New pay agreements reached in ICT sector
In December 2002, employers and trade unions in the Swedish information and communications technology (ICT) sector signed new pay agreements, running until March 2004. Pay setting is left to local bargaining, but minimum paybill increases of 2.6%-28% apply if no agreement can be reached at this level. Some employers had earlier called for pay freezes or cuts, in the light of the problems facing the ICT sector.
New pay agreements for the Swedish information and communications technology (ICT) sector were concluded on 3 December 2002. The negotiations, which started earlier in the autumn, were followed with great interest as the employers had announced publicly that their first offer to the trade unions was a zero wage increase (SE0211105F). Throughout 2002, there had been a discussion among ICT companies about even lowering current wages, as the economic situation in the sector is so poor (SE0202107F).
The new pay agreements, which cover a total of 70,000 employees in the ICT sector, were concluded by ALMEGA - the Employers' Association of the IT Trade and Industry (ALMEGA IT-företagens Arbetsgivarorganisation) and five trade unions - the Swedish Union of Technical and Clerical Industry Employees (Svenska Industritjänstemannaförbundet, SIF), the Association of Graduate Engineers (Civilingenjörsförbundet, CF), the Swedish Association of Graduates in Law, Business Administration and Economics, Computer and Systems Science, Personal Management and Social Science (Jusek), the Union of Service and Communication (Seko), and the Swedish Association of Graduates in Business, Administration and Economics (Civilekonomerna). Seko is an affiliate of the blue-collar Swedish Confederation of Trade Unions (Landsorganisationen, LO). SIF is the largest affiliate of the white-collar Swedish Confederation of Professional Employees (Tjänstemännens Centralorganisation, TCO). The other three unions belong to the Swedish Confederation of Professional Associations (Sveriges Akademikers Centralorganisation, SACO).
Local pay setting
The two pay agreements - the IT agreement (IT-avtalet) and the telecoms agreement (Telekom-avtalet) - are based on a system whereby local pay setting takes place in the individual companies, with the wage determined in talks between management and the local trade unions. In the event of failure to agree at this level, there is a fall-back 'scaffold' provision whereby the paybill must be increased by at least 2.6% under the IT agreement and 2.8% under the telecoms agreement. The pay agreements run from 1 January 2003 to 31 March 2004, when a majority of the current three-year pay agreements in industry and other sectors expire and the next major bargaining round occurs (SE0105102F).
The parties to the ICT settlements agree that the wage setting process has to be linked to the overall goals and economic and market situation of the individual company. This formulation was possibly included in the agreements because of the current problems in the sector.
Working time and cooperation
The telecoms agreement continues the process of working time cuts in this branch, reducing annual working time by one more day in 2003, which brings the total cut to six days since the process started in 1998. Under their new agreement, IT companies have the same possibility to negotiate a working time cut at local level.
The parties have agreed to work together to draw up cooperation agreements for both the IT and telecoms branches, in line with the 1997 agreement on cooperation and bargaining procedures for the whole industry sector (SE9703110N). This deal was followed by similar agreements in many other sectors (SE0203105F), including the central government and municipality/city council sectors (SE0006146N). The main goal of these procedural agreements is to supervise pay negotiations and ensure that no conflict situations occur. In industry, this work is carried out by mediators appointed by a special Industry Committee.
The negotiations between the social partners were difficult because of the problems facing the ICT sector. Göran Hamrin, who led the negotiations for the three SACO-affiliated unions for professional workers, was, however, quite satisfied with the result, stating that: 'The pay agreements will help us to establish a positive wage development even if the times are unstable'. He added: 'Hopefully, the situation for the IT and telecoms business will improve next year. Earlier experience shows that local pay agreements result in favourable pay in favourable situations. If the current problems of the ICT business continue the scaffolds guarantee a certain pay rise. The earlier pay agreements for professional workers in the ICT sector did not contain any figures in % or kronor. The efforts from some employers to decrease pay in IT companies have forced us to abandon, in this bargaining round, the principle of blank agreements.'
Representatives of the white-collar SIF union stated that they had hesitated to sign the new agreement. The reason was not the pay rise but the total divergence on work environment issues between them and the employers. SIF's chief negotiator, Thord Wedin, stated that 'our sector is very much exposed to stress and burn-out symptoms.' SIF demanded, for example, stronger rules on overtime pay. At present, many white-collar workers and professionals in ICT have no overtime pay regulated in their employment contracts. This issue has not, however, been dealt with in the new pay agreements.
Göran Trogen, the managing director of the ALMEGA employers' association, stated that the main orientation in the forthcoming local pay talks should still be individualised pay for all employees. It is only if the local trade unions and the employers cannot agree about the individual pay rises that the companies should use the minimum pay increase set out in the agreements' 'scaffolds'.
The new pay agreements in the Swedish ICT sector and the surrounding discussion about pay setting should be seen in the light of the last two years' deep financial problems for ICT companies. At the beginning of 2002, several companies announced that they would like to freeze or even cut their employees' pay, as they were so deep in economic trouble. At the beginning of the sectoral pay negotiations in the autumn, a zero pay increase was again mentioned, though now that the deal has been concluded this appears to have been 'sabre-rattling'.
As has recently been reported, wage decreases in Sweden are rare. During the economic bad times in the 1990s, only 1% of employees experienced a cut in their regular nominal pay (SE0211105F). In the private sector, the coverage of collective agreements is about 80%. The trade unions in the ICT sector are traditionally very strong, and would hardly have accepted zero increases or pay cuts. An employer would have to be well equipped with arguments in order to convince the unions to swallow such a development. Another possibility is that a future economic improvement in the ICT sector may be envisaged by the employers. (Annika Berg, Arbetslivsinstitutet)