Sweden: Posted workers

  • Observatory: EurWORK
  • Topic:
  • Posted workers,
  • Working conditions,
  • Industrial relations,
  • Published on: 05 October 2010



About
Country:
Sweden
Author:
Mats Kullander & Karolin Lovén
Institution:

Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

The principle of free movement has resulted in more open borders for the citizens in the EU and several revisions in the Swedish legislation. In Sweden the debate on posted workers has mostly involved the regulations and laws on posted workers and the difficulties of combining the posted workers directive and the Swedish model which states that the labour market is regulated by collective agreements. The views differ among social partners on how serious the problem of posted workers is. The data on posted workers in Sweden is very limited and consists of imprecise estimations.

QUESTIONNAIRE

1. Posted workers: basic facts

1.1 Please provide basic data on the workers posted in your country:

a) number (by gender);

There are no statistics available on the number of workers posted in Sweden. However during the Laval inquiry some roughs estimations were made about the number of posted workers in Sweden. The number of posted workers in the building, electrician and metal sectors was estimated to about 2,200 workers. Please note that these data are very imprecise estimations (according to Clas-Mikael Jonsson at the Swedish Trade Union Confederation, Landsorganisationen, LO, 2009).

b) distribution across sectors.

There are no statistics available for the number of workers posted in Sweden. However during the Laval inquiry some roughs estimations were made about the number of posted workers in Sweden.

  • The building sector: About 1,050 workers.
  • The electricians sector: About 280 workers.
  • The metal sector: About 900 workers.

Please note that these data are very imprecise estimations.

If possible, cover the period 2005-2008.

Since official data on posted workers are known to be at most limited, please refer also to other sources, whenever available. In sum, NCs are invited to consider data, including estimates and partial information (for instance, special investigations carried out by inspectorates in particular sectors or areas – in this cases please include details), provided by:

i. Monitoring authorities which expressly collect and disseminate information regarding terms and conditions of posted workers;

ii. National statistical offices;

iii. Administrative authorities (labour inspectorates, health and safety authorities; other bodies);

iv. Research institutes;

v. Trade unions and employer associations;

vi. NGOs.

1.2 Are there any information on the number (by gender) and distribution across sectors of workers posted to other countries by domestic companies? If yes, please provide details.

No data.

1.3 Are there any information on trade union affiliation and collective bargaining coverage of workers posted to your countries, including affiliation to foreign unions and coverage by foreign collective agreements, in addition and beyond the minimum requirements set by legislation? If yes, please provide details.

No data.

1.4 Are there any information on trade union affiliation and collective bargaining coverage of workers posted to other countries by domestic firms? If yes, please provide details.

No data.

1.5 Please refer the main content and results of any studies on posted workers (either in-coming or out-going), both quantitative and qualitative which have been carried out in your country.

There has been a study (Lindwert 2005) in 2005 on the effects on Sweden of the principle of free movement in the EU, which have resulted in more open borders for the EU citizens and also in several revisions in the Swedish legislation. As social dumping is closely linked to the free movement of services this study investigates the risks of social dumping for Sweden. The decision of the EC-court in the Laval case has later meant great changes for the Swedish labour market on this point. The conclusion of the study from 2005 was however that free movement of services meant a decrease in the influence of the trade unions, because they would probably not in the future be able to use industrial action to force foreign employers to sign collective agreements, and that there was a need of clear regulations for posted workers. According to Johanna Lindwert: “Fri rörlighet för tjänster inom EU – Social dumping eller harmoniserad arbetsmarknad” (Free translation: Free movement of services within the EU – Social dumping or harmonized labour market) costs between countries within the EU will be equalized and competition promoted by free movement because companies would have to keep up with the competition.

There have been a debate and studies (Davesne 2009, Eklund 2007) on whether the verdict on the Laval case in the EC-court was a serious threat to the Swedish model. In Sweden wages are settled through collective agreements reached between social partners without interference from the state. There are different opinions on how to regulate wages in Sweden after the EC-court verdict related to the Laval case stated that industrial action cannot be used in the same extent to force foreign employers to sign collective agreements. Because of the Laval verdict there is a need of new rules to regulate the wages of posted workers and there is a debate on how these new rules should be formed. One possible alternative could be regulated minimum wages. Another alternative could be collective agreements which are universally applicable. A third alternative could be for collective agreements to include a minimum wage that the trade unions would have the right to demand for foreign employers to pay their workers. If the foreign employer applies the collective agreement it would be protected from industrial action. This would mean that posted workers would have clear wage-conditions and the Swedish workers would be protected from social dumping. The last alternative would probably mean the least interference with the Swedish model (According to Ekström & Pfeifer 2009).

