HRM603:COMPARATIVE STUDIES IN

INDUSTRIAL OR EMPLOYMENT
RELATIONS

INDUSTRIAL OR EMPLOYMENT RELATIONS IN

SWEDEN
 CONTENT
1. Objectives
2. Background
3. Industrial Relation Parties & Institutions in Sweden
4. Features &Process of ER & IR in Sweden
5. Current Changes/Trends in ER & IR in Sweden
6. Tripartite Concertation
7. Trends Towards Decentralization
8. Summary & Conclusion
 OBJECTIVES
At the conclusion of this topic, you should be able to:

1. Discuss and identify various ER & IR parties and

institutions in Sweden.

2. Discuss and identify the main features and processes of

Swedish ER & IR System.

3. Identify and discuss current trend/changes in ER & IR in

Sweden

4. Compare and contrast the main features of Swedish ER &

IR system with other Countries employ ER/IR Systems
 SWEDEN BACKGROUND
 Industrialization started in early 1900s
 It was a poor agricultural country
 Population: 10.202 Million (est. 2020- CIA, Fact book
2020)
 Labor Force: 5.361 million (2017 est.)
 Unemployment rate of – 6.7% (2017 est.- CIA, Fact
book 2020)
 PARTIES TO IR – TRADE UNIONS
 Origins- in the early 1880s- 1st unions were -'craft unions' but by
1910- 'industrial unions' became dominant

 1881-1930- mainly blue collar unions, but after 1930s- there was
growth of white-collar unions

 No need for unions to 'register'- Unlike in other countries

 Very few 'new unions' most are old unions- little change

 TUs have right to access company information/records and the

right to initiate bargaining on any proposed major changes by the
employers before bargaining take place
 TRADE UNIONS (CONT)
TU Density
 Has the highest TU density in the world – 70 % - why- because no
barriers to join TU

 About 79% of blue-collar employees and 78% of white-collar

employees and professionals are unionized.

 Currently it is decreasing - 1997 – 91%; 2004 – 78%; 2015- 70%

 ‘Blue -collar’ workers union – decreasing

 ‘White-collar’ and professional staff unions – increasing

 TRADE UNIONS (CONT)
3 Main TU Confederation (Umbrella Organization)
1. Swedish Trade Union Confederation (LO) –formed 1898
 It represents the blue-collar workers. It covers 90% of Blue -Collar
unions-very high density

 It has membership of 1.5 million.

 16 blue collar industrial unions are affiliated to LO

 LO involves in CB indirectly on behalf of its members -major

TUC
 TRADE UNIONS (CONT)
3 Main TU Confederation (Umbrella Organization)
2. The Swedish Confederation of Professional Employees (TCO)
 Formed in 1944 with 950,000 members

 Largely for white collar unions - only strong in Civil Service

 18 unions are affiliated to TCO – largest of unions are: Union of Clerical

and Technical Employees (with 365,000 members), Teachers' Union
(with 225,000 members), Union of Municipal Employees (with 175,000)

 It does indirectly take part in CB

 TCO have around 12 billion Swedish dollars in their ‘strike reserve

funds’ for its members.
 TRADE UNIONS (CONT)
3 Main TU Confederation (Umbrella Organization)
3. Swedish Confederation of Professional Associations (SACO)
 Small than other confederation – 487,928 members

 For civil servants and professional employees with academic

degrees

 26 associations are affiliated, of which ‘Association of Graduate

Engineers’ (with 98 000 members) and National Union of
Teachers’ (with 80 000 members) are the largest affiliated unions
 Indirectly involves in CB
 TRADE UNIONS (CONT)
Functions OF TUC
 Support & represent their members

 Settle disputes between member TU by a binding decision of the

confederation

 Indirectly involves in CB.

 Advise member unions before Signing industry wide CA

 Swedish Trade Union Confederation (LO) - represents its affiliated

unions in the area of social/economical policies & most influential
TUC in Sweden.
 PARTIES – EMPLOYERS ASSOCIATION
The three main employer organizations:

1. Confederation of Swedish Enterprise - which was founded in 2001 after a

merger between the Swedish Employers’ Confederation and the Federation
of Swedish Industry

 It represents employers in the private sector and has a membership of about

49 employer organizations or trade organizations from different industries

 It represents 60,000 small, medium and large-sized enterprises employing

about 1.6 million employees. Its density rate was estimated at 80% in 2008,
surpassing the trade union density in the private sector
PARTIES – EMPLOYERS ASSOCIATION (CONT)

2. Swedish Association of Local Authorities and Regions

 It represents the governmental, professional and employer-

related interests of Sweden’s 290 municipalities, 20 county
councils and over 1 million employees.

