1999 Annual Review for Sweden

This record reviews 1999's main developments in industrial relations in Sweden

Economic developments

GDP growth in 1998 was 2.6%. Preliminary figures for 1999 show a rising trend, with growth of 3.7% in the second quarter of the year compared with the same period in 1998 (according to data from Statistics Sweden). GDP at market prices, according to Eurostat, was SEK 1,890,202 million in 1998. Public debt was 74.2% of GDP in 1998, and the general government deficit was 1.9% of GDP. The unemployment rate (as defined by Eurostat harmonised indices) was 6.6% of the labour force, as at October 1999. The inflation rate (expressed in Eurostat harmonised indices of consumer prices), was 0.8% in November 1999.

The 1990s began with a severe financial crisis during 1991 and 1992. The economy was "overheated" and the crisis in the finance and real estate sectors was very deep. The Swedish krona (SEK) depreciated quickly when it was de-linked from the European Currency Unit (ECU) and unemployment was rising towards a level of 10%. After 1992, a "third industrial revolution" was initiated - jobs for white-collar workers expanded in the new "services society". The pharmaceutical industry expanded, as did the computer, electronics and telecommunications sectors, and the entire export industry began to grow. The "Swedish model" was questioned, while capital flows and large parts of the economy were deregulated. Industrial relations became more and more decentralised, the welfare system and public sector were cut heavily and the national budget deficit was kept in check.

Political developments

Parliamentary elections were held in September 1998, which resulted in the Social Democratic Party (Socialdemokratiska Arbetarepartiet, SAP) gaining 36.6 % of the votes and forming a minority government. Thus, as a minority government, the SAP needs the support of other political parties, such as the Left Party (Vänsterpartiet) and the Green Party (Miljöpartiet de Gröna), both of which are opposed to membership of the European Union. Sweden is not participating in the third stage of EMU, but the government will be working more on the EMU issue during 2000, following SAP's special party congress, to be held in March 2000, which will decide where the ruling party stands. The Prime Minister, Göran Persson, along with the executive committee of SAP, holds a positive attitude to EMU that may be described as "yes, but later". One issue for discussion during the SAP congress is whether Sweden should hold a referendum on this issue later in 2000.

Collective bargaining

A large part of the most recent collective agreements on pay at national sectoral level were concluded in 1998 (SE9806190F). Almost all parts of the private and the public sectors were involved in the negotiations. The agreements are in most cases for a duration of three years and renegotiations will start early in 2001. Most of the agreements contained new provisions on working time.

Although 1999 has been a quiet year between bargaining periods, some negotiations have taken place at sectoral level, principally resulting in agreements in four large sectors:

• between bus drivers represented by the Municipal Workers' Union (Svenska Kommunalarbetareförbundet) and the Bus and Coach Employers' Association (Bussarbetsgivarna) (SE9902144N);
• between taxi drivers represented by the Swedish Transport Workers' Union (Svenska Transportarbetareförbundet) and the Swedish Road Transport Employers' Association (Biltrafikens Arbetsgivarförbund) (SE9910103N);
• between electricians represented by the Swedish Electricians' Union (Svenska Elektrikerförbundet) and the Electrical Contractors' Organisation (Elektriska Installatörsorganisationen) (SE9911104N); and
• between construction workers represented by the Building Workers' Union (Svenska Byggnadsarbetareförbundet, Byggnads) and the Swedish Construction Federation (Byggentreprenörerna) (SE9910199N).

The agreements for bus drivers, taxi drivers and electricians were all preceded by some kind of industrial action (see below under "Industrial action") while, for once, there was no conflict in the construction sector.

Pay

There are as yet no official figures available relating to total pay increases in 1999. However, the impact of the raft of three-year collective agreements currently in force seems to be one of controlled wage increases with only marginal examples of wage drift. The four new collective pay agreements mentioned above all follow the 3% pay increase norm for 1999 that was set in the 1998 bargaining round.

