Conflict in construction sector ends in temporary agreement

In April 2009, the Swedish Building Workers’ Union announced a planned strike, involving over 3,300 members, against the failure to secure a new collective agreement. In order to avert the strike, the Swedish Construction Federation agreed to the trade union’s demands and on an interim agreement. However, it claims that it was forced to do so due to the financial crisis and the difficulties being faced by the construction and building sector.

Background

During a wave of strikes in 2007, collective agreements were settled between the Swedish Building Workers’ Union (Svenska Byggnadsarbetareförbundet, Byggnads) and the Swedish Construction Federation (Sveriges Byggindustrier, BI). However, in September 2008, Byggnads cancelled the three-year long collective agreements, one year in advance. The objective was to start negotiations to replace the two current collective agreements, first established in 1924, with one modern and more effective agreement. Byggnads wanted to reach a collective agreement and replace the old agreements before the wage negotiations of 2010 (see Byggnads press release (in Swedish), 4 April 2009).

BI agreed on the need for a more modern collective agreement, and stated that the old agreements were sometimes difficult to interpret and therefore resulted in a lot of disputes between the social partners (see BI press release (in Swedish), 4 April 2009).

Negotiations on new agreement prove difficult

However, the social partners strongly disagreed during the negotiations for a new agreement. BI wanted an agreement that was more competitive in the context of the international market. Byggnads accused BI of seeking to change the ‘balance of power’ between the social partners. Although mediators became involved, they failed to resolve the conflict and replace the two old agreements with one new agreement. The agreements, which were cancelled in September 2008, finally expired on 1 April 2009. On the following day, Byggnads announced a planned strike for 15 April. The strike was to involve 3,363 workers at about 200 construction sites and encompassing around 60 construction companies. Byggnads and BI did not succeed in replacing the two old agreements. To avoid facing a situation where no collective agreement was in place, the trade union and the employer organisation agreed on temporary collective agreements, proposed by the mediators on 4 April. Consequently, the strike was averted. The temporary agreements are valid until the next round of negotiations on 31 March 2010.

Outcome of negotiations

Working group established

The negotiations resulted in the establishment of a working group, consisting of representatives from both Byggnads and BI. The working group will be assisted by external experts and operate according to the directives suggested by the mediators. The group’s remit is to devise a proposal on a modernised collective agreement by the end of October 2009.

Wages and working conditions

The social partners also reached agreement on a number of other issues. Firstly, the workers are to retain the SEK 3.27 (€0.313 as at 20 May 2009) hourly wage increase that was agreed on in the 2007 collective agreement. At the same time, the working environment is also to be enhanced: as a consequence of the negotiations, the regulation of the standard of facilities, where workers have their breaks and meetings, is to be improved.

Control of wage conditions

According to the 2007 collective agreement, Byggnads has the right to control wage conditions for organised as well as unorganised workers; this provision was introduced to ensure that wage levels in the collective agreement are pursued. The control measure arose due to the fact that foreign employers often signed the collective agreement without following the conditions stipulated. However, BI does not agree with the concept of trade union control over wage conditions, claiming that it violates the Personal Data Act (Personuppgiftslagen, PuL). In the course of the negotiations, it was decided that Byggnads will continue to have the right to control wage conditions for its own members until the legal trial in the Administrative Court of Appeal (Kammarrätten) has settled the matter.

Reactions of social partners

Byggnads believes that BI was acting irresponsibly by provoking a conflict between the social partners during the economic recession. The President of Byggnads, Hans Tilly, agrees that it was a misjudgement to cancel the 2007 agreement, but he points out that the organisation could not have foreseen the recession (see article (in Swedish) in HD newspaper, 5 April 2009). Byggnads argues that the trade union had to announce the strike action in order to avoid a situation without valid collective agreements and to protect its members’ rights (see Byggnads press release (in Swedish) 1 April 2009).

For its part, BI contends that Byggnads’ strike action would have been irresponsible because of the present economic downturn. The Managing Director of BI, Bo Antoni, claims that it had no other choice than to take social responsibility and agree with the trade union’s demands to avert the strike. BI contends that a strike would have been detrimental to the Swedish construction industry, where many companies are fighting for survival (see BI press release (in Swedish), 4 April 2009).

Meanwhile, Byggnads claims that BI threatened to withdraw the wage rise that was already settled in the 2007 agreement. BI, on the other hand, emphasises that the 2007 wage level was settled during an economic upswing and that Byggnads needed to agree on a collective agreement that is more similar in its provisions to those that exist internationally (see BI [press release (in Swedish, 75Kb PDF)](http://avtalsnytt.bygg.org/Files/Pressmeddelanden/2008-09/090209 Har Byggnads glomt.pdf), 9 February 2009).

Karolin Lovén, Oxford Research