Two-year pay agreement reached for municipal workers after strike

On 28 May 2003, the Swedish Municipal Workers' Union (Kommunal) and employers' organisations finally reached a new pay agreement for 420,000 blue-collar workers in the municipal and city council sector. The deal followed five weeks of industrial action involving around 110,000 municipal workers. The agreement provides for a rise in the lowest pay rates and average increases, to be distributed in local bargaining, of 3.95% in 2003 and 2.45% in 2004. Workers in areas such as nursing, healthcare and childcare will receive a larger share of these overall sums.

The major industrial dispute over a new collective agreement for blue-collar workers in the municipal and city council sector (SE0305101N) was due to escalate in the first week of June 2003. Some 47,000 members of the Municipal Workers' Union (Svenska Kommunalarbetareförbundet, Kommunal) were already on indefinite strike across the country since the previous week and the union gave notice of a further strike from 4 June by 18,000 bus drivers in Sweden's three largest cities. Stockholm, Göteborg and Malmö, plus 137 municipalities (out of 290), were thus due to be hard hit by industrial action. The Union of Service and Communication (Facket för Service och Kommunikation, Seko) had also given notice of a sympathy strike by all 400 train drivers on commuter services in the three cities, adding to the expected traffic chaos.

However, on 28 May 2003, Kommunal - affiliated to the blue-collar Swedish Confederation of Trade Unions (Landsorganisationen, LO) - finally reached an agreement for its 420,000 members in the municipality and city council sectors with the employers' organisations - the Swedish Association of Local Authorities (Kommunförbundet) and the Federation of Country Councils (Landstingsförbundet).

The new pay agreement

The new pay agreement runs for two years until 31 March 2005. The pay for the lowest-paid workers, a vital issue for Kommunal, is to be raised in two stages for all workers aged 19 or over. The lowest pay rate will be raised to SEK 13,000 per month from October 2003. From 1 April 2004, the lowest rate will be raised to SEK 14,000 per month for workers in hospitals and daycare centres with an upper-secondary school education and one year's service.

As well as these minimum guarantees, actual pay increases for all workers with be set by local collective agreements. In 2003, there will be an overall 3.95% wage increase (or 'wage space') to be distributed in the local negotiations, while in 2004 the total sum for local bargaining will be at least 2.45%. Local agreements on 'first entry' pay rates for various occupations may also be negotiated.

The agreement provides for the overall sum available for wage increases to be divided unequally between various groups of workers. In 2004, within an overall increase of 3.95%, a 'prioritised' group of employees in nursing, healthcare and care of disabled and elderly people will share out an increase of 5% of paybill, while the rest of the employees will share an increase of at least 2.6%. In 2004, within an overall increase of 2.45%, personnel in daycare centres and similar institutions for children will receive a 5% increase while the rest of the workers will share a 2% increase in paybill. The priority groups encompass 80% of female Kommunal workers working in the municipalities and 73% in the city council sector.

Low pay

The increase in the lowest pay rates is important for all Kommunal members, commented Ylva Thörn, the union's chair, when the new agreement was announced. The increase in the wage level for the lowest-paid workers will also have a long-term effect. The employers stated that for them it was important to show a clear priority for workers in nursing and healthcare. Another important consequence is that the agreement is an investment in female-dominated occupations, commented Åke Hillman, chair of the bargaining delegation for the municipal employers.

The previous pay agreement for blue-collar workers in the municipal and city council sector (SE0105102F) was due to run for three years, until the end of March 2004. However, in October 2002, Kommunal took up the option, provided for in the agreement, of cancelling the accord one year before it expired (ie at the end of March 2003 rather than March 2004) (SE0211103N). The old agreement would have given an average 3.5% pay increase in 2003, while the new deal provides for a 3.95% average rise.

The reason for cancelling the previous agreement was deep discontent among Kommunal members with the outcomes of local pay bargaining. When compared with the results achieved by other groups in the municipal and city council sector, such as doctors and nurses, the outcomes for Kommunal members were perceived as poor. Kommunal members have long been a low wage group, never being able to achieve more than a 'normal' pay increase, while other groups of workers have often exceeded this rise. The average monthly pay for a blue-collar municipal worker (eg an assistant nurse) stood at about SEK 16,000 in 2002, while white-collar workers (eg nurses) were paid an average of SEK 20,000 and professionals (eg doctors) SEK 24,000. The white-collar and professional employees all received a monthly pay rise of around 5%-6% in 2001, while Kommunal's pay agreement provided its members with no more than 3.5%.

Bargaining and strikes

The demands that Kommunal presented in January 2003 were for a general pay increase of 5.5% in 2003 and a guaranteed minimum wage of SEK 14,000 per month for all members. The employers said that they were willing to award a 4.2% pay increase to Kommunal members in healthcare and 2.4% to the remainder. The two sides acknowledged that their positions were a long way apart and mediators were called in to lead the negotiations. Both sides turned down the first proposal from the mediators at the end of March 2003. The second and final mediation proposal, issued on 7 April 2003, which provided for a 5% increase in 2003 for healthcare workers and 2.4% for the rest, was also rejected. Kommunal stated that it must pay attention to all its members and not favour one group, even if this group is low-paid. The employers stated that they had agreed to Kommunal's demand to strengthen the wage position of low-paid workers. However, there were no financial resources to increase pay for other groups.

