Sweden: Latest working life developments – Q4 2016
Preparations for the upcoming bargaining round, debates on how and when collective agreements can be demanded, and research results showing the health benefits of reduced 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 fourth quarter of 2016.
‘Competitiveness’ – the key word in upcoming bargaining round
Only a year has passed since the last bargaining round. However, due to the parties’ struggles to agree, most of the agreements signed were for a one-year period. Thus, around 500 collective agreements are to be negotiated at the beginning of 2017, covering around 2.7 million workers.
In mid-December, the two sides involved in the norm-setting industrial agreement exchanged demands. The unions are demanding a one-year agreement with wage increases of 2.8% and a minimum raise of SEK 430 (about €45) per month. According to a union spokesperson, this demand is lower than usual, mainly due to the current economic climate and the issue of international competitiveness. Employers wish to see wage increases below 1.5%, putting an even stronger emphasis on the need to improve Swedish competitiveness.
The debate on how Swedish workers’ wages relate to Swedish competitiveness has often constituted one of the main stumbling blocks in the negotiations. That is perhaps why many were surprised by a report on competitiveness released recently by Industrirådet (PDF), a council of the social partners in the manufacturing industry. While the report did not make direct recommendations, one of its main conclusions was that Sweden needs to compensate for its geographic location (far away from the large and growing industrial market) and for its relative size by, for example, increasing employment flexibility. It is still unclear whether the report will affect the forthcoming negotiations.
Proposed reforms to regulations on posted workers
Eurofound has previously reported on the impact of the so-called Laval case on industrial relations in Sweden. In short, the Court of Justice of the European Union (CJEU) ruled that the Swedish Building Workers’ Union (Byggnads) and the Swedish Electricians’ Union (SEF) had acted unlawfully when they set up a blockade in order to persuade Latvian construction company Laval Un Partneri Ltd to sign a collective agreement covering their posted workers in Sweden. In response to the CJEU ruling, changes were made to the regulations regarding posted workers. The reform, commonly known as Lex Laval, restricted the unions’ right to use industrial action against posting companies and has been widely criticised by employees’ organisations and some Swedish political parties. The Social Democratic Party was quick to declare its wish to dramatically change Lex Laval. A first draft proposal was recently made public and it currently looks as though it has majority support in parliament. The vote is planned for the first quarter of 2017.
Collective agreement proposal voted down
The proposal to make collective agreements mandatory in companies applying for public contracts (reported on in the third quarter of 2016) was voted down by parliament. While many on the employers’ side were pleased by the decision, several trade unions have expressed their disappointment. The Swedish Confederation of Professional Employees (TCO) has stated that it might report Sweden to the European Commission for not complying with EU law.
Health benefits of reduced work hours
A Swedish study published in the Scandinavian Journal of Work, Environment and Health found that a 25% reduction in weekly work hours with retained salary resulted in beneficial effects on sleep, fatigue, perceived stress and worry on both work days and days off. These effects were maintained over an 18-month period. The results indicate that reduced working time may improve recovery and perceived stress.
While the last quarter of 2016 was a rather calm period in terms of developments in industrial relations, the first quarter of 2017 is likely to be more eventful due to the upcoming bargaining round. The fact that there was a significant divide between the partners during the 2016 bargaining resulted in many one-year agreements. At the time of writing, the main conflicts have yet to be resolved. Thus, it is likely that 2018 will also be an important year for developments in working conditions.