Government proposes post-Laval legislation

The Swedish government has proposed a new law on a reformed labour market that limits the possibility for industrial action against foreign employers. The reforms are seen as necessary because of the implications of the European Court of Justice ruling in the Laval case. The proposal was preceded by an inquiry and a lengthy period of discussion between stakeholders. Despite this, the government has not taken criticism into account, and its bill is thus similar to the inquiry.

As highlighted in previous EIRO articles (SE0706029I, SE0801019I, SE0804029I, SE0811029I, SE0901029I, SE0905029I), the Laval case has posed challenges for the Swedish labour market model and the parties involved.

After the European Court of Justice (ECJ) delivered its verdict in the Laval case (117Kb PDF) in December 2007, the Swedish government initiated the Laval Inquiry in April 2008 in order to make amendments to Swedish labour legislation for posted workers as a consequence of changes to Community law and the ECJ verdict. The inquiry (SOU 2008:123 (in Swedish, 3.3Mb PDF)) came to an end in December 2008 and the social partners have since strongly criticised the conclusions of the inquiry.

Government presents bill for legislation

The legislative process in Sweden enables all stakeholders to offer their input, but the government is not obliged to defer to it. However, the strong criticism against the Laval Inquiry, especially from trade unions (SE0905029I; see also Sweden – A country profile), led many people to believe that the government’s legislative proposal would differ substantially from the proposals contained in the Laval Inquiry. When the government presented its bill (in Swedish, Kb PDF) on 10 November 2009, it was however clear that this was not the case. The bill will now be processed in parliament, where the government has a stable majority.

Legislative provisions of proposed bill

  • proposed bill stipulates that a collective action against a foreign employer, in order to obtain the same employment and working conditions as laid out in a collective agreement for workers posted in Sweden, may be taken only under certain conditions. Thus, collective action can only be taken to demand improvements in working conditions for workers in a foreign company that:
  • correspond to the terms of a national collective agreement in Sweden for corresponding workers;
  • relate only to the minimum wage or, in some areas, other minimum conditions;
  • are more favourable for workers than conditions provided by law.

Industrial action may not be taken if the employer can prove that workers already have access to conditions that are at least as favourable as the minimum conditions in a Swedish national collective agreement. The Swedish Work Environment Authority (Arbetsmiljöverket, AV) will assist foreign companies with information about conditions in relevant collective agreements.

Overall, the proposed bill’s legislative provisions imply a limitation of trade unions’ right to take industrial action compared with the present situation. Up until now, Swedish trade unions could demand all working conditions to be in line with a comparable collective agreement.

Trade union views

The Swedish Trade Union Confederation (Landsorganisationen, LO) is in favour of some parts of the government bill, namely the section stipulating that trade unions can demand certain minimum conditions in relation to night work and breaks. However, LO criticises the fact that Swedish collective agreements will no longer have priority, and foreign collective agreements will be sufficient, given that they meet certain requirements. LO highlighted in a press release (in Swedish) that this creates loopholes in the legislation, and that it will lead to wage dumping in the long run.

The Swedish Building Workers’ Union (Svenska Byggnadsarbetareförbundet, Byggnads), the trade union involved in the conflict that resulted in the Laval case, also voiced criticism in a press statement (in Swedish). Byggnads argues that the proposed bill only provides for taking industrial action in relation to too few conditions. For instance, the trade union emphasises that the new legislation renders it possible for employers to choose not to insure their employees in the case of accidents, which is unacceptable according to the union, and also highlights the risk of wage dumping. Byggnads, as well as other trade unions, argue that the Laval case should be ‘solved’ at European level, to emphasise trade union rights in relation to the free movement of workers and employers.

Employer views

Commenting in a news release (in Swedish), the Confederation of Swedish Enterprise (Svenskt Näringsliv) was also critical of the bill, but for opposite reasons to the trade unions. Svenskt Näringsliv argues that the conditions for which trade unions have the possibility to take industrial action are too widely defined. The confederation also foresees problems for foreign companies to predict what wage costs will be when they establish their business in Sweden.

In a statement to the press (in Swedish), the Swedish Association of Local Authorities and Regions (Sveriges Kommuner och Landsting, SKL), a large public employer organisation, welcomed the legislation. However, it calls for more clarity in order to avoid conflicts in the future.

Commentary

It will be interesting to see in the future to what extent the law contributes to enabling wage dumping, or whether the trade unions will continue to have sufficient power to take industrial action to defend wages and working conditions.

Mats Kullander, Oxford Research

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