Paper workers prefer working time reductions to cash payments

The 1998 collective agreement in the Swedish paper and pulp industry gave workers the opportunity to choose how part of their total remuneration should be allocated, with a choice between paid time off, pension contributions or a cash payment. According to initial results announced in March 1999, workers prefer reductions in working time (38.3%) to cash payments (36.2%) and pension contributions (25.5%).

The collective agreement concluded for the paper and pulp industry in January 1998 by the Employers' Federation of Swedish Forest Industries (Sveriges Skogsindustriförbund, SSIF) and the Swedish Paper Workers' Union (Pappersindustriarbetareförbundet, Pappers), as well as providing for a pay increase, covered the issue of working time (SE9801161F). This topic had proved a stumbling block in the negotiations, reflecting the fact that for some years Swedish trade unions have campaigned for a compensated reduction in general working time, while employers have sought more flexibility in working time to allow for fluctuations in production. The solution found in the paper industry agreement was to provide for two options: either employers and local trade union branches could conclude a local agreement reducing annual working time by 27 hours on a step-by-step basis by 2001; or, if they did not reach such an agreement before the end of September 1998, employers would instead create a personal "working time account" for each worker, into which a certain proportion of the employee's salary would be paid, and which could be withdrawn in the form of paid time off, a pension contribution or a cash payment.

In September 1998, with the parties generally having failed to agree on the first option, the paper employers began providing a personal working time account for each worker in the industry. For each of the three years covered by the 1998 agreement, a proportion of the worker's pay is deposited in the account - 0.5% in 1998, 1.0% in 1999 and 1.5% in 2000. From 1999, the workers can start withdrawing from their accounts in the form of paid holidays, pension contributions or a cash payment - the choice is left to the individual worker.

To take the example of a worker earning SEK 200,000 a year, the three options would be as follows:

  • cash payment - the worker would eventually receive a single payment of SEK 3,000;
  • paid time off - the worker would be credited with 27 hours of paid time off (24 hours for shift workers), with the local employer and employee deciding how and when the time off is taken; and
  • pension contribution - the worker would receive a contribution of SEK 3,000 in the early retirement account, paid by the employer.

Results

The first stage in the process of creating working time accounts in the paper industry has now been completed, and at the end of March 1999 the parties jointly presented the results of the individual choices made by employees. The option of taking paid time off was chosen by 38.3% of workers, while 36.2% opted for a cash payment, and pension contributions were chosen by 25.5%. The results cover almost every worker in the paper and pulp industry - 22,500 plus a further 950 in five workplaces with local agreements on paid time off. Analysis of the results by sex and age shows that:

  • 26.4% of men preferred the pension contribution option, compared with 20.6% of women. By contrast, 43.1% of women chose to take time off, compared with 37.5% of men, while 36% of both men and women chose the cash payment alternative; and
  • 47.5% of the youngest age group, those under 30, opted for cash payments. Paid time off was the most common choice for the other age categories, at 39%. The pension contribution option was the most attractive choice for the middle age group (those between 30 and 45), standing at 28.4% compared with 18.7% in the youngest group and 24.4% in the oldest group.

The social partners do not wish to comment on the choices. A spokesperson for Arbio, the association for the three employers' organisations in the forest and wood industry, including SSIF, stated that the results show that there is a need to take account of different individual needs and that general and rigid models for working time do not fit into modern business life. Sune Ekbåge, the chair of Pappers, said that the union's demand for reductions in working time has much support among its members. Pappers' view is that an increased individual element in collective agreements is on the right lines.

Most of 1998's collective agreements, apart from those for state employees, contain new provisions on both the length and the organisation of working time. Some agreements, for example, provide for an annual reduction of 27 hours (30 minutes a week) to be agreed at company level or between individuals and their employer (SE9806190F).

A working group, led by Inger Segelström, chair of Social Democratic Women in Sweden, was recently commissioned to study and recommend changes in working time. The working group has to complete their work by the beginning of 2000. Two other committees have worked on the issue over the last two decades but neither committee managed to produce a proposal for reducing working time. Social Democratic Women has campaigned for a six-hour paid working day since 1972.

Commentary

There seems to be a mutual understanding emerging between the social partners about small reductions in working time. The employers in general claim a need for flexible working hours and employees are seeking some kind of compensation for working time reductions. One interpretation of the choices made in the paper and pulp industry is that there is a realistic possibility of uniting collective agreements with individual freedom of choice. (Annika Berg, Arbetslivsinstitutet)

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