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Collective Bargaining

The key level for collective bargaining in Sweden is the industry level, although, within the industry-level framework, around 91% of employees have part of their pay determined by local level negotiations, and 28% have all their pay determined locally. The overall level of coverage of collective agreements is high – estimated at 88%.

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 – SN) at national level; between the individual unions or groups of unions and employers’ industry associations at industry level; and between the company and the local union at local level.[1]

 

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.

 

Wage bargaining no longer takes place at national level, although LO, the manual workers’ union confederation, still has a coordinating role when wage claims are drawn up.[2] (The two non-manual confederations, TCO and Saco, do not have a co-ordinating role.)  However, negotiations on non-wage issues have continued at national level, and agreements signed at this level in the past still provide key employee rights. Examples of the issues covered by these agreements include occupational pensions, sickness insurance, parental benefits, death in service benefits and work injury insurance.

 

An indication of the role that national level negotiations can play is shown by the discussions on employment protection in 2020, Having made a political commitment to change to Sweden’s employment protection legislation, the government handed the issue over to the unions and employers at national level, to reach an agreement on the details. The agreement which emerged from these negotiations in December 2020, was not signed by LO, but it was accepted by Kommunal and IF Metall, LO’s two largest affiliates, and by PTK, which brings together non-manual unions in the private sector.[3] The government has indicated that that agreement will the basis for future legislation.

 

However, while national negotiations are important in setting the framework, industry-level negotiations have the key role in setting pay, although there is still some co-ordination at national level, as well as a lot of room for variation at company or organisation level. The annual reports from the National Mediation Office (Medlingsinstitutet), which was set up in 2000, show that around 60 unions and 55 employers’ associations are involved in bargaining at industry level. However, most unions work together in permanent bargaining groups, like PTK for non-manual private sector workers (see section on who negotiates and when).

 

The existence of these permanent bargaining groups, which brings together unions from different confederations, helps to reinforce national bargaining co-ordination. It is further strengthened by the view that the pay increases agreed for manufacturing industry should set the upper limit for pay increases elsewhere in the economy. This idea that no pay increases should be higher than those for industries that face international competition goes back to the industry agreement of 1997 and is generally accepted by both unions and employers.[4]   

 

There is similar difference between manual workers and non-manual workers, whose pay is negotiated in separate agreements, in terms of the level at which pay increases are set. Manual workers are more likely to have their pay increases determined in the industry agreements themselves, while non-manual workers have their pay increases agreed locally. In 2019, pay increases for 42% of manual workers were set either entirely or partially in industry agreements (categories 6 and 7) and none were in category 1 – just local negotiation. In contrast just 1% of non-manual workers saw their pay set directly in agreements, and 55% manual workers depended on local negotiations for a pay increase.[5]

 

Agreements cover all employees of an employer, who has either signed an agreement or is a member of an employers’ association signing an agreement, whether or not the individual is a member of the union.

 

There is no mechanism for extending collective agreements to employers who are not party to the agreement. However, a high proportion (around 82%) of employees in the private sector work for employers who are covered by collective bargaining, as do 100% of workers in the public sector. As a result, overall bargaining coverage is high, at 88%, a figures which has remined virtually unchanged for 10 years.[6] 

 

Unlike many other countries, Sweden does not have a tripartite consultation structure bringing together unions, employers and the government. Swedish unions and employers are reluctant to see government encroachment into areas of industrial relations they consider should be reserved to them.

 

Who negotiates and when?

 

National-level agreements, which now only deal with the industrial relations framework have, in the past, typically been negotiated between the main private sector employers’ association SN, on one side, and LO, the manual workers’ union confederation, and PTK, the negotiating group of non-manual unions in the private sector, on the other. However, the agreement on employment protection, reached in December 2020, was signed by PTK and LO’s two largest affiliates, not LO as a whole.

 

At industry level, negotiations are between the employers’ associations – there are very few companies which negotiate directly with the unions, although the airline SAS is one – and national level unions. The unions work together in permanent negotiating groupings to draw up a common platform for negotiations with the employers, although individual unions are able to act individually and agreements are signed by individual unions.[7] These negotiating groupings include unions from all three union confederations operating in the negotiating area concerned, plus, in some cases, the managers’ union Ledarna.

