Sweden: Latest working life developments – Q1 2017

A new research centre for working environment issues, an additional pay element in the collective bargaining round and involuntary reductions in working time are the main topics of interest in this article. This country update reports on the latest developments in working life in Sweden in the first quarter of 2017.

New research centre

In March, the government announced plans for a new research centre for working environment issues. Its purpose is to collect and disseminate research about the working environment and contribute to knowledge development in the field. Social partners have requested such an institution for a long time and the plans have also been met with positive reactions from researchers, partly because it will fill a gap left after the closure of the Swedish Working Life Institute in 2007. According to several researchers, the new centre will also make it easier to take part in international research projects.

Collective bargaining in 2017 – now with two cost marks?

The bargaining round was in full swing in the first quarter of 2017. Unlike last year, the Swedish Trade Union Confederation (LO) managed to coordinate the wage demands of its affiliated trade unions, reducing the risk of conflict. On 31 March, a new industrial agreement was signed by the social partners in the industrial sector. As is customary, the agreed increase in labour costs (6.5% over three years) now becomes the norm for labour cost growth and thus forms a basis for collective bargaining in all the other sectors.

However, a new element in the industrial agreement has caused confusion. In addition to the overall percentage wage increase, the social partners agreed on a specific payment to workers earning less than SEK 24,000 (€2,500 as at 19 April 2017). But while the employers argue that this measure was a deal solely for the industrial sector, the trade unions argue that it should constitute a new norm – a second labour cost mark.

This clash now seems certain to lead to more conflict than was initially expected. For instance, the Hotel and Restaurant Workers Union (HRF) recently issued a notice of intended strike action after failing to agree with the employer organisation in the sector, Visita. LO has come out in support of HRF, stating that the employers should be ashamed of their refusal to give the already relatively low-paid workers in the hotel and restaurant sector the same wage increase as in the industrial sector. However, the Confederation of Swedish Enterprises has backed Visita, arguing that LO should keep its affiliated unions in check so that the real (first) cost mark is honoured.

Involuntary reductions in working time

In late 2016, the Swedish Labour Court ruled in favour of an employer who, instead of dismissing one or more employees, reduced the working hours of several full-time employees. This was alleged to have flouted the Employment Protection Act (1982:80), which states that the employee with the longest aggregate period of employment is entitled to remain employed the longest, provided that they had sufficient qualifications for any of the remaining positions. The Commercial Employees’ Union, representing the affected workers, argued that the employer had, in effect, dismissed the workers only to then re-hire them under less favourable contractual terms. However, the Labour Court ruled in favour of the employer, who argued it was a matter of redeployment rather than dismissal.

The ruling has angered many unions, which argue that the employer’s action was an outright circumvention of the law and that the ruling will now enable employers in all sectors to start ‘slicing off’ employees’ working hours against their will. LO is now urging for legal revisions to make this form of involuntary reduction in working time illegal. To raise awareness and to persuade policymakers, a campaign was launched by employee organisations on Facebook and Twitter in February based around the hashtag #slutahyvla (translated as ‘stop slicing off’).

The Confederation of Swedish Enterprises is firmly opposed to the legal restrictions proposed by the employee organisations, arguing that having to guarantee full-time positions to some employees would result in even more dismissals.

The Minister of Employment at first stated that the issue would be better resolved by social partners than through legislation, but she has recently backtracked, coming out in favour of a legislative solution.

Commentary

The second quarter will probably be characterised by the continuing bargaining rounds as many more agreements have yet to be reached. The disagreement on whether there are now two cost marks to adhere to could lead to strikes or other forms of industrial action in several sectors.

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