Information on TechSweden's special provisions on the Rental Act
- The contract terms are a risk allocation in the business contract and are not a way to contract away or try to circumvent the Rental Act
As many member companies have experienced that their customers are concerned about the situations in which the Leasing Act applies, especially in the case of longer consultancy assignments, TechSverige, in consultation with some member companies and larger customer companies, has developed special provisions as a supplement to the standard agreements for Services and IT services.
The special provisions have been prepared together with TechSverige's external legal advisors, lawyers Erik Bergenstråhle and Lisa Ericsson at Cirio Advokatbyrå, who share TechSverige's view that the contractual terms involve a distribution of risk in the business agreement and are not a way of contracting away or trying to circumvent the Rental Act.
When can the special provisions be used?
Point 1.1 indicates when the special provisions can be used. It states that they can be used for missions there:
- the supplier shall perform a service (or IT service) as further defined in the business contract, to the customer;
- the supplier is a consulting company that puts its collective skills and experience at the disposal of the customer through the supplier's employees who perform the service;
- the employees are not employed for the purpose of being hired out to client companies to work under the client's control and direction; and
- the management of the work, within the meaning of the Rental Act, remains with the Supplier during the performance of the assignment, although the Client may give certain day-to-day instructions to the Consultant(s) as to how the Client wishes the service to be performed to suit the Client's business.
Of course, the above conditions must also be fulfilled in reality and reflect what the parties have agreed on how the service will be provided.
Risk sharing between supplier and customer
- The specific provisions do not regulate whether or not the Agency Work Act applies, but clarify who should take the risk if an individual (who has performed consultancy work for the client over a longer period of time) claims employment or remuneration under the Agency Work Act despite the fact that the parties are of the opinion that the Act does not apply. This is expressed as the supplier guaranteeing that the law does not apply and assuming the financial risk if a court would later decide otherwise.
- The fact that this is expressed as a guarantee on the part of the supplier is intended to make it clear that the supplier is so confident in its assessment that it is prepared to take the financial risk if the assessment proves to be incorrect in a subsequent judicial review.
- The guarantee does not affect whether or not the Rental Act actually applies, nor does it remove any rights an individual may have under the Rental Act (if the Act does apply). The result is that the supplier (with the support of TechSverige) assumes the responsibility and cost of resolving the dispute and the customer is protected against the financial risks that the dispute may entail.
The client's responsibility
The provisions also include an undertaking by the client not to make an offer of employment or pay remuneration under the Agency Work Act to the consultant(s) performing the service. This undertaking has been introduced on the basis that the provisions are intended to be used in business situations where the parties agree that the assignment is not covered by the Agency Work Act and where the supplier has assumed responsibility for managing the dispute and bearing the costs. In exchange for this commitment on the part of the supplier, it is reasonable that the customer does not immediately comply with the claim but awaits the parties' consultation on how to handle the claim.
- If, during the consultation, it is considered that the law is nevertheless applicable, the claim can be accepted.
- If the customer breaches the consultation requirement, the supplier's obligation to pursue the process and bear the costs will normally be waived. However, no liability for damages will arise for the customer.
The supplier's right in case of dispute
If the claim is disputed, it is reasonable that the supplier, who has assumed the financial risk, has the right to represent the customer in the matter and decide how to handle the case. The customer always has the right to participate in the process.
If the customer does not want to give the decision-making power on how to handle a dispute to the supplier, the parties can agree on derogations from the specific rules, e.g. that the customer has the right to decide whether or not to initiate a process, or that the parties agree to try to reach an agreement with the individual in the first place.
Support and advice
TechSverige offers advice and support to its member companies on issues related to these special provisions.
Karolina Löf, General Counsel, TechSverige, karolina.lof@techsverige.se
Tobias Odervång, Membership Manager, TechSverige, tobias.odervang@techsverige.se