Ericsson provides extra parental leave pay

The Swedish telecommunications company Ericsson has concluded an agreement with three trade unions, providing for better pay for parents who want to stay at home to look after their children under the provisions of the Parental Leave Act. The agreement comes at a time when the Equal Opportunities Ombudsman has, in August 1999, called for reinforced rights for parents at work.

During 1999, seven companies in the Ericsson telecommunications group became covered by an agreement concluded by the parent company with the Union for Technical and Clerical Employees in Industry (Svenska Industritjänstemannaförbundet, SIF), the Association of Graduated Engineers (Sveriges Civilingenjörsförbund, CF) and the Association of Managerial Staff (Ledarna). The agreement contains provisions on six months of extra parental leave pay for employees who stay at home with a new baby or a small child.

According to the Swedish Parental Leave Act (föräldraledighetslagen, SFS 1995:584) there are five types of parental leave for care of children (TN9801201S):

  1. full leave for a female employee in connection with her child's birth and for breast feeding (maternity leave);
  2. full leave for a parent until the child has reached the age of 18 months, with or without full parental leave benefit;
  3. partial leave with parental leave benefit;
  4. partial leave for a parent in the form of a reduction of normal working time by one quarter until the child reaches eight years of age; and
  5. leave for temporary care of a child.

When a parent stays at home, private sector employers normally pay no wages. The parent is compensated by benefits from the national insurance system, but only amounting to 80% of his or her income up to a monthly maximum of SEK 22,750. The maximum amount of benefit is thus SEK 18,200 per month, whatever the income of the employees concerned.

The Ericsson agreement

The Ericsson agreement provides that employees taking parental leave and earning more than SEK 22,750 per month will receive from the employer 80% of their salary above this ceiling, up to a negotiated limit of SEK 45,500 per month. Parents may receive this top-up to the parental leave benefit for 180 days in the period up until the child is one and a half years old. The period of leave has to be continuous and cannot be divided into shorter blocks.

When asked about the true aim of the agreement, Mats Andersson, director of industrial relations at Ericsson and one of the initiators of the agreement, stated that "it is essential to compete with other companies in order to attract qualified workers, who are in great demand in the labour market." "However, it is good for fathers to stay at home with their children, and the management supports that," he added. This remark about fathers reflects the fact that in practice more men tend to earn more money than women at Ericsson, with the result that the agreement is especially favourable for male employees. However, it is an agreement which applies to both men and women.

"In the private sector there are few examples of similar agreements," according to Inger Grufman, an official at the CF union responsible for gender equality issues. The oil company Statoil has an agreement similar to the Ericsson deal, but providing for only 75% of pay above the ceiling. The Folksam insurance company, closely linked to the two biggest trade union confederations, concluded an agreement three years ago giving parents who stay at home for at least three months, one and a half months of extra pay. "However, the government sector has the most generous rules," Ms Grufman points out. "The employees in this sector receive in total 90% of their salary, regardless of how much they earn, when on parental leave," she says. Furthermore, when former governmental authorities like Vattenfall and Telia became state-owned companies at the beginning of the 1990s, their employees retained their existing additional parental leave pay rights.

An equality issue

The Equal Opportunities Ombudsman (Jämställdhetsombudsmannen, JämO), who is charged with the duty of ensuring compliance with the provisions of the Equal Opportunities Act, conducted a survey about parenthood and working life (100/99:81) among 68 sectoral trade unions in spring 1999. The survey received 81 responses, about half from the national unions and half from unions at local level. The results of the survey showed that many union members have problems reconciling work and parental responsibilities. The most common kind of negotiations conducted by trade unions in this area relate to employers' unwillingness to adapt working hours for parents with small children. The second most common issue for negotiations relates to situations where workers are affected negatively in pay setting after parental leave or where their other employment conditions becoming worse because of pregnancy or a demand for parental leave.

The survey also shows, according to JämO, that negotiations conducted by unions over this type of issue often remain at the local level, and that general advice is requested by members more often than negotiations. Members dare not make use of their legal rights for fear of losing their jobs, JämO concluded in a recent newsletter. In her annual official letter to the government, sent on 24 August 1999, JämO wrote, referring to the survey, that it is urgent that the rights of parents on the labour market should be made stronger. JämO suggests that the Act on Parental Leave should be reinforced by new rules making it harder for employers to dismiss pregnant women and parents wanting to use their legal rights to leave, or to make their job situation worse in other ways.

Smaller wage rise during leave

A case has recently been brought in the Labour Court (Arbetsdomstolen) against the University College of Skövde, southern Sweden, concerning a university teacher who received a smaller wage rise than his colleagues while he was taking parental leave. The Court will put to the test, for the first time, if an employer could be justified in letting an employee receive a comparatively small wage rise while at home taking care of children. The employee is represented in the case by the Graduate Engineers' Union.

Sweden's state parental leave scheme was introduced in 1974 in order to promote greater equality between men and women in the home, at work and in society. However, women have consistently used parental leave to a far greater extent than men have done. According to figures from the National Insurance Board (Riksförsäkringsverket) ("Social insurance in Sweden 1999") in 1997, around 300,000 women (69% of all benefit recipients) and 135,000 men (31%) were paid parental leave benefits. Two-thirds of these parents were younger than 35 years of age. On average, men took far fewer days of leave than women: women accounted for some 90% of all leave days with parental benefit taken during 1997, while the men accounted for a little less than 10%.

Commentary

As stated above, after some 20 years of legislation on parental leave in Sweden, it still mainly means working mothers staying at home with small children. Furthermore, with a relatively low ceiling for the parental leave benefit paid by the national insurance system, parents with a higher income may not be "tempted" to take leave, as they lose a considerable amount of money when they do so. Agreements like that at Ericsson, which is "by nature" a gender equality agreement, along with employers' concerns about competing for staff, may make workplaces more attractive for young people in the future. No doubt other private companies may follow Ericsson's example (Annika Berg, Arbetslivsinstitutet).

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