Home / National Industrial Relations / Countries / Sweden / Collective Bargaining

Collective Bargaining

The key level for collective bargaining in Sweden is the industry level, although more than 90% of employees have part of their pay determined by local level negotiations, and 8% have all their pay determined locally. The overall level of coverage of collective agreements is high – estimated at 90%.

The key level for collective bargaining in Sweden is the industry level, although around 90% of employees have part of their pay determined by local level negotiations, and 11% have all their pay determined locally. The overall level of coverage of collective agreements is high – estimated at 88%.

The framework

Traditionally collective bargaining in the private sector has taken place at three levels: between the union confederations and the main employers’ association, the Confederation of Swedish Enterprise (Svenskt Näringsliv) at national level; between the individual unions and employers’ industry associations at industry level; and between the company and the local union at local level.

For around 30 years between 1956 and the late 1980s the key bargaining level was national, with deals covering the whole economy. However, this era has now ended, with the first major break from this pattern coming in 1983 in the metalworking sector.

The current situation is that the wage bargaining at national level has come to a virtual stop in the private sector and the Confederation of Swedish Enterprise does not play any part in wage bargaining. Nevertheless, a number of non-wage framework agreements between the unions and employers at national level such as the 1982 efficiency and participation agreement continue to exist and new agreements outside the area of pay continue to be signed. For example, in 2006 a new national agreement on pensions was reached for 700,000 non-manual workers in the private sector, and in September 2012 the Confederation of Swedish Enterprise began negotiations with PTK, the negotiating group that brings together TCO and Saco, on new redundancy arrangements.

However, for pay the key bargaining level is now the industry level, although there is still some co-ordination at national level, as well as a lot of room for variation at company/organisation level. Around 60 unions and 50 employers’ associations are involved in bargaining at this level.

Bargaining coverage is high. The National Mediation Office (Medlingsinstitutet), which was set up in 2000, reports that 88% of employees are covered by collective bargaining, with 83% coverage in the private sector and 100% in the public sector.1

The extent to which industry level agreements set pay at local level varies substantially. At one end of the spectrum, there are those where the national agreement does not set a pay increase but leaves it entirely to local negotiations without any nationally specified amount. At the other end there are those where the national agreement fixes a common increase for all employees. Overall, the National Mediation Office estimated in its report on negotiations in 2012 that 11% of all employees were covered by agreements which leave wage setting entirely to local negotiations and 11% by agreements setting a nationwide increase with no local variations.2 This means that the pay for more than three-quarters (78 %) of employees is set by a combination of industry and local negotiations. This is often done through a nationally agreed increase on the total pay bill, with local negotiations on its distribution, sometimes with individual supplements linked to performance. Agreements also often include fallback arrangements, which set the increases to be paid if no local agreement is reached, and frequently there is also a guaranteed minimum increase for individuals. This decentralisation and flexibility is more common in the public than in the private sector. The National Mediation Office report for 2012 shows 5% of private sector employees covered by agreements in which wage setting is left entirely to local negotiations, compared with 44% of state employees (central government) and 16% of local authority employees.

There are normally separate agreements for manual and non-manual workers.

Who negotiates and when?

Industry level collective agreements are signed by the employers’ association and the union. At company level the employer reaches agreement with the local union organisation. Agreements are legally binding on the signatories and their members and employers who have signed an agreement with a union are obliged to apply it to all their employees, not just union members.

Until recently, most pay agreements ran for three years, although they often had an option to terminate an agreement one year before it ended. As most agreements started at the same time, this produced a clear three-year negotiating cycle – 2001, 2004, 2007 and 2010. The agreements reached in the period 2010 to 2012 ran for shorter periods, in part because of the uncertain economic situation, but the settlements reached at the start of 2013 were again for three years.

Since 1997, within the framework of the industrial cooperation and negotiation agreement (Industrins samarbetsavtal och förhandlingsavtal), a number of unions and employers’ associations have signed agreements on co-operation and bargaining procedures. These involve agreeing timetables for negotiations, rules for the appointment of mediators and arrangements for ending negotiations. One of the aims of these procedures is that the two sides should settle before the old agreement expires. In the 2012 bargaining round 64% of private sector employees and 73% of those in the public sector were covered by agreements reached before the old ones expired , or within three weeks of their doing so.3

The subject of the negotiations

As well as pay and working time, most elements of life at work can be covered by collective bargaining. Some, such as topping up sick pay, compensation for accidents or pension levels that exceed state provision, both for disability and in old age, are dealt with through industry level bargaining. But local level negotiations can cover a range of issues like training or the introduction of new technology (see section on workplace representation).

L. Fulton (2013) Worker representation in Europe. Labour Research Department and ETUI. Produced with the assistance of the SEEurope Network, online publication available at http://www.worker-participation.eu/National-Industrial-Relations.