Collective bargaining in Sweden

In Sweden, social partners bargain free from government influence in both industrial relations and social dialogue. Collective agreements are a cornerstone of the Swedish labour market. While most collective agreements are negotiated at sectoral level, there is an increasing trend towards local-level agreements. The sectoral industry agreement, the Industrial Cooperation and Negotiation Agreement, is a benchmark for wage development in other sectors. It is becoming more common, in particular for white-collar employees, to conclude collective agreements with no stipulated wage increases (National Mediation Office, 2018).

Another feature of the Swedish system is that collective agreements can differ from the law. While the law provides the framework for the agreements, the social partners can negotiate terms that depart from the law, often in favour of employees.

Collective wage bargaining coverage in Sweden is high by international standards: 9 out of 10 employees were covered by a collective wage agreement in 2020. In 2021, according to the National Mediation Office, around 650 collective agreements were in place. While agreements are signed voluntarily, an employee organisation can take industrial action to obtain a collective agreement. Once signed, collective agreements are legally binding.

Collective wage bargaining coverage of employees

Note: n.a., not available.

Sources: Eurofound, European Company Survey 2019 (including private sector companies with establishments with more than 10 employees (NACE codes B–S), the question in the survey was a multiple choice question and multiple responses were possible); Eurostat [earn_ses10_01], [earn_ses14_01], [earn_ses18_01] (including companies with more than 10 employees (NACE codes B–S, excluding O), with a single response for each local unit); Kjellberg, 2019; OECD and AIAS, 2021.

Despite a decline in union membership, collective bargaining coverage remained relatively stable between 2012 and 2021. Collective agreement coverage is higher among blue-collar workers than among white-collar workers; in 2018, an estimated 95% of blue-collar workers and around 85% of white-collar workers were covered. When looking only at the private sector, the difference is even greater (Kjellberg, 2022b).

Collective bargaining coverage of workers aged 16–64 years, national data, 2012–2021 (%)

Note: n.a., not available.

Source: Kjellberg, 2023, Table 3.

The most common level of negotiation is sectoral level. There are normally several sectoral agreements in each sector, often one covering blue-collar workers and another covering white-collar workers. Agreements are also negotiated at company level, but cross-sectoral agreements are uncommon. Sweden’s structure of collective bargaining has become more decentralised in recent decades (Kjellberg, 2009).

Levels of collective bargaining, 2022

Articulation

The content of sectoral agreements normally governs the agreements concluded locally. Employee insurance and pensions are examples of issues often covered at sectoral or even cross-sectoral level, and holidays and work environment issues are mostly negotiated at sectoral level. Wages and working hours are negotiated at sectoral or local level. The sectoral industry agreement, the Industrial Cooperation and Negotiation Agreement, has an intersectoral effect, and is a benchmark for wage development in other sectors.

Collective bargaining rounds tend to take place in the spring. Most agreements last for one to three years. The most recent major bargaining round before 2023 was in 2020, when around 500 out of 700 existing collective agreements were renegotiated. The renegotiations affected around 3 million workers (National Mediation Office, 2021). Collective agreements are usually negotiated to last three years, but due to uncertainty regarding inflation and the economy in general, the collective bargaining agreements negotiated in 2023 were set to last only two years. However, shorter agreements are not extraordinarily uncommon; for example, in 2016, a one-year main agreement was signed.

Wage bargaining is primarily coordinated through two mechanisms. Firstly, the Industrial Cooperation and Negotiation Agreement regulates wage bargaining in Sweden. A percentage pay increase centrally agreed by employer and employee representatives in the industrial sector, which aims to ensure that Sweden remains competitive, sets the standard for pay increases in other sectoral agreements. Secondly, trade union confederations often coordinate bargaining for employees organised in different trade unions covering several sectors.

In Sweden, it is not possible to extend collective agreements by decree or legislation. However, the voluntary extension of collective agreements is rather common. Unorganised employers can sign agreements with trade unions (hängavtal). In 2020, around 108,000 (3.7%) workers in the private sector were covered by a collective agreement under this type of agreement (Kjellberg, 2022b). In addition, employers covered by collective agreements must apply the provisions of the collective agreements to their employees, even if they are not members of the signatory trade union. Consequently, trade union density in Sweden is approximately 70%, while collective bargaining coverage is approximately 90%.

Derogation from collective agreements is possible but is a matter for the contracting parties.

There was a change in Swedish law in April 2010 (known as Lex Laval) stipulating that unions could impose actions in order to instate a Swedish collective agreement only under certain circumstances. Unions could not impose actions if the employer could show that the terms of employment were equal or superior to those in the central sectoral collective agreement. This law was repealed in 2017.

Negotiations start a few months before the collective agreement expires. If an agreement is not reached, a mediator is called in. Once a collective agreement has expired and if no new agreement has been signed, employers and trade unions are allowed to resort to industrial action.

If there is a collective agreement in place, neither employers nor trade unions may use industrial action. This peace obligation is regulated in the Employment (Co-Determination in the Workplace) Act (MBL 1976:580), as well as in all collective agreements. This means that industrial action can only be used once a collective agreement has expired or when there is no agreement in the first place. One exception to this rule is the taking of sympathy action – that is, industrial action taken in order to show support for workers in another sector or occupation. The peace clause was amended in 2019 to specify that all trade unions in the workplace must respect the peace clause regardless of whether or not they accept the collective bargaining agreement.

• Gender equality: Gender equality is addressed in collective bargaining and is considered important by both employer organisations and trade unions.

• Training: Training is becoming an increasingly important part of collective agreements. ’Vocational introductory jobs’ are aimed at young, unemployed people with little or no experience and combine work with training. One agreement, between the Employers’ Organisation for the Swedish Service Sector (Almega) and LO, also concerns introductory jobs for people with disabilities.