Cutbacks at Vattenfall energy group affect 1,000 employees

During autumn 1998, the Swedish energy group Vattenfall negotiated with trade unions over staff cutbacks that would affect 1,000 of its employees. One of the unions accepted the need for redundancies, but managed to convince the employer to postpone the dismissals. This caused a rift with the other trade union concerned.

In late September 1998, the large Swedish energy group Vattenfall announced that 1,000 of its 8,000 employees would have to be made redundant before the year 2000. The oldest employees would be offered early retirement, while others were to take part in training to prepare them for new tasks in the group. Some 500 workers would, however, be dismissed.

The trade unions involved were taken by surprise, and questioned the need for 1,000 workers to be made redundant. In 1997, the state-owned Vattenfall group made a profit of SEK 4 billion. They also argued that the company was acting short-sightedly, as the cutbacks would mean a loss of other jobs. In northern Sweden there are small communities which are entirely built around the business of Vattenfall.

Vattenfall, on the other hand, claimed that profits were declining due to the 1996 deregulation of the energy market. Customers were not ready to pay for the high technical standards and reliability that Vattenfall has traditionally maintained, and so the company had to rationalise its activities.

In October, the representatives of the Union for Service and Communication, Energy Branch (SEKO Energi) resigned their seats on the company's boards and consultative bodies. During the negotiations that Vattenfall had to initiate before it could decide on the redundancies, further antagonism developed between the union and the employer. According to SEKO Energi, Vattenfall was seeking to ignore the statutory requirements for selection of those to be made redundant, in nine cases out of 10. Even more unacceptable to the trade union was that one of the companies in the group allegedly presented a list with offensive and "gossipy" opinions on individual employees, which it wanted to use as its basis for selection.

Nevertheless, on 24 November 1998 SEKO Energi and Vattenfall reached an agreement which means that none of the group's blue-collar workers will be dismissed before 2001. Until then, the employer will try to find voluntary solutions for the 235 workers who have been selected for redundancy. The company has also agreed to invest an extra SEK 100 million in 1999, which will guarantee employment for around 70 workers. In concluding this agreement, SEKO Energi thus accepted that there is a need for cutbacks, although the redundancy programme would be slowed down.

However, the agreement has created conflict with the other trade union involved. Although the SEKO representatives have taken up their seats again on the company boards and consultative bodies, the Swedish Union of Clerical and Technical Employees in Industry (Svenska Industritjänstemannaförbundet, SIF) has broken off negotiations entirely. SIF refuses to accept the need for redundancies in the group and criticises SEKO for negotiating about the redundancies with the employer.