Rise in Labour Court verdicts in favour of employees

The number of cases brought before the Swedish Labour Court is on the increase, after a gradual decline since 2008. For a number of years the court had tended to rule in favour of the employer, but this appears to be changing. In the past two years rulings have more often gone in favour of employees, and trade unions and employer organisations agree that the change is due to employers’ increased willingness to take disputes in front of a judge, rather than to settle out of court.

Background

Individual disputes at Swedish workplaces are usually dealt with through bilateral negotiations between social partners, primarily at local company level. A dispute is taken to the Swedish Labour Court (Arbetsdomstolen) or a district court (Tingsrätten) only if local and central attempts to find a solution fail.

Since 2008, the number of lawsuits dealt with by the Swedish Labour Court had been gradually declining. However, in 2012 the trend was reversed when 237 cases went directly to the court – an increase of 12% compared with 2011.

Over the past ten years, employers have won twice as many cases as employees. In 2011 and 2012, however, the court ruled in favour of the workers in the majority of cases.

Social partners agree

Most labour dispute cases are taken to court by trade unions. However, union leaders have argued that the recent reversal in the trend of which side wins has been due to employers’ increased eagerness to take labour disputes before a judge, rather than to settle out of court.

Dan Holke, Senior Legal Advisor at the Legal Bureau of the Swedish Trade Union Confederation (LO-TCO Rättsskydd), said in a news article (in Swedish) that employers were starting to question issues that had previously been undisputed, such as regulations in collective agreements. Employers were not as quick to reach a settlement as they had been and wanted to test established arrangements and agreements in court.

The employers’ organisations agree. Swedish service sector organisation Almega was involved in many of the cases taken to court. Its President, Jonas Milton, said in a news article (in Swedish) that employees might be winning more cases because the conflict resolution system, supposed to prevent disputes from going to court, was not working properly. Many companies, he said, no longer had membership of an employer’s organisation.

Milton, quoted in another newspaper interview (in Swedish), said that companies were hiring law firms rather than solving disputes via employers’ organisations. He claimed law firms had economic incentives to take disputes to court because they viewed them as business opportunities. Many cases that could have been solved at a local level were now going in front of a judge.

The court cases

Of the 237 cases that went before the Labour Court during 2012, 201 were brought by trade unions. The white-collar trade union Unionen brought 44 actions during 2012, the most brought by one union. In a newspaper article (in Swedish), Unionen said the increase was due to its rising membership. It added that many of its members worked for companies that did not have collective agreements or a clear set of rules. This led to more uncertainty and further disputes.

The most common disputes concerned employment protection legislation or the dismissal of single members. Only 17 cases were brought by employer organisations.

Commentary

The state, as well as social partners, is keen that efforts are made to resolve labour disputes through negotiations and settlements. Going to court is seen as a last resort. It is much too soon to say whether the increased amount of cases going to the Labour Court, and the rise in verdicts in favour of the employees, represents an unwelcome change. It is, however, worth noting that the social partners agree on the cause of the change – employers’ increased willingness to take labour disputes to court rather than arriving at a settlement beforehand.

Emilia Johansson and Malena Heed, Oxford Research

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