 

Negotiations at company or organisation level on the implementation of industry-level deals take place between the individual employer and the local union organisation (“the club” – see section on workplace representation). However, as the ETUI study on collective bargaining points out, where there is no union club, a union official from the local or regional branch of the union will often negotiate how the deal is to be implemented.[8]  In addition, in some cases, pay increases will be decided in discussions between the employer and the individual employee. The National Mediation Office describes this as the “salary interview model”.[9]

 

Pay agreements typically run for three years. For a period following the economic crisis, agreements ran for shorter periods, but since 2013, the three-year cycle has returned. The COVID-19 pandemic meant a delay in negotiations on agreements due to start in spring 2020, but when the settlements were concluded later in the year, negotiators adjusted the length of the agreements so that they again ended in spring 2023, three years after the normal starting point. (Not all agreements have the same three-year cycle, but most do. In 2017, 497 agreements, covering 2.3 million employees were signed in 2017 – equivalent to almost three-quarters of all agreements and two-thirds of employees covered.[10]

 

Most agreements start in the spring, in March, April and May, and both sides normally try to reach a new agreement before the old one has expired. This is specifically stated as an objective in the industry agreement, as well as several others and, in the 2017 bargaining round, 76% of all employees were covered by agreements reached either before the old ones expired (31%), or within three weeks of their doing so (46%).[11]

 

The subject of the negotiations

 

As already stated, a range of issues, 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 national level bargaining.

 

Industry-level agreements primarily cover pay and working time, including details of both minimum rates and pay for more experienced workers, overtime and standby rates, the length and scheduling of working hours, and holidays and holiday pay. However, they also cover issues like pensions and training, pay for travelling time, the employer’s right to plan working time and the return of the long-term unemployed to the labour market.

 

Local level negotiations cover the implementation on industry-level agreements, and local union organisations are also involved in negotiating change at their workplace (see section on workplace representation).

 

Sweden does not have a statutory minimum wage, with both unions and employers agreed that pay levels should be determined through collective bargaining.

[1] For a detailed examination of collective bargaining in Sweden see Sweden: collective bargaining under the industry norm by Anders Kjellberg in Collective bargaining in Europe: towards an endgame, edited by Torsten Müller, Kurt Vandaele and Jeremy Waddington, ETUI, 2019

[2] Avtalsrörelsen och lönebildningen 2019 Medlingsinstitutets årsrapport, Page 162 Medlingsinstitutet, February 2020 https://www.mi.se/alla-vara-arsrapporter/  (Accessed 17.12.2020)

[3] Regeringen välkomnar las-överenskommelsen, SVT Nyheter, 4 December 2020  https://www.svt.se/nyheter/inrikes/statsministern-kommenterar-las-overenskommelsen (Accessed 17.12.2020)

[4] See, for example, Avtalsrörelsen och lönebildningen 2019 Medlingsinstitutets årsrapport, page 191 Medlingsinstitutet, February 2020 https://www.mi.se/alla-vara-arsrapporter/  (Accessed 17.12.2020)

[5] ibid

[6] Den svenska modellen i en oviss tid: Fack, arbetsgivare och kollektivavtal på en föränderlig arbetsmarknad by Anders Kjellberg,Lund University, 2020 Charts 14 and 15 https://portal.research.lu.se/portal/en/publications/den-svenska-modellen-i-en-oviss-tid(11ad3d7f-b363-4e46-834f-cae7013939dc).html (Accessed 17.12.2020)

[7] See for example the Swedish Unions within Industry (Facken inom industrin) http://www.fackeninomindustrin.se/om-oss/ (Accessed 17.12.2020)

[8] Sweden: collective bargaining under the industry norm by Anders Kjellberg in Collective bargaining in Europe: towards an endgame, edited by Torsten Müller, Kurt Vandaele and Jeremy Waddington, ETUI, 2019

[9] Avtalsrörelsen och lönebildningen 2019 Medlingsinstitutets årsrapport, page 133 Medlingsinstitutet, February 2020

[10] Avtalsrörelsen och lönebildningen 2017 Medlingsinstitutets årsrapport, Table 4.1  Medlingsinstitutet, February 2018  

[11] Ibid Chart 8.1

L. Fulton (2021) National Industrial Relations, an update (2019-2021). Labour Research Department and ETUI (online publication). Online publication available at http://www.worker-participation.eu/National-Industrial-Relations.