White-collar unions under pressure to sign agreement on temporary layoffs

Unionen, the trade union for professionals in the private sector, and the Swedish Association of Graduate Engineers are under pressure from the Association of Swedish Engineering Industries and the Swedish Service Employers’ Association to conclude a central agreement on temporary lay-offs similar to that concluded for blue-collar workers in the manufacturing sector. After much debate on the impact of such an agreement for white-collar workers, there is clear disagreement among the social partners on the matter.

Background

Due to the economic crisis and the difficult labour market situation, the Union of Metalworkers (IF Metall) and the three employer organisations in industry – the Association of Swedish Engineering Industries (Teknikföretagen), the Swedish Industrial and Chemical Employers’ Association (Industri- och Kemigruppen) and the Metal Group (Metallgruppen) – reached a landmark agreement on temporary layoffs in March 2009 (SE0903019I). The agreement provides employers with the possibility to reduce employees’ working hours despite the fact that temporary layoffs are normally not permitted in Sweden.

The employer organisations in the private services and manufacturing sectors are currently pressurising the trade unions representing white-collar workers – namely, Unionen, the trade union for professionals in the private sector, and the Swedish Association of Graduate Engineers (Sveriges Ingenjörer) – to sign a similar agreement at national level that also makes it possible to introduce temporary layoffs and reduce salaries of white-collar workers.

Reactions of social partners

The President of the Confederation of Swedish Enterprise (Svenskt Näringsliv), Signhild Arnegård, argues that white-collar workers who are employed by companies that have introduced an agreement on temporary layoffs for blue-collar workers should settle for the same type of agreement. The confederation believes that such an agreement is a good way of providing for some flexibility during difficult economic conditions in order to save jobs. In contrast to Unionen and the Swedish Association of Graduate Engineers, the Confederation of Swedish Enterprise does not consider temporary layoffs as a means to reduce workers’ salaries, but rather as a means to reduce working time, thereby adjusting production to the current global recession.

Unionen, on the other hand, argues that the economy is suffering from a demand crisis and that a wage decrease resulting from temporary layoffs would only worsen the economic situation. The union highlights that if one company proceeds with temporary layoffs, thereby reducing wage costs, more enterprises will be forced to do so in order to remain competitive. Unionen also contends that temporary layoffs will not eliminate the risks of dismissals and bankruptcy. In addition, the union emphasises the risk that temporary layoffs might not only be a temporary solution. At the same time, Unionen argues that temporary layoffs are only a short-term solution and are not sufficient enough to improve the labour market situation in the longer term. Furthermore, temporary layoffs and reduced pay will have a significant negative influence on their members’ pensions, according to a press statement by Unionen in Svenska Dagbladet on 3 March 2009.

The Association of Swedish Engineering Industries announced in an article in Göteborgs-Posten on 2 April that it was willing to let the Swedish Labour Court (Arbetsdomstolen) assess its right to reduce working hours and thus salaries for white-collar workers, either by reaching a national collective agreement or local agreements on temporary layoffs. In reaction to this article, the trade unions – Unionen and the Swedish Association of Graduate Engineers – contested that any formal negotiations on this issue had taken place, stating that only informal meetings had occurred. The two unions also declared that they had not changed their position on the matter and would not settle for a national agreement like the one reached with IF Metall (article in Göteborgs-Posten on 4 April 2009).

Both the Association of Swedish Engineering Industries and the Swedish Service Employers’ Association (Almega) criticise the trade unions representing white-collar workers for being conservative and inflexible. For the employers, it is unfair that only blue-collar workers have to bear the consequences of the economic crisis and helping companies to survive in such difficult times. The employer organisations expect white-collar workers to contribute to a solution for the manufacturing industry, according to several articles in daily newspapers (Dagens Nyheter on 4 March 2009 and Du&Jobbet on 3 March 2009).

Temporary layoffs in line with existing agreement

At the end of April, Unionen’s press officer stated that company-level agreements for temporary layoffs are in line with the existing collective agreement; therefore, it is unnecessary to conclude a new collective agreement at national level. The trade union also insists that only informal meetings on this issue have taken place between the social partners and that there is no conflict between the parties. Some companies in the automotive industry, such as Scania and Volvo, were involved in negotiations with the local trade union representatives for white-collar workers in order to introduce temporary layoffs for this occupational group, according to an interview with Unionen on 21 April 2009.

The Chief negotiator at the Association of Swedish Engineering Industries, Ander Weihe, stated that formal negotiations were continuing between the parties in order to reach a national collective agreement on temporary layoffs for white-collar workers; therefore, he did not want to comment any further on the matter. Nonetheless, he responded positively to the unconfirmed statement that Unionen in an interview on 21 April had agreed to local agreements on temporary layoffs being in line with national collective agreements.

Karolin Lovén, Oxford Research

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