1998

Government of Sweden: “The Right to Leave to Conduct a Business Operation Act”


Stakeholders type
Affected categories of people
New Generations (e.g. Z)
Silver Age
Youth
Location
Sweden
Short case
description
The Right to Leave to Conduct a Business Operation Act of the Government of Sweden guarantees that employees have the right to take a leave of absence of up to 6 months to start their own company, safe in the knowledge that they can return to their job — or a similar one — once the period is up.
Situation
background
The Government of Sweden reconsidered labor market regulation and the rights of employees. As one of the rights, the right to conduct one’s own business was accepted. The act is designed to support entrepreneurship and venture business in Sweden.
Problem
Statement
The need to encourage entrepreneurship as a driving force of the economy.
Steps
to solving
the problem
The Right to Leave to Conduct a Business Operation Act outlines the rules of engagement for future entrepreneurs:
- Employees have the right to take a leave of absence of up to 6 months to start their own company ("Tjänstledighet")
- Employees are guaranteed by law that they can return to their pervious job/employer (or a similar one), once the period is up
- Tjänstledighet is unpaid and may only be redeemed by employees once per employer
- An individual planning to apply for the leave should have been employed for the past 6 months or a total of at least 12 months in the past 2 years
- Employers are only entitled to reject the request if there are significant operational reasons or if the new business is considered a direct competitor
Impact
- Rising demand for all kinds of leaves of absence (including paid parental leave) coincides with growing numbers of Swedes starting their own companies.
- In 2017, 175,000 25- to 54-year-olds on leave were registered, compared to 163,000 in 2007, according to Statistics Sweden. - The registration office for Swedish companies, Bolagsverket, says 48,542 limited companies registered in 2017, up from 27,994 in 2007.
Additional
information
Stockholm has become the European startup capital, second only to Silicon Valley worldwide for the number of unicorns1 that it produces per capita, according to the Wharton School of Business. Spotify, Skype, Mojang, Avito, and Klarna started here.
There's a growing trend in many countries for people to develop a business venture outside of regular working hours, then devote their free time to nurturing it. A side hustle, as it's often called. It's an outlook that tallies with that of the gig economy — spare time, spare capacity, spare resources are all just waiting to be monetized. That might include delivering takeaway food, signing up to be a taxi driver or a courier for a few hours a day, or making your own arts and crafts items to sell via the web.