Sweden: Temporary agency work and collective bargaining in the EU

  • Observatory: EurWORK
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  • Published on: 18 Dezember 2008



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Temporary Agency Work has witnessed an extensive growth in Sweden in the past years. However, it is still not considered to be a sector in its literate sense. Since TAW covers so many fields of activity it is rather characterized as a group of companies providing services to other sectors. There are two collective agreements regulating TAW; one representing blue-collar workers and one representing white-collars and academics. The two agreements differ when it comes to TA workers respectively permanent workers. While the blue-collar agreement’s principle is that both groups should have the same wage, the white-collar/academic’s agreement focus on individual wages.

Section 1. Definitions

1) In your country, is there a statutory definition of:

a) temporary agency work? Yes.

The Act on Private Job Placement and Hiring-out of Labour (Lag om privat arbetsförmedling och uthyrning av arbetskraft, 1993:440) defines TAW as a legal relationship between a client and an employer that involves the employer providing, for compensation, employees to perform work for the client’s business. The statutory definition illuminates the threefold relationship that is significant for TAW; the employer, the employee and the client.

b) agency worker? Yes.

Agency workers are defined as employees in the Temporary Work (TW) agency, hired-out to a client.

c) user enterprise? Yes.

The user enterprise is defined as the client enterprise.

2) Is there a collectively agreed definition of:

a) temporary agency work? Yes.

According to e. g. the national collective agreement for blue-collar workers, a TW agency is an enterprise that leases out employees.

b) agency worker? Yes.

The national collective agreement for white-collar workers and academics differs between three types of agency workers; stationary clerks (employees working in the TW agency’s own administration); clerks on contract by tender (employees having his/her permanent work place at the client company); and ambulatory clerks (employees leased out to do different jobs at different client companies).

c) user enterprise? Yes.

Both of the national collective agreements define the user enterprise as “the client company” hiring workers from the TW agencies.

3) In your country, would you describe TAW as a sector in its own right?

TAW, in Sweden, is traditionally seen as a service provider to other sectors and not primarily as a sector in itself. This, however, seems to be changing. The rapid growth of the TW agencies in the past years has led to an increased interest in TAW. There are still no trade unions solely representing TA workers, but the existing unions have increased their work in the area, also pointing out the extensive demand for guidance and amount of disputes at local level surrounding the TW agencies. Since the activity of TAW is quite new, only being legal in Sweden since 1992, the knowledge in how to administer the agreements are still relatively low, and information campaigns are constantly launched by both the employer association and the relevant trade unions.

Section 2. Regulatory framework

1) Have there been any changes in the law concerning TAW since 2004?

Yes. According to a decision made in November 2007, it is no longer voluntary for the member agencies of the employer association, the Swedish Staffing Agencies (Bemanningsföretagen) to be authorised. The current transitional provisions state that all existing members that have been active for more than a year must be authorised before February 2009. New members apply for authorisation at the same time as they apply for membership. The authorisation has before (from the start in 2004) been a voluntary possibility for companies in the employer association. The change is made to give the companies and the sector a greater recognition and a higher status. It is also supposed to give clients and workers a greater feeling of security.

2) How is TAW regulated in your country?

TAW is mainly regulated through the Act on Private Job Placement and Hiring-out of Labour.

There are also national collective agreements, sector collective agreements and local collective agreements in some companies. There are two national agreements; one for blue-collar workers and one for white-collar workers and academics.

Apart from that, there is a market regulation in form of an authorization of temporary work agencies, conducted by the employer association Swedish Association of Temporary Work Agencies.

3) What is regulated in these provisions? In particular,

a) use of agency work. (e.g. length of assignment, sectoral bans, permitted reasons of use, number of agency workers per company, other) No such regulations exist.

b) the form of the contract: Yes.

According to both the relevant national collective agreements, employments are permanent if nothing else is agreed on. However, there is a possibility for temporary agreements between the employer and the employee. The collective agreement between the blue-collar Swedish Trade Union Confederation (Landsorganisationen, LO) and the Swedish Staffing Agencies states that such an agreement can not exceed six months. However, it can be expanded to 12 months if approved of by the local employee association.

c) social security and social benefits: Yes.