Working time

A working group with the task of examining working time issues was appointed at the end of 1998 by the government. The chair of the group, also the chair of Social Democrat Women in Sweden, Inger Segelström, announced in late 1999 that the working group expects the government to issue its final report in the autumn of 2000, in which it will set out its view on cuts in working time. The working group itself will report its results - if not in form of actual proposals, then at least as a basis for a political discussion about different possibilities of cutting working time - in the spring of 2000. The group has also asked the National Institute of Economic Research (Konjunkturinstitutet, KI) to calculate the possible effects for the economy of a legally-enforced reduction of working time. KI is expected to be in a position to respond in February 2000.

In the 1998 collective bargaining round, some trade unions succeeded in introducing some new elements into collective agreements with regard to pay and other working conditions. As there was no bargaining on a large scale in 1999 - most of the agreements run for three years and will thus expire in the spring of 2001 - reducing working time was not the most important issue on the political agenda during 1999. Some studies were published, among them a report on paper workers' views on this subject (SE9904153F). However, it is expected that the discussion on reducing working time will be lively in 2000.

Equal opportunities

There were no significant developments in bargaining on equa opportunities in 1999. However, the office of the Equal Opportunities Ombudsman (Jämställdhetsombudsmannen, JämO) worked on four particularly important cases of wage discrimination handed over to the Labour Court (Arbetsdomstolen), none of which were concluded in 1999. The cases deal with the issue of alleged sex discrimination, centring on claims that male medical technicians are more highly paid than workers in comparative female-dominated professions at the same hospital, such as nurses and midwives. JämO is of the opinion that the workers in question are performing jobs of equal value.

In September 1999, a tightening of the Act on Equality between Men and Women were proposed by a governmental committee chaired by special commissioner Hans Stark, a former chief judge in the Labour Court (SE9909195N). The changes in the Act are aimed at easing the fight against wage discrimination and also at harmonising Swedish law with EU equality legislation. 1999 also saw significant new anti-discrimination legislation (see below under "Legislative developments").

Job security

The main initiatives in the area of job security during 1999 were taken by the government rather than the social partners. In April 1999, the Swedish parliament voted for a change in the "order of priority" rules used in cases of redundancy (SE9912111F). A majority in parliament, including the Green Party, voted against the government, which must now produce a proposal of its own along the lines proposed in the bill. A proposal is expected in spring 2000.

The issue on which the Social Democrat government was outvoted was a bill, drawn up by the Greens, to change the "order of priority" rules for redundancies in the Employment Protection Act (lagen omanställningsskydd). The change would involve a reversal of the basic principle of "last in, first out" in a redundancy situation. The parliamentary opposition parties argued that in companies with fewer than 10 workers, it should be possible for the employer to exclude any two employees from the "last in, first out" rule when drawing up a list of workers to be made redundant. In this way, the employer would be able to retain some of its younger, more skilled and "key" personnel (SE9905158N).

Training and skills development

Late in December 1999, the Swedish government presented guidelines in the area of individual skills development. These will be examined by a commissioner, who will subsequently propose a new system for individual skills development, which will be available to all individuals and entrepreneurs. A part of the report will be published in the spring of 2000 in order to give the social partners time to examine it within the context of their demands for the 2001 bargaining round. The final proposal is due by 15 January 2001. Parliament has set aside in the national budget SEK 1.35 billion for 2000 and thereafter SEK 1.15 billion per year for the new system of individual skills development (SE0001118N).

Legislative developments

Three new anti-discrimination Acts were approved in March 1999 by the Swedish parliament (SE9903148F). The Acts contain bans on discrimination in working life covering discrimination on grounds of ethnic origin, disability and sexual orientation (SE9912212F) and came into force 1 May 1999.

In late May 1999, parliament approved a new Act implementing the 1996 EU Directive concerning the posting of workers in the framework of the provision of services. The National Board of Occupational Safety and Health (Arbetarskyddsstyrelsen) has been charged with the responsibility of informing employers about the employment conditions which apply to the posting of workers to Sweden. The social partners are expected to keep the relevant parties informed of any national collective agreements that may be of interest to the posting employer (SE9906172N).

After years of disputes and a long series of failures in trying to solve the different problems relating to Swedish wage formation, the social partners finally conceded defeat in March 1999 (SE9903150N). The government took over and in December 1999 a bill was presented, proposing a new Mediation Authority. The purpose of the new authority will be to mediate in labour conflicts and work towards satisfactory pay determination. The new authority will start work in June 2000 (SE9912110F).