2. Regulation of posted workers

2.1 Please provide details on the current legislative framework for posted workers in your country:

a) Reference to the law adopting the posted workers directive: number, date, and link to the text, if available, in English;

The law adopting the posted workers directive is the Foreign Posting of Employees Act (SFS 1999:678).

b) A brief account of any amendments or integrations introduced after the initial adoption;

There have been no major amendments or integrations introduced after the initial adoption of the law and the changes made have been rather limited to its extent such as clarifications of existing paragraphs. However, a commission of inquiry was established with purpose to develop recommendations for changes in the law following the verdict in the Laval Case. Therefore it is most probable that there will be significant changes, regarding the law, in the future (According to Maria Nyman at the Swedish Work Environment Authority (Arbetsmiljöverket, AV)). .

c) A description of the current legal framework regarding posted workers, especially:

- as regards the way employment conditions are enforced, as required by art. 3.1. of the Directive:

i. by law, regulation or administrative provision, and/or

ii. by collective agreements or arbitration awards which have been declared universally applicable;

In Sweden employment conditions are enforced by law and also by collective agreements. The wages in Sweden are settled in negotiations between social partners and the collective agreements which are the results of these negotiations. The negotiations take place between the trade unions and the employers’ associations and these organisations also make sure that these employment conditions are enforced. However many issues apart from wages, such as working environment and vacation, are regulated by law.

- whether the law requires the application to posted workers of:

i. the whole system of labour law or only minimum terms expressly identified with reference to the list in art. 3.1.

ii. the whole content of collective agreements or arbitration awards which have been declared universally applicable or only minimum terms expressly identified with reference to the list in art. 3.1.

The law applies to posted workers to the same extent as it applies to Swedish workers (Jonsson 2009)..

- if the employment conditions are set by collective agreements or arbitration awards, please specify which is the legal instrument which make them universally applicable:

i. according to the law. Please specify the law reference number and year and whether it includes certain requirements for universal application. In this latter case, please specify such requirements.

ii. according to a ministerial decree. Please specify which minister or political authority can issue the decree and whether certain requirements are needed. In this latter case, please specify such requirements.

iii. since rules on mandatory representation make collective agreements (in practice) universally applicable.

The Swedish labour market model is based on social partner dialogue and negotiation on collective agreements, rather than state regulation. The social partners concluded a central agreement, known as the Saltsjöbadsavtalet, in 1938. Its aim was to give the labour market parties the right to regulate labour market matters, rather than relying on state regulations. The central agreement and collective agreements are a fundamental part of the Swedish labour market model. Although the Saltsjöbadsavtalet is still valid, it has been amended several times, most recently in 1976 (SE0811029I).

- if the employment conditions are set by collective agreements, please specify which collective agreements are relevant:

i. intersectoral or sectoral. Please provide examples.

ii. national or territorial. Please provide examples.

The collective agreements in Sweden are sectoral and national.

d) whether the legal framework sets a maximum period for considering a worker a “posted worker” rather than a “resident worker”. If yes, please specify this maximum period.

No, the legal framework does not set a maximum period for considering a worker a “posted worker”. What determines considering a worker a “posted worker” rather than a “resident worker” is rather their degree of connection to Sweden. Therefore, a posted worker is a worker who normally works in another country but for a limited period carries out his work in Sweden.

e) whether there are special rules for certain sectors (for instance, construction). If yes, please specify the sectors and briefly illustrate such special rules.

According to the Foreign Posting of Employees Act (1999:678) there are exceptions of how to apply the provisions of the Annual Leave Act when the foreign posting lasts for less than eight days. If the work is related to building activities the exception, however, does not apply and the worker is entitled to holiday benefits just as any other worker. An employer shall also apply the provisions of the restriction of working hours act for foreign posted employees but these rules also differs among sectors such as for air personnel and railway workers. Therefore the rules differ across sectors. The collective agreements also differ across sectors.

f) whether a monitoring system for collected data and information on the number and employment conditions of posted workers was set up. If yes, please provide details on such system (bodies involved, structure, methods of collection and dissemination of information, etc.) and its effectiveness;

