13 May, 2010
Trade unions in four important industrial sectors of Sweden – metal, pulp and paper, forestry, and food service – achieved ICEM-heralded contract language protecting the rights of full-time and permanent workers in wage negotiations in March and April 2010. The first-of-its-kind language, covering 550,000 workers in these sectors, will serve as a major deterrent in utilizing temporary workers hired through labour agency companies.
The language, varying in minor degrees from one sector to the other, was proposed as a bargaining priority by LO-Sweden, the Swedish Trade Union Confederation. It will serve as a very effective restraint, the ICEM believes, for the recent rush by Swedish employers to use temporary labour.
Prior to 1992, all such labour was provided by government-operated job centres. But a change in law that year, in effect, privatised such centres. Yet, the growth of the mega-agencies was slow to catch on in Sweden over the next decade, mainly due to a Nordic social ethic that rightfully grants life-long work and retirement benefits.
In the early years of the last decade, that slowly began to change. And with the coming of the financial crisis in mid-2008, the trend clearly shifted. Mass layoffs became the norm and in the second half of 2009, when even the slightest uptick in a company’s business caused a need for added staff, company after company relied on employment agencies to fill that need.
Swedish labour unions clearly saw their own need to protect the rights of full-time workers who were victimized by the crisis.
Language in the new collective agreements stipulates that employers have the obligation to negotiate with the respective union before turning to labour-hire companies. Those negotiations are to occur on the local level and must take into account permanent workers who have been made redundant and are on re-hire lists. If such workers are qualified for the jobs that an employer seeks to outsource to an agency, those workers must be re-hired or else the employer faces steep financial penalties. Thus, the effective deterrent is in place inside the collective agreements.
If the trade union and employer cannot agree on qualifications, the case goes to the national level where a joint panel will decide. (In one sector agreement, the national panel also consists of an independent mediator in the event the joint labour-management panel cannot agree.)
Employers face the risk that, if no agreement is made at the local level, and they do bring in agency workers and the national panel rules in favour of the redundant worker, the company ends up paying double salaries, with the redundant worker, in some cases, getting up to a SEK 65,000 judgment award. The employer generally has five days to halt the use of agency labour when such employment is challenged before the penalty applies.
One sector agreement contains a joint labour-management committee to monitor this specific aspect of the agreement in order to shape a “good practices” standard of employment regarding short-term contract and agency labour that is also intended to assure that there are no violations of the language.
All in all, this Swedish model to restrict temporary employment, curtail the exploitative nature of labour agency firms, and promote the concept of decent work through permanent and sustainable jobs is a good one. It is also a model that trade unions in other countries should closely examine.