The Act on Private Job Placement and Hiring-out of Labour states that no employee must be hindered from taking employment at a client company for whom the employee is doing a job. It also states that an employee who has resigned from an employment and become employed by a TW agency may not be leased to the former employer earlier than six months after the end of that former employment. Finally, the Act says that no one running a TW agency is allowed to request compensation from work applicants or employees in order to recruit them to a job.

d) conditions to open a TAW agency: No.

There are no necessary licences needed to be able to open a TW agency. However, if the newly started agency wants to become a member of the employer association the Swedish Staffing Agencies (which is, of course, voluntary), it has to live up to certain criteria to get the compulsory authorisation. To get the authorisation the agency must e. g. be bound to a collective agreement, at least one of the employees with managerial position must have participated in the Swedish Association of Temporary Work Agencies’ authorisation education and it has to have an established plan for equal opportunities etc.

e) business activities/services delivered by TW agencies (e.g. prohibition to provide other services than TAW)? No such regulations exist.

f) third-national companies or temporary agency workers? Yes.

In an appendix to the blue-collar collective agreement, special conditions for foreign TW agencies in Sweden are stipulated. The regular collective agreement is to be used in its entirety. However, with some supplementary notes (in the agreement for white-collar workers and academics no exceptions from the national are made), that include e. g:

1. Vacation is regulated in accordance with the Act on Posting of Workers (Lagen om utstationering av arbetstagare, 1999:678).

2. The employer is liable to sign and maintain relevant insurances on behalf of the employees.

3. The foreign company must name a Swedish contact that can represent the company in issues concerning the collective agreement and terms of employment.

4. The employer must inform the employees on the terms considering working in Sweden.

5. The Swedish representative has the right of entry to the client company where the foreign TA workers are.

4) Do any regulations (by law and/or collective bargaining in the TAW sector) specify equal treatment for agency workers with permanent workers in the user enterprise concerning:

a) pay: Yes

The blue-collar collective agreement’s general principle is that the TAW employees should have the same salary as the employees at the client company. The white-collar agreement stipulates no such principle. The employees here have an individually set wage.

b) information, consultation and representation: Yes

The TA worker at the client company shall be considered equal to permanent employees when it comes to prohibitions against reprisals and the duty to evaluate and act against harassments. TA workers shall also have the possibility to demand adjustments or reversals of internal regulations that are discriminating at the client company. (The Swedish Government’s report 2005/06:91)

c) training: No such specifications exist.d) other terms or conditions of employment? No. The full extent of the regulations concerning equal treatment is described in b.

5) Is there a control/enforcement mechanism regarding any TAW regulation?

a) is there a special labour inspectorate or a bi-partite body governing TAW? No.b) are there any sanctions/penalties for not respecting the regulations (whether stemming from law and/or collective agreements)? Yes.

If the Act on Private Job Placement and Hiring-out of Labour is not respected, either intentionally or by inaccurateness, the employer is ordered to pay a fine, which is regulated in the Swedish Labour Court (Arbetsdomstolen, AD). The amount of the fine is set individually in relation to which paragraph has been trespassed and to what extent.

If the collective agreements are not respected, a negotiation between the local partners (the employer and the local trade union) will come to pass. After that, if one of the partners wants to proceed, a central negotiation takes place. If the partners still can not agree the dispute will proceed to the National Mediation Office (Medlingsinstitutet, MI) and after that to the Labour Arbitration Court. The part judged wrong is to compensate for the damage caused in form of a fine. As was the case above, the amount of the fine is set individually.

Also, if any of the above mentioned regulations are not respected, the company will lose its authorisation at the Swedish Association of Temporary Work Agencies.

Section 3. Social dialogue and collective bargaining

1) Is there any employers’ association(s) for TAW firms in your country?

Yes. The employer association of TAW firms in Sweden is called the Swedish Staffing Agencies, and is an affiliate to the Almega Group within the Confederation of Swedish Enterprise (Svenskt Näringsliv). The Swedish Staffing Agencies comprises about 450 member enterprises.

2) Is there any union(s) specifically for agency workers?