In early April 2003, Kommunal issued its first notice of strikes and other industrial action. From 23 to 29 April, a total of 66,000 Kommunal members went on strike, mainly in the healthcare sector but also in areas such as municipal childcare centres. Between 12 and 18 May, another 46,000 workers in other municipalities started to strike, this time with no time limits for the action. As mentioned above, Kommunal also gave notice of a strike by 18,000 bus drivers in Stockholm, Göteborg and Malmö from 4 June, while Seko announced sympathy action by commuter train drivers in these cities. However, all the strike actions stopped following the announcement of the new agreement on 28 May.

A total of about 110,000 Kommunal members went on strike during April and May 2003, and another 20,000 were due to do so in June.

Sympathy action

Just before the end of the industrial action, two other LO-affiliated trade unions took sympathy action, either openly or in a disguised way. In mid-May, the Swedish Electricians' Union (Svenska Elektrikerförbundet, SEF) gave notice of industrial action by 3,000 electricians employed by municipal and city councils, involving strikes and overtime bans. The action was not expressed as a sympathy action but was however related to the Kommunal members' conflict. SEF announced that its members' action would stop as soon as all the primary action called by Kommunal ended. However, matters were rather more complicated as SEF was also in negotiations over pay and conditions.

The second trade union to take to a sympathy action was the white-collar National Union of Swedish Local Government Officers (Svenska Kommunaltjänstemannaförbundet, SKTF). SKTF launched sympathy action from 13 May in the form of individual strikes to prevent its members from being ordered by employers to carry out work tasks normally performed by striking Kommunal members. Kommunal had asked SKTF to provide such support.

Sympathy action of this type is relatively common (and legal) during Swedish labour disputes (SE0302102F). A third union to show its sympathy through a willingness to take action was Seko, organising train drivers (see above). Furthermore, the syndicalist Central Organisation of Swedish Workers (Sveriges Arbetares Centralorganisation, SAC) gave notice of a strike by its members in local transport.

Other reactions

During the dispute, some other LO member unions announced their support for Kommunal's demands and strike action - notably the Swedish Building Workers' Union (Svenska Byggnadsarbetareförbundet, Byggnads), the Graphical and Media Workers' Union (Grafiska Fackförbundet Mediafacket) and the Swedish Transport Workers' Union (Svenska Transportarbetareförbundet). However, three LO unions were more critical of Kommunal's actions - the Swedish Metalworkers' Trade Union (Svenska Metallindustriarbetareförbundet, Metall), the Swedish Paper and Pulp Workers' Trade Union (Svenska Pappersarbetareförbundet, Pappers) and the Swedish Industry Workers' Union (Industrifacket). LO announced from the beginning that it morally supported the strike action. However, the chair of LO, Wanja Lundby Wedin, also expressed a fear that a union split might be a future result of the conflict.

The employers in the municipal and city council sectors kept a relatively low profile during the dispute. They did not respond with industrial action of their own, a fact interpreted in some quarters as intended to show they could not afford a lock-out (many municipalities are facing financial difficulties). According to calculations made by the media at the end of the conflict (and not denied by the parties) the two employers' organisations saved about SEK 500 million in unpaid wages, while Kommunal spent some SEK 300 millions in strike pay.

The government also kept a low profile during the conflict, in line with the traditional policy of non-interference. However it repeated its earlier expressed opinion that it was appropriate for low-wage groups to fight for better pay. When some elected municipal council members behaved 'badly' during the conflict by opening schools and football grounds normally attended to by porters who were on strike, there was no comment from the government. The trade unions were furious, but lawyers expressed the view that this was not strike-breaking as the municipal councils and thus their members were regarded as employers and their actions were thus legal.

Commentary

Kommunal appears satisfied that the five-week conflict resulted in raising the pay level for the generally low-paid, and mostly female, workers in health and nursing care institutions run by municipalities and city councils, even if a similar result could not be achieved for all its members. Reactions from Kommunal members all over the country indicate disappointment with this latter aspect, and the local bargaining may turn out to be difficult in some places.

The employers are satisfied too, as they wanted particularly to raise the pay of low-paid healthcare workers. One reason why Kommunförbundet and Landstingsförbundet are especially concerned about healthcare workers is the growing labour shortage in the sector and the increasing need for staff in coming years as the large age cohorts born in the 1940s grow older and need more medical services. It is not easy to recruit more staff when there is a very low wage level for young recruits. It is not impossible that the employers will wish to establish a trend and continue awarding a little extra to young healthcare workers in coming pay agreements.

The question has been raised whether the municipal and city council pay agreement will have an effect on wage increases in Sweden's next major collective bargaining round in 2004. Usually, bargaining starts in export industries, whose pay agreements set a pattern for subsequent bargaining in other sectors not exposed to foreign competition (SE0105102F). The general opinion seems to be that the 3.95% average increase for 2003 laid down by the municipal and city council agreement will not result in problems for the rest of the labour market. However, for 2004 and beyond, it may be a problem for LO trade unions, which plan to cooperate in the next bargaining round, to adjust to the 2.5% average increase agreed by Kommunal for that year. How many trade unions with mostly male workers and higher wages than Kommunal would also agree to a wage rise at this level?

Finally, industrial action by public employees - it was a recently as 1966 that they obtained bargaining and strike rights - can cause dilemmas. In the private sector, it is principally companies which are affected by industrial action, but in the public sector, where the employer is the state or a municipality, it is the inhabitants (who are also voters and employees) that are affected by closed hospital departments, daycare centres and schools or disrupted local transport. Citizens are hit by such action in many ways. Kommunal has thus been criticised, during the conflict and afterwards, and not only by employers and their organisations, for its long-running and diffuse conflict actions. According to critics, it would have been better to have a short, broad conflict, which would better attract public support and be resolved quicker, at less cost to the citizens and the trade union. (Annika Berg, Arbetslivsinstitutet)

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Add new comment