2001 bargaining rounds nears completion

In May 2001, the last major agreement was signed in Sweden's 2001 sectoral bargaining round. The new agreements generally provide for pay increases of around 8.5% over three years, often including working time cuts worth 1.5%. Bargaining generally proceeded relatively smoothly, with little industrial action.

A new collective agreement concluded for the local government sector in mid-May 2001 was the last of the major sectoral agreements to be signed in Sweden's spring 2001 bargaining round over new deals to succeed the three-year accords concluded in 1998 (which provided for average pay increases of 2.5% per year) (SE9806190F). Bargaining remains to be completed only for a few groups - notably blue-collar hotel and restaurant workers, white-collar workers at the state-owned Swedish Television (where problems are predicted), and some other white-collar groups in local authorities and the private sector. The main developments in the bargaining round are set out below.

Early agreements

The 2001 bargaining round started in autumn 2000 when the social partners in the metalworking industry, and subsequently other industries, exchanged demands (SE0010170N). Negotiations proper started as planned at the end of 2000. "Normally," the first sector to sign a new pay agreement in the Swedish bargaining round is metalworking. This time, however, it was the parties in the chemical industry that entered the arena first. Two weeks before their existing accord was due to expire, the Almega Industrial and Chemical Association (Almega Industri och Kemiförbunden) and the Industrial Union (Industrifacket) affiliated to the Swedish Trade Union Confederation (Landsorganisationen, LO) concluded the first pay agreement in the 2001 round (SE0101177N). The agreement provided for a pay rise over 38 months of 8.45%, including an annual working time reduction of one day, costed at 1.5%.

In February 2001, one week after the previous accords had expired, new agreements were reached in the metalworking sector between Swedish Engineering Industries (Sveriges Verkstadsindustrier, VI) and unions representing all 350,000 of the industry's blue-collar workers, white-collar workers and civil engineers (SE0102182F). There had been some difficulties in the bargaining, especially because the Swedish Union of Technical and Clerical Employees in Industry (Svenska Industritjänstemannaförbundet, SIF) would not accept the employers' compromise demand for a free hand in the allocation of a six-week period of working time per year (SE0102180N). However the mediators succeeded in reconciling VI and SIF. Under the 38-month agreements, blue-collar workers received a 7% pay rise and the other workers 5.5% (with possibilities to obtain more in local negotiations), while all categories received a working time reduction worth an additional 1.5%

In the period from January to May 2001, numerous collective agreements were negotiated and signed in other sectors and for other categories of employees. Among LO affiliates, for example, agreements similar to those in chemicals and metalworking - providing for increases of 8%-8.5% through a combination of wage increases and working time reductions - were concluded for blue-collar workers in the paper and pulp industry, the steel processing industry and the forestry sector, and for electricians.

New agreements were also reached in the various sectors for private sector white-collar workers represented by trade unions affiliated to the Swedish Confederation of Professional Employees (Tjänstemännens Centralorganisation, TCO) and for university graduates represented by affiliates of the Swedish Association of University Graduates (Sveriges Akademikers Centralorganisation,SACO). For example, in the commerce sector, bargaining between the Swedish Federation of Trade (Handelsarbetsgivarna) employers' organisation, the TCO-affiliated Salaried Employees' Union (Handelstjänstemannaförbundet,HTF) and SACO-affiliated Association of Graduate Engineers (Civilingenjörsförbundet, CF) resulted in pay increases of 8.4% over three years.

Some of the more notable or contentious agreements are outlined below.

Commerce

Industrial action was threatened in the retail and wholesale sector, with the risk of strikes closing food shops over the Easter period. The Commercial Employees' Union (Handelsanställdas Förbund, Handels) had given notice of industrial action, after having refused a final offer of a pay increase of about SEK 500 per month on the grounds that it was an "insult" to low-paid women, who make up much of the blue-collar workforce in commerce. According to the chair of Handels, Ninel Jansson, all the new collective agreements concluded in the bargaining round which covered sectors with a majority of male workers had provided for a pay rise of SEK 550 to SEK 600, including the value of working time cuts. The union also rejected the wish of the Swedish Federation of Trade employers' organisation to reduce current "inconvenient working time premia" (OB-tillägg) by 50%.

On 6 April 2001, after a week of intense mediation, the parties accepted a final proposal from the mediators. The new national pay agreement for blue-collar workers in the commerce sector contains special provisions on low-paid female workers in retail and wholesale. Furthermore, current inconvenient working time premia will remain unchanged, with the issue referred to a working group for further consideration, and there will be no changes in the working time arrangements for warehouse workers. The deal provides for a pay rise of 11.2% in over three years. Employees in the sector will also be guaranteed rehabilitation and compensation for lost income if they are victims of robberies in shops.

