EMCC European Monitoring Centre on Change

Job security councils

Sweden
Phase: Management
Type:
  • Advice
  • Income support for workers
  • Matching/Networking
  • Start-up support
  • Training
Last modified: 29 June, 2020
Native name:

Trygghetsråden

English name:

Job security councils

Coverage/Eligibility

This measure is available to employees who have been employed for a minimum period  (normally over one year) on a permanent contract, and are facing dismissal.

Main characteristics

The job security councils were established to administer support outlined in the job security agreements. A job security council is a non-profit foundation, which provides support to employees who have lost their job due to collective redundancies. The council helps these employees in their efforts to find new employment. They provide advice and consultation to the employers and trade unions. They also provide transition services and guidance to workers who are made redundant; this includes labour market and training market information, training, business start-up support. In most cases, support activities are initiated by some form of counselling, guidance meetings or advisory seminars, in order to determine the characteristics of and possibilities for the person as well as what oppurtunities and challenges there are. These initial activities are usually followed by further measures in the form of training or education, personal development activities, study or support in starting a new business.

Employees facing redundancy may also receive financial compensation, in addition to general unemployment benefits; this may exceed the so-called A-kassataket - the maximum amount of unemployment benefits to which a person is entitled. This can occur if an employee finds a new job that involves a lower salary than their previous position.

The work of the job security council normally starts before the dismissals take place. The council is a separate legal entity, known as a collective agreement foundation (Kollektivavtalstiftelse). It is made up of a board of representatives from the different partners involved in the collective bargaining agreement, with the seats split equally between the employer representatives and employee representatives. The board has the task of deciding upon the scope and content of the support that is to be granted. The system works like an insurance system and the premiums that are paid by each company vary between sectors and occupational groups (as defined by the trade unions). About 0.3% of the wage bill are paid by each affiliated company. In certain circumstances, local agreements can be drawn up; they provide less comprehensive support but also involve lower payroll contributions – ranging from 0.18 % to 0.3 % for affiliated companies and from 0.7% to 0.58 % for non-affiliated ones. When applying for support, each redundant employee receives financial support ranging between €2,000 and €3,000; this is to cover the costs for job coaching and other supportive measures.

The advisers and consultants working in the job security council have a high degree of freedom in preparing individualised support for each affected employee. The measures provided are flexible and the support activities are  tailored to the needs of each individual, taking into account their qualifications, professional interests and personal preferences and concerns. In some agreements, the support activities last for a maximum of five years, or until the employee has found a new job or chosen to discontinue their relationship with the council. However, support usually is provided for a period of six to eight months.

Funding

  • Companies

Involved actors

Employer or employee organisations
At the central/sectoral level the social partners negotiate the basic agreement. They state the financial terms, activities and organisational support structure and set up a joint board for managing the fund and the jointly owned support organisation.
Other
Administered by independent organisations specifically designed for this purpose, the Trygghetsråd (Job security councils) and Trygghetsstiftelser (Job security foundations); sometimes external consultants are hired.

Effectiveness

Between 1990 and 2009, the Job security foundation, TRR (the most prominent job security council in Sweden) has been involved in approximately 18,500 restructuring projects and has supported more than 10,000 individuals in their new activities or jobs. A total of 74% of these individuals find a new job or other solution, such as proceed to higher education, while 26% remain job seekers. Of those who find a job, 60% become employed within the public sector and 40% find work in the private sector. As of 2015, 9 out of 10 active job seeking clients found a new job or became self employed within seven months following their first contact with the Job security foundation. Among the clients, 8% start own businesses. Out of these 80% remain in business after two years. Moreover, 70% of the clients have an equal or higher salary as the job they were forced to leave. In general, the number of clients has decreased over the past two years, from 12,592 in 2016 to 10,957 clients in 2017. According to Trygghetsrådet (2018), this is due to the current economic boom in Sweden.  

Strengths

The support provided involves the use of a personal adviser or coach, and is adjusted to the individual situation of the affected worker. The scheme is based on a cooperative model between the social partners. In their new jobs, most of the displaced employees receive salary that is either equal to or greater than that which they receive for their previous position. The risk of long term unemployment is reduced by this fast and high quality intervention. Outcomes also include a positive fiscal effect for the state (Trygghetsrådet, 2015).

Weaknesses

In the case of restructuring at Swedish telecom company Ericsson, it was regarded as old fashioned. With the use of old-fashioned methodologies and outdated concepts, here dismissal was regarded as as psychological crisis that should be treated, rather than providing workers with the confidence and skills to take responsibility for their own career development. In addition, it does not cover the newly employed or those employed on a non-permanent basis. Further, subsidy levels are rather low (Diedrich, 2006).

Examples

TRR-Trygghetsrådet
Sources
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