No. However, the large union associations, the Swedish Trade Union Confederation and ‘the Union’, (Unionen), (SE0803029Q), have special divisions concentrated on representing TA workers. The Swedish Trade Union Confederation represents blue-collar workers and the Union represents white-collar workers. The Confederations of Academics are, in this case, represented by the Swedish Association of Graduate Engineers (Sveriges Ingenjörer), and they are included in the collective agreement between the Union and the Swedish Staffing Agencies (described below).

3) Collective bargaining levels

Is the TAW sector governed by collective bargaining at

a) intersectoral/ national level? Yes.

There are two national collective agreements regulating TAW. Both are, on the employer side, negotiated by the employer association Swedish Association of Temporary Work Agencies. On the employee side, one of the agreements is negotiated by the Swedish Trade Union Confederation who represents blue-collar workers. The white-collar and academic agreement’s employee representative is “the Union”.

b) sectoral level? Yes.

All sectoral collective agreements are conducted within the boundaries of the national collective agreement. Agreements like these are uncommon, but prevails e. g. in TW agencies hiring out air staff, since their working conditions are very different than in other sectors.

c) company level? Yes.

There can be local agreements. Mostly the variations from the national agreements involve regulations concerning leave of absence or vacation.

Additional remarks, relevant here, could be that, in Sweden, there are about ten multinational TW agencies. When it comes to creating European Works Councils (EWC), the interest among these companies has only been half-hearted until about two or three years ago. Today the interest is somewhat higher. However, the trade unions, involved in the process, consider the creation activities difficult to reach since it is hard to find good union organisation in the rest of Europe. The varying values of trade unions across Europe are troublesome because of the Swedish unions’ rejection of accepting non-organised representatives from the other relevant countries.

4) Collective bargaining outcomes

It is the national collective agreements that have the greatest importance for the sector. Potential agreements at sectoral or company level are within the boundaries of the national one, that in itself is a minimum agreement.

The collective agreement for white-collar workers and the academics in TW agencies, valid between May 1, 2007 and April 30, 2010, declares that the employees are guaranteed a monthly pay based on 133 hours. After 18 months employment the pay is based on 150 hours. Apart from that there is an incentive pay covering the time exceeding those hours. The agreement also covers compensation for overtime, displaced working time, on-call duties, travelling time compensation, holiday, sick pay, reassignment and negotiating procedures.

The collective agreement for blue-collar workers in TW agencies, valid between 2007 and 2010, is built on the fundamental principle that the TA worker should have the same wage as the permanent workers at the client company. The TA workers are also entitled to a guarantee wage for the times he/she is not leased to a client, based on 90% of his/her average income during the last three months. During time when the employee is not leased out to a company but still works (e. g. undertakes internal education), a “personal wage” is paid, that may not fall short of the minimum wage stated in the agreement. The agreement also covers staff management, working time, travelling time compensation, leave of absence, sick pay, holiday, working environment responsibility, vocational and educational training, as well as negotiation and collective action procedures.

4) Are there any examples of sector- or company-level collective agreements in other sectors that restrict, permit or otherwise regulate the use of TAW within their domain?

Yes. According to § 38 in the Act on Codetermination in the Working Life (Lagen om medbestämmande i arbetslivet, MBL, 1976:580) the employer in a potential client company is liable to negotiate with the employer association before hiring TA workers. The employer association has the right to veto, according to § 39, if the hiring-in of personnel might lead to law or collective agreement being disregarded. Some company specific collective agreements have specialised this veto-right, making it more detailed. There are also collective agreements at company level that state that a company may not take in TA workers covering more than 20% or less of the total employment force.

5) Please provide any data concerning

a) trade union density for agency workers

Totally 7,347 persons are organised in the Union. That is 17% of all white collar workers in TAW. In the Swedish Trade Union Confederation the union density is 50-60%. It is a problem (foremost) for the blue-collar unions that many of the TA workers stay for such short times at their client companies and thereby feel that they don’t need to organise.

b) the coverage of collective bargaining within the sector.