Construction

The only strike action so far witnessed in the 2001 bargaining round was a two-day stoppage by building workers on 22-24 April. About 4,000 building workers at 242 sites went on strike over the issue of payment by results, a topic which has caused trouble in almost every bargaining round over the past 10 years. The Swedish Building Industries (Sveriges Byggindustrier) employers' organisation want to replace payment by results by other forms of pay, which the Building Workers' Union (Svenska Byggnadsarbetareförbundet, Byggnads) absolutely refuses. The employers had to concede the point again in the 2001 bargaining round, and the new construction agreement retains payment by results and provides for pay increases of 8.5% over three years. Annual working time will be cut by eight hours during the last year of the agreement.

Public sector

In the central government sector, new agreements were reached for all three categories of worker (blue-collar, white-collar and graduates) in mid-April. These deals run for only one year, as the Swedish Agency for Government Employers (Arbetsgivarverket) wanted shorter agreements due to current negotiations over pensions (see below). The agreements for workers represented by TCO and LO unions include pay rises of about 2.5% and an individual minimum guaranteed pay rise of SEK 230, as well as provisions on pay setting at local level. The pay agreement for the university graduates represented by SACO-S is particularly interesting, as it is contains no concrete figures or guarantees on pay Instead, the local parties at the different government authorities will agree on changes in pay considering each authority's particular needs and conditions. Furthermore, there is also a possibility for the local parties to agree that pay should be set directly in talks between management and the individual employee.

At the end of March, the employers' representatives for local authorities, local authority-owned enterprises and city councils signed a pay agreement with Akademiker-Alliansen, a grouping of 19 SACO affiliates representing 45,000 university graduate employees. The open-ended agreement, may be cancelled at any time after 31 March 2005. It provides for no wage increases, except for rises of 2% in 2001 for city council employees, leaving overall wage setting entirely to local agreements. A similar agreement was concluded between the local authorities and the doctors working for the municipalities.

Finally, on 11 May, the Swedish Association of Local Authorities (Kommunförbundet), the Federation of County Councils (Landstingsförbundet) and the Swedish Municipal Workers' Union (Svenska Kommunalarbetareförbundet, Kommunal) accepted a final mediators' proposal for a three-year collective agreement on pay and a new pension agreement. The new agreements apply to 400,000 blue-collar workers employed by the municipalities and city councils, mainly in local healthcare, hospitals and schools. The pay agreement runs from 1 April 2001 to 31 March 2004 and may be cancelled one year before the end of this term, which the trade union looks upon as a favourable provision. The deal provides for pay increases of 3.8% in the first year, 3.7% in the second and 3.5% in the third. There is a guaranteed minimum monthly pay increase of SEK 250 over the whole agreement period. Substitute and part-time workers, as well as those employed on an hourly basis, will be entitled to summer holiday pay and contributions to a collective occupational pension scheme in the same way as workers on full-time, open-ended contracts.

Kommunal states that it is satisfied with what it finally achieved for its members, estimating that it has achieved the best deal in the 2001 bargaining round of any group of blue-collar workers represented by unions affiliated to LO. The two employers' associations have also stated that they are happy with the new deal. While the chairs of the two organisations conceded that the pay increases may seem a little too high, the accept that local authorities and city councils must be able to pay highly enough to recruit and retain workers in vital jobs. Kommunal had rejected the mediators' first proposal at the end of April 2001, but no notices of strike action were issued during the talks.

Commentary

The 2001 spring bargaining round has progressed relatively calmly, on the whole. The pattern set by the 1998 bargaining round has been followed, though with some new features. With industry taking the lead, settlements have provided for average pay increases over 7% over three years, with or without working time reductions worth an additional 1.5% - producing a norm of an 8.5% rise in many national sectoral agreements. One exception is the deal giving municipal workers an increase of 11.4%, but this traditionally low-paid group had earlier been promised a little extra in this pay round. Various commentators among the social partners have stated that the pay increases agreed for 2001-3 present no risk of increasing inflation or fuelling local wage drift. A recent survey carried out by the Swedish Metalworkers' Union (Svenska Metallindustriarbetareförbundet) indicates that wage drift averaged 1% in the engineering industry from 1998 to 2000, and there is no fear that this will be exceeded in the coming three-year period.

For about 1.3 million white-collar workers and university graduates, there remains one more issue to be resolved - the conclusion of new collective occupational pension agreements in all parts of the private and public sectors. Among LO-affiliated union only one such agreement has so far been concluded, in the municipal sector between Kommunal and Kommunförbundet. This provides for a 4% pension contribution for new members and 4.5% for those already in the system. Private sector employers represented by Swedish Enterprise (Svenskt Näringsliv) have offered a contribution of 3.5%. Changes in contribution levels set out in new pension agreements will have to fall within the terms of the latest pay agreements, which may complicate the coming pension negotiations.

A new development, which it will be of interest to follow, is the fact that pay agreements have been reached for some groups of university graduates which do not lay down concrete figures or limits, leaving pay to be set by local negotiations or even by talks between managers and individual employees. This is in line with recent discussions about moving pay setting more to local level, as often advocated by employers in the private sector. However, it is the employers in the public sector that have been the first to persuade the comparatively well-paid university graduates to accept this form of "open" pay agreement. (Annika Berg, Arbetslivsinstitutet)