Process industry creates new employer organisation

Four employer organisations in the process industry in Sweden have merged to create one major organisation called Industriarbetsgivarna – Industry Employers. The new organisation combines the Employers’ Association of the Steel and Metal Industry, the Swedish Association of Mines, Mineral and Metal Producers, the Trade and Employers’ Federation of Welding Engineering, and the Swedish Forest Industries Federation. It represents the employers of 82,000 workers.

Background

A new employers’ organisation has been formed in Sweden for the part of the process industry that bases its operations on metal, minerals and lumber.

Previously, process industry employers have been represented by four employer organisations – the Employers’ Association of the Steel and Metal Industry (Stål och Metall Arbetsgivareförbundet), the Swedish Association of Mines, Mineral- and Metal Producers (SveMin), the Trade and Employers’ Federation of Welding Engineering (SVEMEK), and the Swedish Forest Industries Federation (Skogsindustrierna).

Until now, the Swedish Forest Industries Federation, which organises 275 companies in the sector employing 32,000 workers in the pulp, paper and wood mechanical industries, has been completely independent from the other associations. The remaining three organisations already cooperated within a service company, also called Industriarbetsgivarna, providing support on employer-related issues.

However, collective bargaining and wage negotiations were conducted individually by the separate employer organisations. In the case of the mining industry, negotiations were conducted at an even lower level, by the Employers’ Association of Swedish Mine Owners (GAF).

The new Industriarbetsgivarna

The new Industriarbetsgivarna is an employer organisation, and will be conducting all collective bargaining for its member organisations. The member organisations will keep their previous structure and continue working as sectoral representatives, as political monitors, and on public relations. The merger has been discussed for some time and was announced between bargaining rounds to ensure the stability and continuity of industrial relations.

The purpose of forming the new association is to strengthen the employers in the process industry. Common for all members is that they are highly export-oriented and base their operations on raw materials. The hope is that the new association will enable more efficient and competent bargaining.

The process industry competes on the international market and the strengthening of the Swedish currency has significantly affected the competitiveness of the industry in a short time. In a press release on 12 September 2012, Magnus Hall, CEO of Holmen and Vice-Chair at the Swedish Forest Industries Federation, said that collective agreements that promote competitiveness are a crucial prerequisite for companies and jobs.

Minor effects on industrial relations

Union representatives do not believe that this new employer organisation will significantly affect the bargaining process. Kiruna, a town in northernmost Sweden with the world’s largest underground iron ore mine, is one of the main locations of the mining industry. Jan Thelin, Chair of local mining workers’ chapter of the Union of Metalworkers (IF Metall), says in a press report (in Swedish) from the town that there will be no major difference for his members. He says all employers are still ultimately organised within the Confederation of Swedish Enterprise (Svenskt Näringsliv), the single most important federation of businesses in Sweden.

The formation of a major association for the whole industry was welcomed by Jan-Henrik Sandberg, Chair of the Swedish Paper Workers Union (Pappers). He was quoted in a press article (in Swedish) as saying that the new organisation may give the process industry more weight among the national businesses.

Currently, policies dealing with employer issues are formulated mainly by service companies and the engineering industry, which to a large degree are made up of smaller companies. Sandberg argues that heavy industry had not played a leading role in the policies of the Confederation of Swedish Enterprise.

Per Hidesten, Chief Executive of the new Industriarbetsgivarna, quoted in an online newspaper article (in Swedish), said Industriarbetsgivarna will focus on competitive agreements for the companies with the possibility of local negotiations on working time, and a transition from one-year to three-year agreements.

Commentary

The formation of one major association for the process industry may strengthen the position of the industry as a player in the Swedish labour market model. It remains to to be seen in the coming bargaining rounds whether this initiative will change the dynamics of how the industry norm for wages is set.

Emilia Johansson and Hjalmar Eriksson, Oxford Research