Deadlock in negotiations in paper and electrical industries

Lengthy negotiations between social partners in the paper and electrical industries reached a deadlock after trade union representatives dismissed a bid to implement the norm-setting agreement signed by other industries. The trade unions argue that the agreement will reduce workers’ real wages and have therefore launched several industrial actions to put increasing pressure on the employers’ side.

Background

In Sweden, sectoral collective agreements are negotiated to determine wage levels and working conditions at local level. Currently, the country is at the end of an intense bargaining round, where 550 of the 600 Swedish collective agreements are being renegotiated, covering 3.3 million employees (SE1003019I). In 1997, 12 employer organisations and six trade unions signed the Cooperation Agreement on Industrial Development and Wage Formation (Industrial Agreement, Industriavtalet), which concerns about 600,000 employees. The agreement was initiated by social partners after pressure from the government to create a more united platform for negotiations. The previous round of negotiations, concluded in 1995, had been characterised by fragmentation and higher than average wage increases in a European context. The Industrial Agreement has, since its implementation, restored order and unity within industrial negotiations and pay increases have been more in line with the European average. This has resulted in moderate and real wage increases.

The country’s electricians, represented by the Swedish Electricians’ Union (Elektrikerförbundet), negotiate their own agreement with the employer representative the Swedish Electric Contractors’Association (Elektriska Installatörsorganisationen, EIO).

Trade unions reject norm-setting agreement

The sectoral negotiations have resulted in agreements for all sectors covered by the Industrial Agreement, except for the Swedish paper industry represented by the Swedish Paper Workers’ Union (Svenska Pappersindustriarbetareförbundet, Pappers) and the Swedish Forest Industries Federation (Skogsindustrierna). By dismissing the proposed norm-setting agreement on 11 April 2010, Pappers has reminded its counterparts that the trade union is not obliged to follow the norm-setting agreements signed by the rest of the manufacturing industry. The agreement included a 3.2% wage increase over the next 22 months and was accepted by the employers’ side. By dismissing the bid, the trade union representatives made a statement that the wage increases were insufficient and that they would lead to future decreases in real wages.

At the same time, the developments in negotiations between the parties in the electrical industry looked set to take a similar route. The trade union representative dismissed the proposed 3.2% pay increase over the next 22 months for the same reasons as those put forward by the paper industry.

Strike action intensifies

Both Pappers and the Electricians’ Union have since initiated several strike actions in an effort to increase pressure on the employers’ side. On 12 April, Pappers implemented an overtime ban, which was followed by a similar ban by the electricians on 16 April. The announced strike covering 3,000 employees at six major paper factories was also initiated on 16 April, with an estimated daily cost of SEK 50 million (about €5.1 million as at 9 May 2010) as a result of the halt in production. The strike in the paper industry is the first to take place in the manufacturing industry since the signing of the Industrial Agreement in 1997. Additional strikes in six more paper factories were to be initiated on 26 April if the partners did not manage to sign an agreement.

Meanwhile, the Electricians’ Union implemented another overtime ban on 19 April, affecting several hydroelectric and nuclear power plants. The ban has so far caused production stops at three hydroelectric power plants and a strike at the goods reception of one of the nuclear power plants. The stations will not be repaired until an agreement is signed. This situation has sparked concerns about sustained decreases in power production and rising prices. The trade unions also announced that further protests would take place on 3 May if a suitable agreement was not signed.

Commentary

The trade unions have shown resilience in their demands, but so have the employer representatives. The next step in the negotiations was a meeting on 21 April, at which the parties were due to discuss future developments. The trade unions argue that their industries are not struggling as much as the other norm-setting sectors within manufacturing and that they should therefore receive higher pay increases and better conditions. The employers, on the other hand, contend that the trade unions, by not accepting the norm-setting agreement, have stepped outside the boundaries stipulated by the Industrial Agreement – therefore, they argue that the unions are threatening to destroy the unity that has previously been the signature of the negotiations within the industrial accord.

References

Axelsson, C., ‘Drama i flera akter’, Svenska Dagbladet, 10 April 2010.

Axelsson, C., ‘Varför blev det nej från Pappers?’, Svenska Dagbladet, 11 April 2010.

Gunér, F., ‘Nya stridsåtgärder träder i kraft’, Dagens Nyheter, 19 April 2010.

Industrikommitén, ‘Industriavtalets Historia’, Industrikommitten, April 2010.

Sandgren, T., ‘Elektriker varslar om utökade stridsåtgärder’, Swedish Electricians’ Union, 20 April 2010.

Stockholm TT, ‘Tufft läge i pappers- och elkonflikt’, Svenska Dagbladet, 17 April 2010.

Stockholm TT, ‘Nya stridsåtgärder träder i kraft’, Svenska Dagbladet, 18 April 2010.

Stockholm TT, ‘Nytt strejkvarsel oroar arbetsgivare’, Svenska Dagbladet, 21 April 2010.

Widerberg, G., ‘Rungande nej från Pappers’, Dagens Arbete, 11 April 2010.

Mats Kullander and Oskar Eklund, Oxford Research

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