European Trade Union Institute, ETUI.

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The state of labour market reforms

  • Collective bargaining has been, and still is crucial in Sweden. Trade unions have found higher wages more important than the protection of employment, due to the strong social safety net for unemployed, even though the holes in the safety net became, and still are becoming larger and larger over the 1990s and 2000s. Moreover, because of the historical strength of the collective agree­ment, Swedish legislation does not include clauses about minimum wages: wages are regulated in collective agreements between the social partners and the agreement has independent status.Nor are there any erga omnes clauses, extending the national agreement to the industry in general. Some Swedish collective agreements do not contain explicit minimum wages but only calculation models or principles for pay setting. It is then the social partners at local level who must ensure that wages are set for individuals in accordance with the agreement.
  • Until recently the lack of legally regulated minimum wages was not a problem, but things have changed with the introduction of the Posted Workers Directive, the discussions about the Services Dir­ec­t­ive, and the relation of the two directives to the free movement of labour in the European Union. The most troublesome issue is therefore not social dump­ing by jobs moving abroad, or the threat of jobs moving abroad – that threat has always been posed by big business in order to curb labour militancy. Instead, since the 2004 eastbound enlargement of the European Union the big threat has been the fact that companies do not have to guarantee foreign posted labour the same conditions as workers in Sweden. Because a minimum wage level is not guaranteed in Swedish legislation, several foreign com­panies, in particular construction companies and cleaning service providers, try to use cheap labour from low-wage EU countries.
  • The toughest challenge this far has been the notorious ‘Laval conflict’. In the light of the EC Court’s ruling in the Laval case in 2007, Swedish law was changed in 2010. The four freedoms of mobility were found more fundamental than the right to fight social dumping and guarantee equal pay for equal work. Hence the Swedish legislation regarding posted workers has become less protective and therefore more ‘employer-friendly’.
  • After the Lisbon Treaty entered into force in December 2009, some of the preconditions seem to have changed. The inclusion of the Charter of Fundamental Rights of the European Union in the Lisbon Treaty might be a step towards a strengthening of collective bargaining rights, and an extended right to strike in defence of those rights.
  • There are no important law changes in the last decade regarding occupational health and safety. These regulations were, however, weakened over the 1990s and have actually continued to do so in the last 15 years, leading to bigger problems, including for workplace inspections. A standing item on the labour market agenda is the strength of the Employment Security Act (LAS). Right-wing and centre parties in the Parliament, supported by employers’ associations, attacks the law for being too ‘inflexible’, but although there have been some minor reforms over the last 10-15 years, the fundamentals of the law are still intact.
  • A more serious change in legislation, affecting the labour market, took place in 2008, when Sweden introduced new rules for labour migration. The purpose of the new regulation was to facilitate the recruitment of labour from countries outside the EU/EEA area. The expansion of labour migration could be seen as a means to mitigate the negative effects of the demographic situation. The new Swedish policies went even a step further, though. While the EU has mainly focused on highly qualified workers, the Swedish government’s intention was to also supply domestic companies with labour in general, no matter the skills level, in order to combat labour shortage.
  • A wide range of other conditions apart from wages are also determined by collective agreements, such as forms of employment, period of notice, working hours, holidays, sick pay and various insurance schemes.
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