3. Swedish Agency for Government Employers

 A state agency, it is responsible since 1994 for the employer

policy of agencies in the public sector at national level and
negotiates on behalf of about 250 public authorities.
 THE ROLE OF STATE (CONT)
 Swedish government is a limited constitutional monarchy with
a parliamentary system.
 Head of the state - a monarch without formal power
 As head of state, King or Queen is the representative of the
country as a whole, and in that capacity performs only
ceremonial duties and functions but they do not exercises
political power and does not participate in political life.
 Head of the Government is the Prime Minister, who appoints
his/her cabinets.
 Since 1971, Sweden has had a unicameral (one-chamber) in
creation of laws and legislations.
 THE ROLE OF STATE (CONT)
 Plays a very important role in ER & IR environment.

 Traditionally, IR have been left to the employer and unions ( State/

Govt. played little role) .

 However, after 1970s , government has taken greater role in IR

and number of new legislations were introduced, constituting a
new employment relations framework.

 These laws have dealt with issues such as industrial democracy,

the work environment, security of employment and union rights.
 THE ROLE OF STATE (CONT)
Various laws enacted by the states are:

 Collective Bargaining Act (1928) – to promote CB process between employers

and TU in order to reduce industrial conflicts.

 The Codetermination Act (1976) - regulates employee consultation and

participation in working life.

 It is the main law for the system of collective regulations; it is a framework law
that must be implemented through collective agreements.

 It gives trade unions, as collective agents for their members, the right to elect their
representatives, receive information or be consulted about management decisions.
 THE ROLE OF STATE (CONT)
The Employment Protection Act (1982)
 Is a fundamental law in the Swedish labour market regulating
when and how an employee can and cannot be dismissed.
 The law protects employees from being given notice or
dismissed without objective reasons, such as shortage of work
or serious misuse.
 The act also gives the employer considerable responsibility for
finding suitable replacement employment for the worker before
the person can be fired.

 This security of Employment Act increased the power of unions

 THE ROLE OF STATE (CONT)
 Another important law is the Work Environment Act (1978)
regulating the work environment in the labour market.

 Another most important feature of ER & IR legislation was the

establishment of the Labour Court.

 It was established in 1928 and is a tribunal to settle legal

disputes on labour issues.

 Its members include representatives from government,

employers and unions.
 FEATURES & PROCESSES OF ER/IR
IN SWEDEN
Collective Bargaining
In Sweden collective Bargaining are entered into different levels:
 Nation-wide collective agreements are concluded at industry
level, and supplemented by local collective agreements
concluded at enterprise level

 National collective agreements are often concluded for a

definite term of two or three years.

 The wage increases are set at national and industry level, and
implemented at local level.
FEATURES &PROCESSES OF ER/IR
IN SWEDEN (CONT)
Collective Bargaining

 In Sweden, collective bargaining is the sole system of wage

formation, both in the private and public sector.

 The trade unions at sectoral level handle most of the pay

bargaining, in negotiation with the social partners on the
employer side.

 Many employees have some kind of individual wage

flexibility, for example, based on work performance
FEATURES &PROCESSES OF ER/IR
IN SWEDEN (CONT)
Collective Bargaining (cont)
 Recently, there has been a shift towards decentralization and
individualization, resulting in important changes to collective
bargaining structure and employment relations

 In 1997 - the Agreement on Industrial Development and Wage

Formation (Industrial Agreement) - has a normative role in the
collective bargaining rounds for wages.

 There are two levels of collective bargaining in relation to pay,

wage formation and other working conditions: national or
sectoral level and local (company) level.
FEATURES &PROCESSES OF ER&IR
IN SWEDEN (CONT)
Employee Involvement/ Employee Participation
 Three levels of employee participation:

1. Shop floor participation:

Aims to enhance the influence of individuals over their own
work. Companies have improved the design of workplaces and
job content, to create a better work environment and increase
the opportunities for workers to influence their own job

2. Company Participation
Refers to the influence of employees over their workplace
through the unions. At this level, union representation began
when the works council agreements were signed in 1946.
FEATURES &PROCESSES OF ER/IR
IN SWEDEN (CONT)
 These agreements were replaced in 1977 by the co-
determination at Work Act

 Co-determination Act regulates on issues such as the right of

association, and

 Bargaining and rules concerning mediation and conciliation of

disputes

3. Financial participation
Where the employer also has an obligation to provide information.

Unions have access to virtually all company documents

 FEATURES &PROCESSES OF ER/IR
IN SWEDEN (CONT)
Dispute settlement
 The Swedish government plays only limited role in setting
disputes

 It is also common that all disputes are referred to the central level
of negotiations rather then by industrial disputes

 Disputes are usually two categories which are the Rights

disputes and the Interest disputes.