The Swedish Work Environment Authority (Arbetsmiljöverket, AV) is the responsible body for providing information about the work and employment conditions that may become applicable upon a foreign posting in Sweden. However, there is no obligation for posted workers to report their presence in the country, and there is no system for collecting data and information on the number of the posted workers. The employment conditions of the posted workers are controlled in the same way as in the case of the Swedish workers. The Swedish Work Environment Authority makes sure that the working environment law is followed and respected(Nyman 2009). In case of discrimination the posted worker can turn to the Equality Ombudsman (Diskrimineringsombudsmannen, DO) in Sweden, just like the Swedish workers have the same possibility.

g) whether measures were introduced to make the information on the terms and conditions of employment generally available to foreign service providers and to the posted workers concerned.

The Swedish Work Environment Authority is the liaison office and provides information about the work and employment conditions that may become applicable upon a foreign posting in Sweden. The Swedish Work Environment Authority also collaborates with the corresponding liaison offices in other States within the EEA and in Switzerland (According to the Foreign Posting of Employees Act (1999:678)). . The trade unions provide the workers with information about the collective agreements and their rights according to the relevant collective agreements(Nyman 2009).

h) whether the law envisages the implementation of special labour inspections devoted to verify the number and employment conditions of posted workers. If yes, please provide details on how these are organised and on their effectiveness and outcomes.

In Sweden the social partners are responsible for watching over employment conditions.

2.2 Please specify the current rules for the posting of temporary agency workers in your country, especially whether the law requires the application to temporary agency workers of:

a) the whole legislation on temporary agency work or only minimum terms expressly identified with reference to the list in art. 3.1.

The law requires the application to temporary agency workers of the whole legislation of posted workers, the Foreign Posting of Employees Act (SFS 1999:678) (Järsö 2009).

b) the types and requirements for temporary agency work established by national legislation (compared to those envisaged by the legislation of the country of origin). For example, can temporary agency workers be posted under contractual arrangements – such as indefinite duration staff leasing - which would not be available for national temporary work agencies?

The requirement for temporary agency workers is the legislation of posted workers, the Foreign Posting of Employees Act (SFS 1999:678). Further, there is no particular legislation for conditions of employment for temporary agency workers in Sweden. The only regulations there are regarding temporary agency work regulates the terms of employment regarding the case when employees want to change employment from their agency to the firm where they perform work or other similar situations(Järsö 2009).

2.3 Please specify the current rules for employment conditions in public procurement, notably whether the law:

a) requires explicitly the application of specific terms and conditions of employment to be awarded public procurement contracts. If yes, please specify what kind of terms and conditions of employment must be applied (comprehensive terms or only minimum levels?).

The law that regulates public procurement in Sweden (SFS:1091) contains three types of conditions: obligatory conditions, allocation conditions and special conditions. The obligatory conditions contains rules of qualification that must be fulfilled to be entitled to public procurement contracts, such as the fact that the applicant should not have a criminal record and must accept the obligations to pay tax. The allocation conditions contain rules about the tender and the contract procedure. The category of special conditions include the conditions of employment and here the law does not require certain conditions to be fulfilled but states instead that the demands that are set up must be in accordance with certain regulations. These regulations state that the tender must be proportional, transparent, non-discriminatory and equally treating in accordance with EU-law and national regulations (according to Omar Khan at the Swedish Competition Authority (Konkurrensverket) 2009). The law that regulates public procurement does therefore not require explicitly the application of specific terms and conditions of employment to be awarded public procurement contracts.

b) requires explicitly the application of specific collective agreements to be awarded public procurement contracts. If yes, please specify what kind of agreements must be applied (national, sectoral, territorial) and to what extent (the whole agreement or only certain and minimum provisions?).

No, it is prohibited by law to require the application of specific collective agreements to be awarded public procurement contracts (Khan 2009).

c) allows awarding authorities to require the application of specific collective agreements to be awarded public procurement contracts. If yes, please specify to what extent this possibility is used (almost always, often, rarely, almost never) and what kind of agreements are more often considered for such clauses (national, sectoral, territorial).

No, it is prohibited by law to require the application of specific collective agreements to be awarded public procurement contracts (Khan 2009)..

d) envisages specific clauses in the case of posted workers. If yes, please briefly illustrate the contents of such rules.

No, the law does not envisage specific clauses in the case of posted workers(Khan 2009).

2.4 Please specify the current rules for cross border workers (workers crossing borders on a daily basis to work in a neighbouring country), notably whether the law:

a) considers them as posted workers or envisages special rules.