The Ministry for Industry, Employment and Communication proposed, in November 1999, an increase in maximum daily unemployment benefits. The new rules will, if parliament accepts the bill, come into force on 1 October 2000 (SE9912108N).

The organisation and role of the social partners

A clear tendency to emerge during 1999 within the three Swedish trade union confederations was the readiness to merge. Serious discussions continued throughout 1999 on several possible mergers in the near future. The boundaries between white-collar workers and university graduates are becoming more and more unclear, as are those between blue- and white-collar workers. It is also believed that coordinated negotiations would be more effective. Within the Confederation of Salaried Employees (Tjänstemännens Centralorganisation, TCO), the Union of Civil Servants (Statstjänstemannaförbundet), the Swedish Union of Local Government Officers (Sveriges Kommunaltjänstemannaförbund) and the Financial Sector Union of Sweden (Finansförbundet) are the unions that have the most advanced merger plans. No decisions have as yet been made - there is, among other factors, a need for the relevant unions to hold congresses in advance of any concrete development. Two central confederations, TCO and the Swedish Confederation of Professional Associations (Sveriges Akademikers Centralorganisation, SACO), are also considering a merger in order to create one central organisation for white-collar workers and university graduates.

On 1 January 2000, the Sheet Metal Workers' Union (Bleck- och plåtslagareförbundet) and the Building Workers' Union - both affiliated to the Swedish Trade Union Confederation (Landsorganisationen i Sverige, LO) - merged. The LO–affiliated Commercial Employees' Union (Handelsanställdas förbund) and the Swedish Transport Workers' Union (Svenska Transportarbetareförbundet) also began discussions in 1999 concerning some form of cooperation in the future.

Industrial action

Three large conflicts took place during 1999 (see above under "Collective bargaining"). The first occurred in February, when some 8,400 bus drivers went on strike, largely over a working time issue (SE9902144N). The drivers were demanding more breaks between bus journeys. This industrial action ended at the beginning of March. In September, taxi drivers blockaded passenger traffic to the country's four biggest airports in support of demands for an increase in guaranteed pay (SE9908186N). In September, electricians operated overtime bans and a bar on the employment of new electricians (SE9909190N). This conflict took place primarily for reasons of safety and lasted for six weeks, as did the taxi cab drivers' industrial action.

National Action Plan (NAP) for employment

In its 1998 National Action Plan (NAP) for employment that translated the EU Employment Guidelines into practice, the Swedish government set the objective of reducing unemployment to 4% by 2000 (SE9805185F). The NAP also stated that it is necessary to improve the wage formation process in Sweden. Thus, in December 1999, the government proposed that a new Mediation Authority should be formed (SE9903150N). This announcement follows the inconclusive outcome of the "exploratory talks" over a "pact for growth" on this issue between the social partners during 1998. The actual effects of the 1999 Swedish NAP will not be known before the autumn of 2000.

However, experts are united in the belief that the labour market is performing well and that 2000 will be a good year. During 1999, employment increased by 90,000 workers. The Labour Market Board (Arbetsmarknadsstyrelsen, AMS) estimates the increase for 2000 to be another 52,000. The supply of labour is increasing mostly due to the fact that there are rising numbers of graduates. In addition, the number of places on government labour market programmes will be cut from 173,000 in 1999 to 134,000 in 2000. The effect on unemployment will therefore be moderate both for 1999 and 2000. The rate of "open" unemployment in Sweden decreased from 6.5% to 5.6% during 1999 (preliminary figure). The AMS estimates that open unemployment in 2000 will decrease further, to 5.1%. The private service sector created 64,000 new jobs in 1999 and in 2000 there will be approximately 35,000 more new jobs in that sector. A certain increase is also expected in the local government sector, industry and the construction sector.

However, despite the positive developments experienced recently, some potential problems remain, such as labour shortages, particularly in the case of professionals such as teachers, doctors, dentists and nurses.

During 1999, labour market policies focused on promoting growth. The government declared in its budget proposal for 2000 (presented to parliament on 20 September 1999) that priority should be given to the procurement of new jobs and different kinds of skills development. The government also wants to put more pressure on unemployed people to be active in job seeking (SE9912108N).