Close to 90% of the companies employing white-collar workers, and thereby belonging to “the Union”, are comprised by the collective agreement between the Union and the Swedish Association of Temporary Work Agencies. When it comes to the Swedish Trade Union Confederation, about 250 TAW firms are connected to the national collective agreement. There is about 500-800 TW agencies totally, making the coverage on the employer side approximately 30-50%.

Section 4. Employment and working conditions of TA workers

1) Please provide the most recent data (averages) on TAW employment

No such figures are available. Only available if data is sent by the Swedish Staffing Agencies, which have not been received so far.

2) Please provide any evidence from official, academic and social partner sources concerning:

a) the reasons for user companies’ usage of TAW, including any differences by sector, occupation, firm size etc.

According to a report from the Association of Swedish Engineering Industries (Teknikföretagen), the reasons client companies give for hiring personnel from TW agencies are:

1. Opportunity to adjust the amount of employees to variations in work load

2. Flexibility when it comes to increase and decrease the amount of personnel and at the same time keeps the core competences.

3. Accessibility to personnel at different kinds of absences or during on-going recruitment processes

4. To find competent personnel to recruit later on

5. Since personnel with the right competences are hard to find

6. For time-limited projects or where there will be outsourcing

The report states that the use of TW agencies, especially in engineering companies, have increased rapidly in the past 10 years. This is foremost due to a more open and internationalised market, demanding flexibility and specialised competences.

b) reasons for workers participation in the sector and levels of satisfaction, including any differences by age, sex, education etc.

The Institute for Labour Market Policy Evaluation (IFAU) states in a report from 2004 that the TA workers are overrepresented by youths, women and migrants. Youths are a group with certain preferences for work in the TW agencies due to its flexible employments. Youths who study can combine their studies with work in the TW agencies, and those who have recently finished their studies can easier get into the labour market and gain valuable contacts for their future careers. The fact that women are overrepresented in the sector could be that much of the work performed by TW agencies involves occupations traditionally bound to female labour, e. g. administrative personnel, telephonists, receptionists etc. During the past few years, however, the TW agencies hiring out of engineers and warehouse personnel have increased, which could boost the representation of men in the TWA sector. Migrant workers could use TW agencies as a way to get in to an otherwise seemingly closed market. While prejudices keep “regular” employers from hiring people with different backgrounds than their own, TW agencies are, according to the IFAU report, more focused on the actual skills of the applicant and not as controlled by subconscious prejudices. When the migrant worker, in the next stage, is recruited to a client company, his/her skills are already guaranteed by the TW agency and he/she is welcomed into the labour market.

There are no more recent reports available, but the tendencies stipulated in the 2004 report seem to be applicable today as well, according to the social partner interviews conducted on behalf of this report.

3) Do TAW workers have the right to information, consultation and representation?

The Act on Union Elected Representative’s Position at the Work Place (Lagen om förtroendemans ställning på arbetsplatsen, 1974:358) declares that a union elected representative has the right to represent the employees at a work place, in questions concerning the relationship to the employer. It also states that the representative has the right to perform his/her duties at another work place than the own. The representative of a TW agency has, hence, the right to perform representation even at the client company. The representative of the permanent workers at the client company doesn’t, however, have the right to inform or in other ways do work for a TA worker even if that worker is affected. This might cause problems since the TAW representative rarely knows all that is happening at the client company and that effect the TA worker.

4) Which rules and procedures can apply to temporary-agency workers in contrast to other workers in the user company?

The blue-collar national collective agreement states, as its fundamental principal, that there should be no differences or differential treatment between the TA workers at a client company and the permanent workers. The only differences allowed are regulations concerning the clear employment situation, such as parental leave or vacation terms. The white-collar and academic agreement does not have such a principle, but is more focused on the individual payments of the employees.

5) Are there any procedures governing use of TAW and strike breaking?

In particular, can workers on strike be replaced by agency workers? No.

According to the collective agreement, blue-collar workers may not perform work at a client company that is the object of union offensive actions. The white-collar and academic agreement has no such regulations. However, according to representatives from the Union, they have a mutual understanding with the firms that they should not lease labour to companies involved in a strike.

Section 5. The extent and composition of TAW.

