Swedish labour market regulation generally relies heavily on collective bargaining between trade unions and Employers' organizations.
[1] Even though several parts of the Employment Protection act can be overridden by collective agreements, it still constitutes an extensive direct state regulation.
In case of termination due to redundancy, the law requires workplaces to fire their staff according to a list of seniority (Swedish: turordningslista).
[2] The act adopted in 1974 marked a breaking point of a largely hands-off attitude by the state in place since the established with the Saltsjöbaden Agreement in 1938.
Liberal critics, on the other hand, claim that decreased flexibility increases thresholds to hiring and blocks employers from firing incompetent labour.