2004 Annual Review for Sweden

This record reviews the main industrial relations developments in Sweden during 2004.

Political developments

The minority Social Democratic Party (Socialdemokratiska Arbetarepartiet, SAP) administration, elected in 2002, continued in office during 2004. It operates with the help of the Left Party (Vänsterpartiet) and the Green Party (Miljöpartiet de Gröna). The next election will take place in 2006.

Collective bargaining

2004 saw a major collective bargaining round, encompassed almost the entire labour market and resulting in new three-year agreements for most sectors (SE0403103F) to replace those concluded in 2001.

Since 2001 the National Mediation Agency (Medlingsinstitutet, MI) has been collecting the majority of the collective agreements concluded at national/sectoral level. However, the number of local-level agreements is impossible even to estimate, as there is no requirement to register or report these agreement. As collective bargaining is on the whole very stable and 'predictable' in Sweden, the number of collective agreements at national/sectoral level is not likely to have increased or decreased to any significant extent in 2004 (facts and figures on the new national/sectoral agreements will be available in early 2005).

Pay

Since 1998, Sweden has adopted a system of three-year pay agreements, in both the private and public sectors. Comparing the agreements reached in 2004 with those signed in 2001 (SE0105102F), for 2001-4 the general agreed pay rise was 7.5% over three years, including an annual working time cut worth 0.5%, while for 2004-7 the general agreed pay rise is 7.3%, including a working time cut worth 0.5%. The real wage increase, after local negotiations, is estimated to average 3.5% for 2003. For 2004-7, the average real pay rise is estimated to be between 3% and 3.5% a year, which is considered to be moderate.

Working time

The 2004 agreements in industry and other parts of the private sector contained a further working time cut of 0.5% per year, continuing a trend that began in 1998. The agreements covering the government and municipal sectors do not provide for cuts in working time.

Job security

An 'adjustment agreement' for the blue-collar members of the Swedish Confederation of Trade Unions (Landsorganisationen, LO) in the private sector was concluded with the employers’ organisation, the Confederation of Swedish Enterprise (Svenskt Näringsliv) in February 2004 (SE0403101N). The agreement provides financial benefits and other support to workers who are being made redundant. Similar agreements already exist for other major employee groups and sectors.

Equal opportunities and diversity issues

The Equal Opportunities’ Ombudsman (Jämställdhetsombudsmannen, JämO) is the governmental, independent authority responsible for ensuring that legislation in the area of equality, mainly the Equal Opportunities’ Act (Jämställdhetslagen, 1980, amended in 1991), is adhered to. JämO administers the equality plans that every employer with more than 10 employees is obliged to draw up once a year. JämO also represents individuals before the Labour Court in equal pay cases and other cases regarding sexual discrimination and sexual harassment. For example, in June 2004, Jämo lost a case in which a female applicant seeking a position as chief constable was not selected for the job: despite her belief that she was the better candidate, the job went to a male applicant. JämO also undertakes a variety of wage surveys of the pay situation in chosen workplaces, and leads other equal opportunities projects. JämO also informs employers, trade unions and the public about equality legislation and is very active in the public debate. JämO publishes a range of reports, including two recent studies that deal with the practical and economic problems of parenthood (December 2004) and equal treatment in recruitment (4 January 2005).

Training and skills development

There were no specific collective bargaining developments in the area of training and skills development and lifelong learning in 2004. Many elements in this area are covered by the state education system, which also offers training to older workers. The social partners, not least the employers, take great interest in further education issues.

In redundancy situations, local collective agreements often include a variety of education and training programmes for workers who are faced with redundancy. The abovementioned adjustment agreements also contain arrangements for further education and training.

Other issues

There has been a continuing discussion among the social partners on which collective agreements should be applied in situations involving workers of different nationalities and cross-border working. The general view in Sweden is that Swedish collective agreements should be applicable to foreign workers coming to Sweden. Neighbouring countries such as Denmark and Lithuania have divergent views.

In February 2004, the European Court of Justice (ECJ) issued its judgment in a case referred to it by the Danish Labour Court (Arbejdsret), which related to industrial action notified to a Danish shipowner by a Swedish trade union in Sweden in 2001. After examining the question of jurisdiction, ECJ ruled that the case should be handled in Denmark. This may lead to serious consequences for Swedish industrial conflict rules, according to LO (SE0404102F).

A recent case involves L&P Baltic, a Latvian construction company, which is currently carrying out work in Sweden. However, it has refused to to observe the relevant collective agreement and pay Swedish wages to its workers, who are Latvian nationals. Consequently, in November 2004, the Swedish Building Workers’ Union (Svenska Byggnadsarbetareförbundet) launched a boycott of the company, which is in charge of building some school premises in Waxholm, near Stockholm. The case seems likely to end in the courts (SE0412101N).

