Government proposals on sick pay facilitate impending bargaining round

An anticipated problem in the forthcoming pay bargaining for 1998 was removed in September 1997, when the Swedish Government proposed that the employer's responsibility for paying sick pay should be limited to 14 days.

In its budget bill for 1998, presented on 19 September 1997, the Government proposed that the Sick Pay Act be returned to its state before 1 January 1997 (prop 1997/98:1). It thereby removes one of the anticipated problems in the next bargaining round.

At present, employers are obliged by law to pay 75% of the worker's wage and other benefits for the first 28 days of absence because of illness, after which time the public health insurance system takes over the responsibility for the statutory entitlement. Until 1997, employers had a legal obligation to pay for only 14 days. In addition, they were obliged by collective agreements to pay 10% extra from the 15th day onwards, the worker thus receiving a total of 85% of his or her normal wage. When the Sick Pay Act was modified and the employers' statutory responsibility was extended, this meant that they were no longer obliged to pay the agreed extra 10%. The trade unions claimed that this was a breach of collective agreements and brought the dispute to court, but both an arbitration board (SE9704112N) and the Labour Court (SE9707130N) ruled in favour of the employers.

Both employers' organisations and trade unions have constantly implored the Government to return to the old order. After having tried to persuade the employers to conclude new agreements that re-established workers' rights, the Government has now given in to their appeals. Parliament will undoubtedly pass the bill, and the new rules will come into force as from 1 April 1998. At the same time, the payroll tax will be increased by the same percentage to restore it to its original level.