Industrial relations

Sweden: Latest developments in working life Q4 2019

The ongoing bargaining round and the process of reforming the Employment Protection Act are the main topics of interest in this article. This country update reports on the latest developments in working life in Sweden in the fourth quarter of 2019.

Bargaining round coordination fails among blue-collar unions

In November 2019, the trade unions and employer organisations in the manufacturing sector exchanged demands, thus officially commencing the bargaining round. The negotiations are expected to result in a new collective agreement in early 2020.

The manufacturing sector is always the first to enter collective bargaining and sets the wage norm for other sectors. By having a centrally agreed percentage pay increase, Sweden aims to remain internationally competitive.

In this bargaining round, the trade unions are demanding a 3% wage increase, provisions for part-time and flexible pensions, measures to prevent work-related injuries and better rehabilitation, as well as measures to enhance gender equality. The employers, on the other hand, point to an economy that is cooling down and hence state that the unions’ demands are unrealistic.

The trade union confederations usually coordinate bargaining for employees who are represented by different trade unions covering several sectors. However, in October two trade unions announced that they would not align their demands with that of the other unions affiliated to the Swedish Trade Union Confederation (LO). One of the unions, the Municipal Workers’ Union (Kommunal), which covers almost 40% of all LO members, left the wage coordination on the ground that that this would result in unacceptably low real wage increases for its members. [1] The Swedish Paper Workers’ Union also left the coordination, stating that with Kommunal not taking part there would be no real coordination. [2] The wage coordination last broke down in 2016. Before that, however, coordination had been successful since as far back as the 1980s.

Trade unions split over employment protection reform

In the last months of 2019, Kommunal not only left the LO wage coordination, but also the negotiations on the reform of the Employment Protection Act, together with four other unions. [3] The reason for this was two-fold: first, they felt that they had not been properly included or informed in all negotiation proceedings; and second, they did not agree to allow employers to dismiss an employee without having to provide a just cause, a point on which they thought LO seemed to be willing to compromise. At the time of writing, eight trade unions are continuing the negotiations with the Confederation of Swedish Enterprise and the Swedish Council for Negotiation and Cooperation (PTK). A government-appointed inquiry is set to present a proposal for new legislation in May 2020, which means the social partners will only have a few months to reach an agreement.

Commentary

This bargaining round concerns the wages of around three million employees. As long as there are collective agreements in place, then no party can call for industrial action. But if the parties fail to reach an agreement, there is a risk of strikes and lockouts in the first and second quarters of 2020.


Footnotes

  1. ^ Kommunal (2019), Kommunal ställer sig utanför LO-samordning i avtalsrörelsen , 22 October.
  2. ^ Dagens Arbete (2019), Pappers lämnar LO-samordningen , 23 October.
  3. ^ Eurofound (2019), Sweden: Latest developments in working life Q3 2019 .

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