Cross border workers are not considered as posted workers and there are no special rules for cross border workers regarding employment conditions. However there are in some cases certain rules for cross border workers regarding, for example, the tax (Khan 2009).

b) if special rules are in place, please briefly illustrate the contents of such rules and notably whether they:

i. require explicitly the application of specific terms and conditions of employment to cross border workers. If yes, please specify what kind of terms and conditions of employment must be applied (comprehensive terms or only minimum levels?).

ii. require explicitly the application of specific collective agreements to cross border workers. If yes, please specify what kind of agreements must be applied (national, sectoral, territorial) and to what extent (the whole agreement or only certain and minimum provisions?).

3. Labour disputes and case law on posted workers

3.1 Please indicate whether labour disputes involving posted workers are frequent or increasing in recent times.

The labour disputes involving posted workers are not frequent in Sweden. The Laval case is a labour dispute that has gained a lot of attention and created an extensive debate in Sweden. However it seems that everyone awaits the Swedish government to act on the Laval inquiry’s proposals before taking any further action (Khan 2009). .

3.2. Please provide information on any major labour disputes which has involved the utilisation of posted workers in your country. Please include for each case:

a) the description of the activity involved;

There was a blockade and sympathy action against the Latvian company Laval un Partneri Ltd. at a building site in Vaxholm, Sweden. The reason for the dispute was that Laval had refused to observe the relevant collective agreement and that the wages of the Latvian builders working there were too low (SE0412101N).

b) the contractual parties: a) the contracting firm or body; b) the foreign service provider;

(i) The City of Vaxholm.

(ii) The Latvian company Laval un Partneri Ltd.

c) the reasons for the dispute;

In November 2004, the Swedish Building Workers’ Union launched a boycott of Laval un Partneri Ltd., a Latvian construction company currently carrying out work in Sweden. The reason was that Laval had refused to observe the relevant collective agreement and pay Swedish wages to its workers, who were Latvians (SE0901029I).

d) the parties to the dispute: i) employees; ii) trade unions; iii) employers;

(i) Latvian building workers at Laval un Partneri Ltd.

(ii) The Swedish Building Workers’ Union (Byggnads) and the Swedish Electricians’ Union (Svenska Elektrikerförbundet).

(iii) The Latvian company Laval un Partneri Ltd.

e) a brief account of the dispute: its origins, developments, and outcomes.

The Swedish Building Workers’ Union (Byggnads) launched a boycott of Laval un Partneri Ltd., a Latvian construction firm carrying out building work at a site near Stockholm, on 2 November 2004. Byggnads was arguing that Laval un Partneri Ltd. had had refused to observe the relevant collective agreement and that the wages of the Latvian builders working there were too low (SE0412101N). The Latvian company and building workers continued working despite the action by Byggnads and more participants became involved as the dispute intensified. The Swedish Electricians’ Union gave notice of a boycott of all electric installation work at the sites in December 2004. The Latvian enterprise brought a case in a Swedish industrial court, which ended up in the European Court of Justice. The final verdict from the ECI was ruled out in December 2007. The verdict stated that the blockade and sympathy actions against the company Laval was not according to EC Directive on posting workers (Directive 96/71/EC). The verdict also limited trade unions’ right to take industrial actions to force foreign companies to sign collective agreements when operating in Sweden (SE080429I). The trade union blockade had made it impossible for Laval to finish their work long before the final verdict came and the company had terminated their work at the construction site in Vaxholm.

f) whether it involved industrial conflict. If yes, please illustrate briefly the forms and results of conflict.

Yes, there was a blockade and sympathy action against the Latvian company Laval at the building site in Vaxholm. The trade union blockade made it impossible for Laval to finish their work and therefore the City of Vaxholm and Laval decided that the company should terminate their work at the construction site.

g) whether it led to a case before a (labour) court. If yes, please illustrate briefly the contents and grounds of the (labour) court’s decision.

The Latvian enterprise brought a case in a Swedish industrial court, which ended up in the European Court of Justice. The final verdict from the ECI was ruled out in December 2007. The verdict stated that the blockade and sympathy actions against the company Laval was not according to EC Directive on posting workers (Directive 96/71/EC). The verdict also limited trade unions’ right to take industrial actions to force foreign companies to sign collective agreements when operating in Sweden (SE080429I).

