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 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.
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. The Swedish mediation office (Medlingsinstitutet), which was set up in 2000, estimates that 90% of employees are covered by collective bargaining, with 85% coverage in the private sector and 100% in the public sector. 1
In its detailed analysis of collective agreements, the mediation office divides them into seven separate categories. These range from those where the national agreement does not set a pay increase but leaves it entirely to local negotiations without any nationally specified amount – so called “figureless agreements” – to those where the national agreement fixes a common increase for all employees. Overall it estimated in its report on negotiations in 2010 that 8% of all employees were covered by figureless agreements and 6% by agreements setting a nationwide increase with no local variations. This means that the pay for more than 80% 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 has been at least as common in the public as in the private sector. The Swedish mediation office report for 2010 shows 6% of private sector employees covered by figureless agreements, compared with 38% of state employees and 5% of local authority employees.
There are normally separate agreements for manual and non-manual workers.
As agreements now typically last several years, pay increases are staged over the period of the agreement.
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.
Until recently, most pay agreements ran for three years, although they often had an option to terminate an agreement one year before it ended. This option was used by the building workers’ union Byggnads in 2008. As most agreements started at the same time, this produced a clear three-year negotiating cycle – 2001, 2004, 2007 and 2010. However, the 2010 bargaining round produced a different pattern, with many agreements being reached for around two years.
Since 1997 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. In 2010, one of the major employers’ associations, representing employers in engineering, withdrew from the agreement setting the procedures for its industry. However, the implications of this decision are still not clear.
One of the aims of these procedures is that the two sides should settle before the old agreement expires. In the 2007 bargaining round 67% of employees were covered by agreements reached before the old ones expired – but in 2010 only 23% of employees were covered by agreements which met this timetable. Difficulties in negotiating on the position of agency workers are a partial explanantion of this delay.
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).
