Efforts towards a new chapter in social dialogue

The Swedish Confederation of Trade Unions (LO) announced this summer that the time may be right for a new central agreement between the social partners. Against this background, the Confederation of Swedish Enterprise has invited LO and the Council for Negotiation and Cooperation to enter into negotiations. This could imply a new chapter for social dialogue and conflict management in Sweden, superseding the old agreement which dates back to the 1930s.

Background

In 1938, the Confederation of Swedish Enterprise (Svenskt Näringsliv), then known as SAF, and the Swedish Confederation of Trade Unions (Landsorganisationen i Sverige, LO) signed a central agreement in Saltsjöbaden, southeast of Stockholm. The agreement was devised by the social partners to prevent governmental interference in relation to new labour market regulations. Since then, the ‘spirit of Saltsjöbaden’ has constituted the basis for the country’s social dialogue. Until the 1970s, the government did not intervene greatly in new regulations concerning collective agreements in the labour market. Subsequently, however, the Co-determination Act (Medbestämmandelagen, MBL) in 1976 and the Employment Protection Act (Lagen om anställningsskydd, LAS) in 1982 increased the trade unions’ bargaining power in collective negotiations.

According to the employers, the substantial number of collective negotiations which have taken place this year, and which are now almost settled in the private sector, have demonstrated that the level of industrial action in the labour market is rather disproportionate. The core argument is that the employers cannot afford conflicts with the trade unions. Thus, the employers would like to see a transformation in the industrial relations landscape.

Negotiations on a new central agreement

Hopes were raised somewhat in relation to the emergence of a new social dialogue during the summer of 2007, when the President of LO, Wanja Lundby-Wedin, announced that no topic should be excluded from the new social partner negotiations. Since then, the Confederation of Swedish Enterprise has invited LO and the Council for Negotiation and Cooperation (Privattjänstemannakartellen, PTK) – which covers some 27 unions representing salaried employees in the private sector – to participate in discussions on how to develop a contemporary central agreement and to restore the balance of industrial action between the social partners.

The Confederation of Swedish Enterprise identifies, in particular, the need to modify the ‘right of conflict’ and the LAS. Furthermore, the confederation believes that the current labour market regulations are insufficient for a new reality and that globalisation demands more flexible solutions. It does not want to return to the previous central negotiations; instead, the confederation believes that the responsibility for wages and working conditions lies with the trade unions and employer organisations within the affected industry.

LO shares the opinion that a new understanding between the social partners is required to handle the global challenges facing companies and employees. In addition, LO believes that the social partners should be assigned the task of setting labour market conditions. The invitation from the Confederation of Swedish Enterprise is in line with what the board of LO has discussed regarding the preconditions needed for achieving a broader understanding of the labour market.

However, the LO leader Mr Lundby-Wedin stated that while the central agreement could be amended, the negotiations should not lead to changes regarding the right to industrial action. LO and its members will now discuss internally the invitation from the employer side and formulate its position in this regard.

In addition, Mari-Ann Krantz, the Chair of PTK, and also of the Swedish Union of Clerical and Technical Employees in Industry (Svenska Industritjänstemannaförbundet, SIF), declared that the new wave of negotiations should not result in any deterioration of conditions for its members. Ms Krantz is keen to maintain ‘the existing favourable balance in the labour market’.

Commentary

The abovementioned statements are a natural part of the game prior to the approaching negotiations. Many changes have taken place since the signing of the old central agreement by the social partners in 1938. The rapid changes in the global economy and the structural changes that have occurred necessitate an amendment of the social partners’ agreement. One issue that has been discussed during the collective negotiations this year concerns the right to industrial action and the ‘principle of proportion’ (proportionalitetsprincipen) – that is, the trade unions’ right to go on strike even though they are not directly involved in a conflict.

The trade unions fear that the centre-right government will possibly implement new labour market acts. For example, the Minister of Enterprise and Energy, Maud Olofsson, has made some comments in relation to preventing the unions’ right to blockade a workplace which does not have any union members or collective agreements, and with regard to shortening the principle of proportion.

However, the Swedish Prime Minister, Fredrik Reinfeldt, has assured both sides of industry that the government will not interfere with new labour market regulations, and that it wants the social partners to secure well-functioning collective agreements that address the issues of inflation and the competitiveness of the economy.

Thomas Brunk, Oxford Research