Industrial relations

Sweden: Latest developments in working life Q3 2019

The process of reforming the Employment Protection Act and the Work Environment Authority’s investigations into threats and violence in the workplace are the main topics of interest in this article. This country update reports on the latest developments in working life in Sweden in the third quarter of 2019.

Reform of Employment Protection Act

When the new government was formed in January 2019, a new level of cooperation was agreed between the Swedish Social Democratic Party and the Green Party on the one hand, and the Centre Party and the Liberals on the other. [1] This new collaboration resulted in a 73-point policy programme involving all major policy areas. In the labour market policy area, the four parties agreed to reform the current employment protection regulations, as well as the unemployment insurance system in line with a ‘flexicurity’ model. The main debate has focused on the rules relating to the termination of employment, which are regulated in the Employment Protection Act.

According to the Employment Protection Act, an employer who wants to dismiss an employee must be able to show objectively justifiable reasons for the termination, either due to redundancy or personal reasons. If such reasons cannot be given, the termination could be annulled, and the employer might have to pay damages. In the case of termination due to redundancy, employees up for dismissal are listed in order of priority in line with the last-in-first-out principle (where workers with the shortest tenure must leave first). In an agreement made between the four parties earlier this year, it was stated that more employers should be able to make exceptions to the order of priority rules.

Views of trade unions

Several trade unions have expressed concerns about this development, arguing that the current regulations work well and that there is no need for reform. The Swedish Council for Negotiation and Cooperation (PTK) is a joint organisation consisting of 27 member unions that represent 880,000 salaried employees in the private sector in Sweden. In a recent study, PTK interviewed 200 employers and just over 200 trade union representatives working in organisations that have experienced downsizing within the past few years. [2] Three out of four respondents stated that the employer and the union had agreed about the need for downsizing. Nine out of ten stated that the employer and the union had agreed on which employees were to be made redundant, in half of the cases through a priority list. Out of the ones who reached an agreement, three out of four stated that it had been an easy process.

Views of employers

Employers, on the other hand, have welcomed the changes. In response to the PTK report, the Confederation of Swedish Enterprise’s labour market expert, Patrik Karlsson, explained that being pleased with negotiation results and having a system that is suited for today’s labour market are not the same thing. He further stated that companies find that the current rules on employment and dismissal inhibit growth. [3]

The challenges experienced by employers are further described in a new report by the Swedish Federation of Business Owners, Sweden’s largest business organisation. According to the federation’s members, the rules on termination due to personal reasons are the most complex, as they often involve a high level of uncertainty regarding time and costs, and require significant evidence. Termination due to redundancy can also create problems and becomes increasingly complicated as the number of employees grows. Many companies fear not being able to retain the right competencies in case of redundancies. This is also problematic because the right to return after dismissal is connected to the priority list and the surveyed companies stated that this was the main reason why they did not recruit.

An inquiry into how the Employment Protection Act should be reformed has been commissioned by the government, with a legislative proposal expected in the first half of 2020. Commissioning an inquiry is a way for the government to put pressure on the social partners to reach a bipartite agreement (generally seen as the more favourable option). Bipartite negotiations are currently ongoing.

Threats and violence in the workplace on the rise

The share of workers who have been victims of threats and violence in the workplace has increased over the years, reaching 6.2% among women and 3.7% among men in 2016–2017. The Swedish Work Environment Authority is currently carrying out inspections that focus on the organisational and social work environment, and is looking specifically into the occurrence of threats and violence in the workplace. According to Pernilla Niia, regional manager for western Sweden at the Work Environment Authority, the reason for this special focus is that more employers need to work actively to prevent threats and violence in the workplace. [4]

Some sectors are more vulnerable than others, such as care and social work. As of June 2019, 42 work stoppages had been ordered by work safety officers and reported to the Work Environment Authority. Around half of these work stoppages concerned the risk of threats and/or violence. [5]

Outlook

The next intense collective bargaining round will take place soon. As most collective agreements are signed for three-year periods, every third year usually sees a larger-scale bargaining round. Out of 670 agreements, 500 are set to expire in the spring of 2020 (covering around 2.8 million workers) and need to be renegotiated. [6] This means that the last months of 2019 and early 2020 will see the social partners positioning themselves in preparation for the upcoming negotiations.


Footnotes

  1. ^ Eurofound (2019), Sweden: Latest developments in working life Q1 2019 .
  2. ^ Arbetet (2019), Fack och företag oftast eniga: 'Signal till politikerna' , 24 September.
  3. ^ Arbetet (2019), as above.
  4. ^ Arbetet (2019), Arbetsmiljöverket: 'Arbetsgivaren behöver inte stå handfalllen' , 21 August.
  5. ^ Arbetet (2019), Omsorgen utsatt för hot och våld , 21 August.
  6. ^ Swedish National Mediation Office (2019) Avtalsförhandlingarna 2019–2020 , 28 August.

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