In order to stimulate individual skills development in working life, the government has proposed to set aside SEK 1.35 billion in 2000 and SEK 1.15 billion every year from 2001 (see above under "Training and skills development"). To avoid "bottlenecks", the government has proposed to set aside SEK 130 million to train people who are already employed and lacking a required skill.

The impact of EMU on collective bargaining and industrial relations

As Sweden is not currently participating in the third stage of EMU, the debate concerning its potential effects on collective bargaining is not being carried out in as heated a way as amongst the social partners in many other EU Member States. However, some coordination with other Member States is developing - the limited bargaining which has taken place during 1999 has followed the EU "norm" (see above under "Collective bargaining").

Employee representation

In July 1999, a report on employee representation on company boards within the framework of the 1976 Swedish Board Representation Act was presented. The report was based on a survey, undertaken by a researcher, Klas Levinsson, at the National Institute for Working Life (Arbetslivsinstitutet). The results from the survey, which had been carried out among managing directors and board chairs in 660 Swedish companies, showed that management as a whole was very satisfied with the cooperation and work carried out in their respective boards by the employee representatives (SE9907181F).

New forms of work

The temporary work agency sector is growing steadily. In 1999, 22,000 workers were employed by such agencies, and the prognosis for 2000 points to more than 30,000 workers. Some 70% of temporary agency workers are employed in Stockholm, but the phenomenon is growing mostly in the western and southern regions of the country. In the spring of 1999, the Salaried Employees' Union (Tjänstemannaförbundet, HTF) withdrew from the collective agreement for temporary work agencies (SE9905159N). The union maintains that the guaranteed payment for agency workers should be increased from 75% to 100% of monthly pay. Negotiations started but were "frozen", as the positions of the parties involved were very far apart. The negotiations were planned to restart at the end of January 2000.

Local government and county councils throughout Sweden have been forced to employ, as a consequence of a legislative change, between 30,000 to 40,000 substitute workers in the health and care sector on a permanent basis. The new rules, which came into force on 1 January 2000, have in practice been in operation in many cases throughout 1999. Under the new rules, workers who have been working as substitutes for a total of three years during a five-year period are to be considered as permanent workers. A spokesperson for one of the employers' bodies, the Swedish Association of Local Authorities (Kommunförbundet), does not see the new legislation as problematic for the moment, particularly as there is likely to be a need to recruit new personnel throughout 2000.

Other developments

The statistical report from the Occupational Safety and Health Administration (Arbetarskyddsstyrelsen, ASS) on industrial injuries (occupational accidents and work-related illnesses) for 1998 showed a deterioration, except in the case of fatal accidents, which totalled 23 in 1998 and 66 in 1997. Occupational accidents and work-related illnesses increased after a long period of decline. In a prognosis for 1999, made on the basis of reports from the Labour Inspectorate (Yrkesinspektionen), the workplace inspecting authority controlled by ASS, it is held to be plausible that the negative trend has continued. During the whole of 1999, accidents at work are estimated to have increased by 6% compared with 1998, when there were 34,800 occupational accidents. In parallel, work-related illnesses increased by some 20%, according to ASS. In 1999 some 22,000 incidences of work-related illnesses were registered, compared with 16,800 in 1998. One-third of the total number of work-related accidents and illnesses are related to musculo-skeletal disorders, mostly among female workers, fitters, process operators, machine operators and nurses' assistants. In its plan of activities for 1997 to 1999, the priority supervision areas for ASS were musculo-skeletal disorders, psychological and social conditions, hypersensitivity, dangerous machinery and serious accidents. An evaluation of its work is expected later in 2000.

Outlook

Sweden is hoping to have a good year in 2000, in term of more jobs and lower unemployment. In terms of collective bargaining, the leading actors will be busy throughout 2000 preparing the bargaining round which starts at the beginning of 2001. A new Mediation Authority will start its work during the year, and will be able to provide the social partners with essential economic information and mediation. The issue of whether Sweden will apply for membership of the third stage of EMU will be politically crucial.

The trend towards trade union mergers, or forms of close cooperation, is likely to continue. Finally, working time is set to maintain its high profile in 2000, as parliament may be considering a government bill on the reduction of working time.