Job dissatisfaction findings fuel debate on labour law reform

According to a new report by the Confederation of Swedish Enterprises, some 350,000 employees in Sweden are dissatisfied with their jobs. The confederation believes that amending the Employment Protection Act (LAS) is a key factor for increasing mobility in the labour market. However, the Swedish Trade Union Confederation argues that workers’ dissatisfaction is instead related to poor working conditions. Surprisingly, the issue of amending the LAS has remained absent from the national political agenda.

Background

The Employment Protection Act (Lagen om anställningsskydd, LAS), and its design, has traditionally been one of the most keenly debated issues in the context of Swedish labour market policies, creating a large divide between both social partners and policymakers. Critics have argued that the legislation has hindered labour market flexibility and thereby economic growth and new employment opportunities. Conversely, those in favour of the LAS have praised the legislation for empowering employees and contributing to more secure working conditions.

Employee dissatisfaction

In a recent report (in Swedish) published by the Confederation of Swedish Enterprises (Svenskt Näringsliv), the organisation highlights the issue of the LAS, albeit from a slightly different angle, by considering its possible effects on employees’ work satisfaction. According to the study, some 350,000 employees – out of a total workforce of 4.4 million employees in 2007 according to Statistics Sweden (Statistiska centralbyrån, SCB) – are not satisfied with their current jobs. The confederation argues that this reflects the insufficient flexibility of the labour market. Instead of changing jobs, employees choose to remain in their existing job since status quo provides them with security, even though they may have preferred another job. The employer confederation argues that certain provisions of the LAS could be partly responsible for this problem.

A central aspect of the LAS are its provisions on the order of selection for redundancies (turordningsreglerna). These provisions protect employees with a longer employment period when lay-offs are due to be implemented. According to the Confederation of Swedish Enterprises’ report, this system makes employees reluctant to change employer, as it would affect their chances of keeping their job in the event of redundancies. Moreover, this aspect of the LAS might prevent dissatisfied employees from applying for new jobs, thereby creating additional problems such as work-related stress and sickness.

Disagreement among social partners

The Swedish Trade Union Confederation (Landorganisationen i Sverige, LO) does not share the view that the current labour legislation could be a potential cause of job dissatisfaction. LO criticises the report for neglecting essential work environment issues and indicates that the solution to the problem is instead connected to employers’ responsibilities. The confederation highlights the need for employers to become actively involved in issues relating to working conditions. Furthermore, LO underlines the importance of highlighting work environment issues in collective bargaining by creating agreements on proactive measures to tackle work-related sickness, such as a preventative company health service, and increasing employees’ influence on working conditions issues.

Government position on LAS amendments

While debate on another aspect of the LAS – namely its design – has taken place between two of the central social partners, surprisingly the issue has remained absent from the national political policy debate. Since the 2006 election, the political party most critical of the LAS, the Moderate Party (Moderaterna), has shifted its view on this issue and does not currently see any reason for changing the provisions regarding the selection order for redundancies. As a result of this change of view, large support has been generated within the Swedish parliament for maintaining the current design of the LAS, and the government has given no indication that it intends to make any extensive amendments to the legislation.

Commentary

The debate between the Confederation of Swedish Enterprises and LO over the issue of amending the LAS is not new in itself. However, it is interesting that the Confederation of Swedish Enterprises has raised this issue, at a time when proposals to amend the LAS seem distant. Even though the government has given no indication that it intends to make any major amendments to the LAS, this latest report from the Confederation of Swedish Enterprises connects the issue of labour law reform to two of the government’s key issues – reducing work-related disease and increasing labour market flexibility. Thus, this new approach might revitalise the issue and lead to more intense debate among the social partners and policymakers about the current labour legislation.

Michael Wahman and Thomas Brunk, Oxford Research