Legislative developments

In the autumn of 2004, the government presented a bill on amendments to rules governing the sick pay system. This met with much opposition, mainly from employers’ confederations in the private and public sector. The new rules, which include increasing employer responsibility for sick pay, will come into force in January 2005 (SE0411103F and SE0401105F).

The government is preparing a bill on changes to the forms of employment set out in the Employment Protection Act (Lagen om Anställningsskydd, LAS). The plan was to issue the bill in the autumn of 2004, but it is now expected to be issued during the first half of 2005.

There was a discussion in parliament on transitional restrictions on the free movement workers from the new EU Member States in central and eastern Europe. However, the government’s proposal for such transitional rules was rejected in the spring of 2004. Sweden is thus one out of few 'old' EU countries not to have established such rules (SE0405103F).

In September 2004, a government committee issued a proposal for implementation of the 2002 EU Directive on information and consultation. It recommends minor changes to Swedish co-determination legislation (SE0409101N).

The organisation and role of the social partners

Two LO-affiliated trade unions, the Swedish Metalworkers’ Union (Svenska Metallarbetareförbundet) and the Swedish Industrial Labour Union (Industrifacket), decided to merge from the beginning of 2006 (SE0410101N). The new trade union will have around 470,000 members.

At the end of November 2004, four more LO unions announced that they had decided to cooperate in order to form a new trade union. The four trade unions are the Building Workers’ Union (Svenska Byggnadsarbetareförbundet, Byggnads), the Building Maintenance Workers’ Union (Fastighetsarbetareförbundet, Fastighets), the Swedish Electricians’ Union (Svenska Elektrikerförbundet, SEF) and the Painters’ Union (Målareförbundet). The first proposal for a potential merger will be issued in the summer of 2006. The planned union will have about 220,000 members and will be the third-largest union within LO. The largest trade union within LO is the Municipal Workers’ Union (Kommunalarbetareförbundet) with about 600,000 members. The second-largest is the Swedish Metalworkers’ Union.

Industrial action

There were no specific developments during 2004 in the area of industrial action. The year saw relatively few disputes that ended in strikes or other actions. A selection of individual disputes is given below:

• a pay freeze was agreed at the airline Scandinavian Airline Systems (SAS) in February (SE0402102F) after industrial action staged by the blue-collar Swedish Transport Workers' Union (Svenska Transportarbetareförbundet, Transport). The action included two days of strikes at Arlanda Airport, Stockholm;

• in April , a strike took place in the construction sector over local representation. The action was taken by construction workers in the road and railways sector and the dispute centred on a demand made by the Union for Service and Communication (Facket för Service och Kommunikation, SEKO) during bargaining over a new collective agreement for the abolition of a clause on the identity of union representatives in local-level negotiations. The dispute ended when employers conceded the union's demand SE0405101F);

• in May 2004, three weeks of strike action were staged by the SEF Electricians’ union. In addition to pay, a key point in the dispute was the union's demand to include work environment provisions in the collective agreement covering electricians. A new collective agreement was signed at the end of May, providing for a 7.3% pay rise over three years and the intervention of the Work Environment Authority in the event of disagreements over the work environment (SE0406104F). This was the largest-scale dispute in 2004, causing the loss of 13,626 working days;

• significant industrial unrest was experienced in the aviation industry during the latter part of the year, with Transport giving notice of strike action in the air transport sector (SE0410103N). However, in October, a new pay agreement for 2004-7 was signed for baggage-handlers, service and maintenance workers in the aviation sector, following mediation (SE0411101N). The settlement prevented the planned industrial action, which was mainly directed at the SAS airline; and

• finally, there was an ongoing conflict (see above) between the Latvian construction company L&P Baltic and Svenska Byggnadsarbetareförbundet, based on the company’s refusal to observe the relevant Swedish collective pay agreement (SE0412101N).

The Mediation Agency provides data on industrial action by working days lost, all workers and all actions. The latest figures were published in early January 2005 (covering 1 January-31 December 2004) and showed that over the previous 12 months 15,282 working days were lost to industrial action, involving 2,449 workers and 19 disputes.

Employee participation

In September 2004, a government committee proposed some small changes to the Swedish co-determination legislation to meet the requirements for transposition of the EU information and consultation Directive (SE0409101N) (see above).

The Nordic financial services company Nordea is planning to be one of the first multinationals to become a European Company, based on the European Company Statute. In the autumn of 2004 a local Scandinavian trade union was established in Nordea, made up of representatives from Denmark, Finland, Norway and Sweden (DK0411101N).

Absence from work

There has been a long-running discussion on the very high incidence of sick leave among Swedish workers. This has intensified over the past three or four years, due to the fact that the government has surveyed the sick leave situation and proposed certain courses of action. The government has promised to halve the incidence of sick leave through a range of measures, although this strategy does not yet appear to be having the desired impact. During 2004, the discussion focused on a proposal from the government on further co-financing of the sick pay by employers, meant as an incitement for companies to create a better work environment. Many employers, trade unions and non-governmental organisations (NGOs) opposed this proposal during the year. One of their arguments is that the proposal will mean more problems for people with disabilities or health problems when applying for jobs (SE0411103F, SE0401105F, SE0202103N, SE0210102F).