 In Sweden, rights disputes are not settled by industrial action but

rather by the National Labor Council
 FEATURES AND PROCESSES OF
ER/IR IN SWEDEN (CONT)
Dispute settlement (cont)

 A dispute concerning the content of an agreement must be solved by

bargaining or by the courts; it is generally illegal to take industrial action
during the period of agreement

 A strike or a lock-out can be called legally only if during negotiations for a

new agreement it has proved impossible to reach agreement and if a period
of mediation has failed.

 The right to take industrial action is also limited by collective agreements

according to which conflicts must not have a disruptive influence on
functions important to society
 FEATURES AND PROCESSES OF
ER/IR IN SWEDEN (CONT)
Hours of Work

The statutory maximum weekly working time is 40 hours but in

many cases it is reduced to between 38 and 35 hours by
collective agreements

 Minimum working age in Sweden is 15 years.

 CURRENT TRENDS/ ISSUES
 Introduction of HRM - HRM has also widely practised in Sweden

 Technological Advancements – increase in unemployment

 Global shift of Production – negative impact – loss of jobs

 Reducing working works- 35 hours/weeks (in some collective

agreements)

 Labour Market Flexibility e.g., work hours – for working women.

 CURRENT TRENDS/ ISSUES (CONT)
 Increase in part-time, causal employment.

 Decline in Trade Union density.

 Increase in Services Sector Jobs.

 The trends towards individualization and decentralization

have resulted in a strengthening of the individual employment
contract (and a corresponding weakening of the collective
agreement).
 TRIPARTITE CONCERTATION
 In Sweden, tripartite negotiations are rare because the
social partners do not welcome the government or any
other party intervening in collective bargaining.

 The idea of self-regulation through collective

bargaining by the social partners is strong in Sweden
 TRENDS TOWARDS
DECENTRALIZATION
 Sweden’s structure of collective bargaining has become more

decentralized during the last 15 years.

 The social partners tend to delegate the power to negotiate

wages and working time to the local level.

 Some collective agreements are concluded without any

definite figures on pay or only specifying guarantee levels,
thereby leaving it to the local parties to decide the details in
their negotiations for wage formation and the setting of wage
rates
 TRENDS TOWARDS
DECENTRALIZATION (CONT)
 The employer and trade union confederations still conclude
certain types of cross-industry agreements, such as pensions and
collective insurance.

 The employment transition agreement has become important, not

least in times of financial crisis.

 Through this agreement, a percentage of the wage sum is paid

into a fund – known as the Employment Security Council
(Trygghetsrådet, TRR) – which finances measures to help
redundant workers to get a new job or education.
 TRENDS TOWARDS
DECENTRALIZATION(CONT)
 In the event of redundancy or dismissal, TRR is able to offer
both employers and trade union representatives support and
advice.

 Similar agreements apply in the public sector, with the

Employment Security Fund (Trygghetsfonden).
 SUMMARY & CONCLUSION
 Background – presents an interesting background on Swedish
economy

 Three parties to IR and their Roles – featured key

roles/functions of key actors in IR/ER

 Main features of ER/IR – Works Council – provides legal

machinery/framework to deal with IR/ER

 Collective Bargaining – raises a lot of interesting issues in

Swedish ER/IR system

 Employment trends- individualization, part time workers

SUMMARY CONCLUSION & (CONT)
 A main agreement between the parties at national level defines the
framework of their roles and the regulation between them.

 This agreement – Saltsjöbadsavtalet – is the foundation for the

cooperation between the social partners in the Swedish labour
market model (SE0811029I).

 At sectoral level, general agreements with guarantee or minimum

levels are negotiated for pay and working time.

 These sectoral agreements are indicative and set the parameters

for negotiations at local level, where more detail is provided in
local collective agreements.
 BIBLIOGRAPHY

 Bamber, G., Lansbury, R. & Wailes, N. (2004). International and

Comparative Employment Relations: globalization and the
developed market economies. NSW, Australia: Allen & Unwin.
 
 National Labour Law Profile: Sweden. Retrieved March 19th , 2020,
from
https://www.cia.gov/library/publications/the-world-
factbook/geos/sw.html

 Sweden Economy Information. Retrieved March 19th , 2020, from

http://www.traveldocs.com/se/economy.htm.