1) For 2004 and 2007, please state

a) the number of agency workers:

In 2004 there were about 35,000 employees in the TAW business in Sweden. In 2007/2008 that figure has risen to about 45,000 whole year employees. If also counting the many employees employed on hours, such as e. g. students, the figure is more likely to reach 63,000 (it is, however, the former figure that is generally used for statistical comparison).

b) total revenues of the TAW sector:

No such figures are available. Only available if data is sent by the Swedish Staffing Agencies, which have not been received so far.

2) Are there any sectors or occupations in which TAW has grown since 2004?

The available figures here are from 2006 respectively 2008. Hence, the growth of certain occupations between these years will be noted here. Foremost it is the warehouse/industry and the economics/financing occupations that have grown with 3 percentage points in both cases. These two groups are also the largest occupational groups in TAW on 17 respectively 36% in 2008. A slight growth is also witnessed between 2006 and 2008 concerning the occupational groups telephonists/call centre and technicians.

3) Has there been any changes to the TAW sector in terms of

a) concentration? Yes.

The turnover of the TW agencies of the Swedish Staffing Agencies has had a positive development since 2004. The average growth has gone from 11% in the last quarter of 2004 to 23% in the first quarter of 2008. The proportion of employees in the sector has grown from about 35,000 in 2004 to 45,000 today. That is an increase of 10,000 employees in the last four years, illuminating the significant growth of TAW.

b) internationalisation, i.e. number/significance of multinational TAW firms? No.

There are about 10 TAW firms in Sweden working on the international market. This figure has not changed significantly during the past few years.

4) What is your evaluation of the availability and quality of statistical data concerning TAW in your country?

It is quite hard to find data on TAW; partly because it is still quite a new “sector” and not even, yet, treated as a sector in its literate sense, and partly because it covers so many thematic fields. The Swedish Staffing Agencies is the only source, apart from Statistics Sweden (whose information is highly characterised by the factors stated above), who have any form of statistical database concerning TAW.

Commentary by the NC

Temporary Agency Work in Sweden is a rapidly growing phenomenon, resulting in increased social dialog and debate. The social partners have adjusted their activities in relation to an increase of TAW and the labour market has also changed. In accordance with the increased awareness about it, TAW could be more and more perceived like a traditional sector. However, although TAW is growing, this phenomenon is more properly to be considered as a subdivision to other sectors, rather than a sector itself, especially when it comes to official statistics. TAW covers so many sectors and fields of activity and the traditional statistics are built on the division of those sectors (NACE codes etc.). Hence, it will probably take a while, if ever, before the official statistics recognise TAW as a sector in itself, no matter of a more general perception.

Thomas Brunk, Oxford Research

References

Collective agreement between the Swedish Staffing Agencies (Bemanningsföretagen) and the Swedish Trade Union Confederation (Landsorganisationen, LO), 2007-2010.

Collective agreement between the Swedish Staffing Agencies (Bemanningsföretagen) and the former Salaried Employees Union (former Handelstjänstemannaförbundet, HTF, now Unionen), 2007-2010.

Report from the Swedish Government, the Ministry of Industry, Employment and Communication, 2005/06:91, Employment Terms in Temporary Work Agencies (in Swedish)

Statistical report from the Swedish Staffing Agencies (Bemanningsföretagen), The development of TAW firms, first quarter 2008.

Report from IVL, the Swedish Working Environment Institute, Working environment for ambulating personnel in TAW firms, 2002.

Report from the Association of Swedish Engineering Industries (Teknikföretagen), Engineering enterprises and TAW firms, 2006.

Report from the Swedish Institute for Labour Market Policy Evaluation (IFAU), How does the TAW branch work, 2004.

Statistics from Statistics Sweden (SCB).

Laws

The Act on Private Job Placement and Hiring-out of Labour (Lag om privat arbetsförmedling och uthyrning av arbetskraft, 1993:440)

The Act on Posting of Workers (Lagen om utstationering av arbetstagare, 1999:678)

The Act on Codetermination in the Working Life (Lagen om medbestämmande i arbetslivet, 1976:580)

The Act on Union Elected Representative’s Position at the Work Place (Lagen om förtroendemans ställning på arbetsplatsen, 1974:358)

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