Psychological harassment

The concept of psychological harassment at the workplace and in schools and other institutions is a long-standing focus of public discussion. Sweden has adopted transposed EU Directives in the area of non-discrimination (SE9903148F), which include a ban on sexual harassment and other forms of harassment, based on factors such as ethnic origin and disability. The regulation on victimisation at work (Kränkande behandling i arbetslivet, AFS 293:17) issued by the Work Environment Authority (Arbetsmiljöverket) contains rules on how employers should deal with 'mobbing' at the workplace. According to the Work Environment Act (Arbetsmiljölagen, 1977), the employer has a legal responsibility to solve work environment problems as a whole, which includes not only physical but also psychological problems. Safety officers (skyddsombud ) - of whom there are around 7,000 in Sweden - are legally involved in work environment tasks in workplaces. These officers are elected either by trade unions or directly by employees. The Work Environment Authority is currently working on new regulations on social and psychological working conditions

Trade unions support members who assert that they are victims of mobbing, including support in court cases. However, mobbing among employees is not regulated specifically, although this kind of problem also falls under the employer’s legal responsibility for the work environment. There are no specific collective agreements on the issue - there are on the whole relatively few collective work environment agreements.

New forms of work

There are a range of 'atypical' work contracts and employment forms in Sweden. A report issued by the LO at the end of 2003 (Anställningsformer, arbetstider 2003, LO) indicates that since the 1990s, there has been a trend towards employers calling employees in to work at very short notice. The incidence of this practice has increased from around 40,000 such jobs in 1990 to around 125,000 at the beginning of the present decade - mainly in the hotel and restaurant business, transport, commerce and healthcare, and mostly involving female workers.

At the beginning of 2003, around 510,000 workers had some kind of fixed-term employment. The proportion of total employment made up by all fixed-term employment forms increased from 9.4% in 1990 to 13.6% in 2003.

The government is planning to issue a bill on changes in employment protection legislation, based on the proposals from a committee briefed to look at changes in fixed-term employment, which examined this area in 2002 (SE0211104F). The bill is expected in early 2005.

Outlook

The performance of the Swedish economy is slowly improving. In 2005, the construction sector is expected to expand and the service sector will stabilise, although the retail and chemical industry sectors may experience redundancies. However, GNP growth is expected to fall, from 3.2% in 2004 to 2.8% in 2005. The inflation rate is expected to stay below 2% in 2005 and 2006 and the real pay rises are expected to be 3.0%-3.5%. The 'open' unemployment rate was 5.5% in 2004, and is forecast to decrease slightly in 2005 and 2006, to 5.1% and 4.8% respectively (according to LO and Statistics Sweden). The relatively high rate of unemployment remains a problem and LO has stated that more resources will be needed for labour market policy measures.

At the same time employment is forecast to increase by around 30,000 jobs per year the coming two years, mostly in the local public sector. This increase will be partly due to a new 'sabbatical leave project', allowing 12,000 unemployed people to work as stand-in workers up to one year (SE0501101N). Commentators note, however, that these are temporary changes in employment and do not affect the real figures. The government has also asked the municipal sector to increase various forms of further education and has reserved SEK 6 billion for this purpose from the national budget.

The public debate on the high incidence of sickness absence and measures to reduce the number of people taking sick leave will continue. Other discussions will concern the draft EU services Directive (EU0412203N) and its implications for the Swedish labour market.

Another debate concerns the long-running and very important issue of Swedish collective agreements, and to what extent they should be applicable to foreign employers and employees coming to work in Sweden. A further issue, linked to this, is Sweden's right for trade unions to take to sympathy actions when another union is involved in an industrial conflict. It is probable that one or two of these issues may end up in the courts.

Planned mergers among several blue-collar trade unions and, in one case, employers’ organisations - the Swedish Federation of Municipalities (Kommunförbundet) and the Swedish Federation of City Councils (Landstingsförbundet) - are currently being prepared. Some organisational issues complicate the planned mergers.

The 2004 bargaining round was finalised in most sectors during the year but will be completed during 2005 by collective agreements in the remaining sectors. In early spring 2005, the municipalities and city counties will negotiate new pay agreements, expected to cover 2005-7. In 2003, the municipal workers’ union gave notice to cancel the existing agreement and a new two-year pay agreement was concluded, after extensive strike actions (SE0306103F). It remains to be seen whether this powerful union, the largest within LO, and which represents the lowest paid group of workers in the country, will continue its fight in order to give these workers, most often women, further extra pay rises. (Annika Berg, Arbetslivsinstitutet)

[The statistics in this article are taken from LO's half-year report Ekonomiska utsikter, hösten 2004 and monthly reports 2004 from the National Institute of Economic Research, Konjunkturinstitutet)].