Temporary layoffs are a new feature in Swedish industrial relations. Trade unions differ in their opinions about the success of such agreements. Some trade unions and employer organisations argue that they have saved thousands of jobs during the economic crisis, while some unions claim that the agreements – which are supposed to reduce both working time and wages – are only cutting pay. Employers organisations are now seeking to prolong the agreements.
Trade union views on temporary layoff agreements
The Union of Metalworkers (IF Metall) estimates that the agreement on temporary layoffs has saved 1,200 jobs, based on a survey conducted among the 60,000 members who work in companies which have signed the agreement. According to the agreement – which is a new feature in Swedish industrial relations, introduced in an effort to alleviate the current economic crisis – wages could be reduced by a maximum of 20% and working hours by 20% until 31 March 2010 (SE0903019I). On average, wages were reduced by 12% and working hours by 17% (Dagens Arbete, ‘Krisavtalet räddade 12 000 jobb’, 2 December 2009). IF Metall emphasises that temporary agreements were a solution when the industry was in severe crisis but that the situation has now improved.
The trade union for professionals in the private sector, Unionen, has been critical of the temporary layoff agreements at national level and considers the strategy as a short-term solution (SE0904029I). Local temporary layoff agreements can however take place within the framework of the existing collective agreement. According to a Unionen survey, 138 local trade unions agreed to temporary layoffs, affecting 14,000 employees, and the unions remain largely unconvinced as to whether the agreements really did maintain job opportunities. The Unionen survey indicates that many trade unions felt obliged to sign the agreements because of management threats of redundancy or company closure. The Head of collective bargaining at Unionen, Niklas Hjert, concludes that the survey demonstrates that employers have taken the opportunity to lower employment conditions regarding pension, unemployment, parental and sickness benefits (Unionen, ‘Inga garantier att jobb räddas genom krisavtal’, 30 November 2009).
According to a survey of the Swedish Association of Graduate Engineers (Sveriges Ingenjörer), 40% of those who agreed to temporary layoffs still work full time. Thus, in practice, the agreements have only resulted in a reduction of wages. The association’s Head of collective bargaining, Camilla Frankelius, states that the shortage of work for engineers is not as bad as employers indicate and that the trade union will not agree to similar agreements in the future (Sveriges Ingenjörer, ‘Ingenjörer jobber gratis i företag med krisavtal’, 26 November 2009).
Views of employer organisations
The employer organisations consider the agreements on temporary layoffs to be a successful measure to maintain jobs during the current economic crisis. The Confederation of Swedish Enterprise (Svenskt Näringsliv) reports that up to 500 businesses in industry had signed local agreements on temporary layoffs by the middle of 2009, that redundancies have been avoided in nine out of 10 companies and that up to 20,000 employees have maintained their jobs. Furthermore, the employer organisation highlights the importance of such flexibility in national-level agreements, to facilitate local agreements (Svenskt Näringsliv, ‘Ansvarsfulla parter krävs för att rädda jobben’, 15 September 2009).
The Association of Swedish Engineering Industries (Teknikföretagen) wants to make the option of temporary layoffs permanent at local level. The association’s Head of collective bargaining, Anders Weihe, argues that the economic situation is still critical for industry and that many companies must prolong the agreements on temporary layoffs to prevent a worst-case scenario, which would put 10,000 jobs at risk. The commercial vehicle manufacturer Scania is the only company that has so far negotiated an extension of the temporary agreement, but Mr Weihe argues that a considerable proportion of companies want to prolong the agreement beyond 31 March 2010 (LO-tidningen, ‘Scania kräver förlängt krisavtal’, 13 November 2009).
Outcome of negotiations at Scania
Scania was one of the companies where the agreement on temporary layoffs resulted in four days of work and one day off for the company’s employees, while wages decreased by 10%, between 1 June and 31 December 2009 (SE0906019I). IF Metall and the Association of Swedish Engineering Industries negotiated for weeks on prolonging the temporary agreement. The settlement was a reduction in working time, but with full wages. In order to finance the measure, the company has withdrawn bonus systems until March 2010, and has postponed part of the holiday pay which is above the minimum level in the central agreement. The agreement is valid during the first six months of 2010 and, during that time, Scania undertakes not to give notice to employees.
Commentary
The question of agreements on temporary layoffs is likely to be a central part of the collective bargaining round, which is expected to result in collective agreements for 3.3 million employees over three years by 31 March 2010.
Further references
Industrinyheter.se, ‘Scania kräver förlängt avtal’, 16 November 2009.
LO-tidningen, ‘Fortsatt fyradagarsvecka på Scania’, 12 December 2009.
Svenskt Näringsliv, ‘LO på villovägar’, 6 July 2009.
Swedish Television (Sveriges Television, SVT), ‘Räddar krisavtalen jobb?’, 27 November 2009.
Mats Kullander and Jenny Norlin, Oxford Research