3.3 Please provide information of existing case law involving posted workers. Please include:

a) an indication of the frequency of cases involving posted workers;

The number of cases involving posted workers is rather limited in Sweden and there have been about ten cases in the last ten years(according to a representative at the Swedish Labour Court).

b) the main reasons leading to cases before courts;

The main reasons leading to cases before courts is that enterprises refuse to sign a collective agreement, that the wages are too low, or that as in some cases a firm neglects to pay wages( Jonsson 2009).

c) the kinds of parties which more often refer such cases to the courts;

The trade unions or the employees.

d) the kinds of parties which are more often called before the courts in such cases;

The employers.

e) the emerging jurisprudence on issues regarding posted workers, that is a brief account of the contents and grounds of the principal court’s decisions.

There have been no major changes on issues regarding posted workers. The laws are being administered as they were written from the beginning (Nyman 2009).

4. The positions and actions of the social partners and the government on posted workers

4.1 Please indicate the positions and main initiatives that the social partners and the government have taken with reference to posted workers, either in-coming or out-going, and especially indicate:

a) the presence of a debate on the relevance and consequences for national labour law and industrial relations institutions of recourse to posted workers. If such debate is present, please refer its main contents and whether it refers to specific sectors.

There is an extensive debate on these issues in Sweden, especially following the verdict of the Laval cased ruled by European Court of Justice. However, the views differ on how serious the problem of posted workers is. The Swedish Trade Union Confederation (LO) has expressed concerns that the verdict on the Laval case might result in problems preventing social dumping while the Confederation of Swedish Enterprises (Svenskt Näringsliv) welcomed the courts decision out of hope that it will increase the free movement of services. The Swedish Confederation for Professional Employees (TCO) states that it is unacceptable with restrictions of the trade unions’ rights to control that enterprises adjust to Swedish collective agreements (Nordh 2008). Attention was also paid to the issue of posted workers in the electoral campaign for the European Parliament (SE08429I)(SE0706029I).

b) any positions expressed or actions taken in view of the recent rulings by the European Court of Justice (cases Laval un Partneri - C-341/05, Rüffert - C-346/06, Commission v Luxembourg - 319-06).

The Swedish government announced an investigation that would look at the consequences of the Laval verdict for the national labour law and suggested amendments to current legislation in order to fulfil the requirements set by the European Court of Justice. The Laval Inquiry presented the results of its work in December 2008. The committee proposed that Swedish trade unions are not allowed to take industrial action to force a collective agreement if an employer of another EEA country already applies agreements that correspond to minimum wages and working conditions according to Swedish collective agreements. The inquiry also stressed social partners’ key role and huge responsibility to ensured that the model, proposed by the committee, will work in practice and in a way that satisfies the requirements of Community law. It is now up to the Swedish government to act on the inquiry’s proposals and to introduce a government bill (SE080429I)(SE0801019I)(SE0706029I).

c) any campaigns or initiatives specifically aimed at posted workers or firms posting workers. If such campaigns or initiatives are present, please indicate their main features and whether they refer to specific sectors.

The Swedish Building Workers’ Union initiated a boycott against the Latvian company Laval at the building site in Vaxholm, Sweden. There was a blockade and sympathy action against the company.

Commentary

As has been shown throughout the text, the Laval case put focus on the issue of posted workers, their wage and working conditions, and their impact on the Swedish labour market. This case has also sent repercussions to the rest of Europe, and the Laval case has been debated both in Universities, between social partners and in the European Parliament. In Sweden, the case is still not over, and its aftermath will determine the future of Swedish labour market and its relations to its posted workers.

Sources:

Interviews:

  • Clas-Mikael Jonsson, lawyer at the Swedish Trade Union Confederation (LO). Interview on June 9 2009. Telephone number: +46 76 119 26 31.
  • Maria Nyman, lawyer at the Swedish Work Environment Authority (Arbetsmiljöverket). Interview on June 15 2009. Telephone number: + 46 8 730 90 72
  • A representative at the Swedish Labour Court (Arbetsdomstolen). Interview on June 16 2009.
  • Omar Khan, representative at the Swedish Competition Authority (Konkurrensverket). Interview on June 17 2009. Telephone number: +46 8 700 16 00
  • Gunnar Järsö, head negotiator at Almega - Forum for Service Companies (Almega) Interveiw on June 17 2009. Telephone number: +46 8 762 69 75

Mats Kullander & Karolin Lovén, Oxford Research

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