tion and how much of the costs that shall be re­paid if the employee le­a­ves the employment ear­li­er than agreed.