Council for Redundancy Support and Advice under debate

During the 1990s, around 110,000 employees in Sweden facing unemployment have received help from Restart, the Council for Redundancy Support and Advice. The activities of the council are based on a collective agreement which is at present being renegotiated at the request of the employers. The trade unions fear that the changes called for would lead to the ending of a activity which has worked well. The employers claim that the unions are overreacting. This feature describes how Restart works and the background to the present negotiations, which began in summer 1997.

In 1974 the private sector Swedish Employers' Confederation (Svenska Arbetsgivareföreningen, SAF) and the negotiating cartel, the Federation of Salaried Employees in Industry and Services (Privattjänstemannakartellen, PTK) concluded a collective agreement ( known as the trygghetsavtalet), with the objective of helping members of the PTK's trade unions in the event of redundancies. The background was that the various educational and retraining schemes organised and financed by the government did not meet the special needs of salaried employees. Thus the parties agreed that the employers should pay a certain percentage of the total payroll for its white-collar workers to a foundation, Trygghetsrådet (Restart- the Council for Redundancy Support and Advice), from which individual workers could receive financial as well as moral support in their efforts to obtain a new job.

Restart could also give companies which began to fare badly subsidies for preventive measures - for example, training of the workforce. Gradually it became clear that this led to a distortion of competition. SAF also had another complaint. It meant that the employers were forced to pay twice for the same thing. Even though they made contributions to Restart, the trade unions at company level would not agree on derogations from the statutory order of priority for dismissals (last in, first out) if the employer did not guarantee extra benefits to the redundant workers.

Thus in 1994, the existing agreement was replaced by a new "adjustment agreement" or "agreement on transition" (omställningsavtalet), which is still in force. Around 30,000 companies with 650,000 employees are covered, not only salaried employees as before, but also certain blue-collar workers, mainly in state owned companies. For a contribution of 0.35% of the payroll ,all employers receive a basic service. Employers who pay 0.2% extra receive additional services.

Restart's activities

With the adjustment agreement, the trade unions have pledged themselves to agree on derogations from the order of priority for redundancies when this is needed in order to improve the company's productivity, profitability and competitiveness. The support given directly from Restart to the companies is now limited to advice and information. In a situation where a company has more employees than its operation requires, Restart's consultants help the employer and the local trade union representatives to analyse the situation, encouraging them to think not only of the present problems but also of the future needs of the company. If it is just a temporary downswing, for example, it could be better in the long run for both the employer and the workers to make use of the time by allowing the workers to receive further training. The consultant provides the company with information concerning different government subsidies for such purposes.

If, however, the employer decides to dismiss some of his employees, strong efforts are made to help them to find new jobs, to start own business or to begin studying. Immediately after the notice of termination, all employees are allocated a personal consultant, who helps them to map out their competence and interests and to investigate how these can be matched with the needs of the labour market. If the worker is thinking of setting up a business, the consultant can assist in scrutinising the business idea and the worker's personal qualifications for running an enterprise. The purpose is that all worker should draw up their own individual plan of action. Restart goes on supporting the worker in realising the plan, and the consultant will remain in personal contact as long as needed.

If the worker's employer is affiliated to the additional services provisions of the adjustment agreement, Restart can even pay for a period of practice, education or acclimatisation at a new workplace. It can also give subsidies to workers who have set up own businesses for covering smaller expenses at the beginning of their venture.

The statutory term of notice in case of redundancy varies between one and six months. Employees aged 40 years or more who still have not found themselves new jobs when this period has elapsed are entitled to a redundancy payment, provided that they have been employed by the same employer continuously for the previous five years. The redundancy payment supplements unemployment benefits so that the worker receives an income of 75% of his or her salary for up to two years.

Time for revision

However, SAF now believes that it is time to revise the tasks of Restart once again, In June 1997 it gave notice of termination of the adjustment agreement (SE9706127N) and in August it produced its proposals. SAF claims that the additional services provisions, which were meant to be optional, have in practice become compulsory, and wants to abandon the system with two service levels. The redundancy payments should be administered in the same way as today, but Restart should be reorganised into a private company, from which employers and workers who want more than the basic service can buy additional services. PTK admits that most employers have undertaken to pay for the additional services, but points out that this is a result of free collective bargaining. PTK fears that SAF's proposals would lead to the end of the clearing activities. "Companies that are doing badly have a tendency to wait with the necessary measures until it is too late", says Karl-Gunnar Skoog of PTK. SAF representatives are anxious to tone down the debate.

Commentary

The trygghetsavtaletwas an innovative agreement when it was concluded in 1974 and was followed by similar agreements for other groups of workers. The state sector has a foundation that works very much in the same way as Restart. In 1996 around 39,500 persons received practical and economic assistance from Restart. A little more than 12,000 of them received redundancy pay, and 1,100 started businesses of their own. Its activities are certainly important to many people and give them a real chance of finding a new job. As SAF has been unwilling to discuss its proposals in public, it is hard to judge if they would have such severe consequences as PTK claims. It seems unthinkable that the employers would jeopardise such a highly praised activity, and this would not facilitate local negotiations concerning the order of priority in the case of redundancies. (Kerstin Ahlberg, NIWL)

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