Observation (CEACR) - adopted 2012, published 102nd ILC session (2013)

Right to Organise and Collective Bargaining Convention, 1949 (No. 98) - Sweden (Ratification: 1950)

The Committee notes the information provided by the Government on the impact of legislative changes and the comments of the Confederation of Swedish Enterprise attached to the Government’s report. It further takes note of the supplementary comments dated 10 August 2011 and 13 November 2012 made by the Swedish Trade Union Confederation (LO) and the Swedish Confederation of Professional Employees (TCO). The Committee invites the Government to provide any further information it considers relevant in reply to these comments.

The Committee refers to its comments under the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), as regards the general appreciation of the impact of the legislation introduced in Sweden in 2010 in response to the European Court of Justice (ECJ) judgment in the case Laval un Partneri v. Svenska Byggnadsarbetareforbundet (Laval).

Article 4 of the Convention. Promotion of collective bargaining. The Committee notes the Government’s statement, in reply to the LO and TCO comments, that the new legislation places no restriction on collective bargaining but only the conditions under which industrial action can be undertaken (see under Convention No. 87). The Committee takes due note, however, of the further assertions made by the LO and the TCO that the conditions for trade unions to negotiate with foreign employers have deteriorated given that the obligation to register a representative for the business domiciled in Sweden has been removed with reference to EU law and the Services Directive. According to the LO and the TCO, the absence of any legal obligation to have a representative in the country poses a significant obstacle to the exercise of collective bargaining with foreign employers. The LO and the TCO add that this is of particular concern within the Swedish context where legislation on pay rates is nearly non-existent and wages and employment conditions are regulated to a great extent through collective agreements (collective agreements cover 90 per cent of the workforce). Moreover, the LO and the TCO indicate that the impact of the various restrictions ever since the Laval judgment can be seen in the statistics issued by the National Mediation Office. In 2007, 107 collective agreements were signed with foreign companies, in 2008 only 40, in 2009, 29 agreements were signed and in 2010 there were only 27. They state that there is no corresponding decrease in collective agreements for Swedish companies.

In reply to the LO and TCO comments, the Government refers to plans to submit a Bill, at the latest on 30 November 2012, whereby foreign employers must report that they post workers to Sweden and appoint a contact person in Sweden, who shall be authorized to receive notice on behalf of the employer. The contact person shall further be able to provide documentation demonstrating that the requirements of the Foreign Posting of Employees Act, as regards employment conditions for posted workers, are met. Trade union knowledge of posted workers in the country may facilitate negotiations for collective agreements. As to the impact on concluded collective agreements, the Government adds that there were 62 registered collective agreements concluded directly with foreign employers at the end of 2011. The statistics of the Mediation Office indicate that the Swedish Building Workers’ Union (Byggnads) concluded 33 collective agreements directly with foreign employers in 2011 (27 in 2010, 29 in 2009, 40 in 2008). An additional five foreign employers became bound by agreements with the construction workers’ union through membership in an employer’s organization in 2011 (15 in 2010). Byggnads concluded 107 collective agreements in 2007 when approximately 15 foreign employers became bound through membership in an employer’s organization. The Government adds that there is no analysis for the reasons behind these figures or information on the number of foreign employers and posted workers in Sweden. The Government observes, however, that the investigation of the parliamentary committee and the legislative proposal on reporting obligations will enable such analysis.

The Confederation of Swedish Enterprise (CSE) does not consider that the fact that a foreign employer established in an EU or EEA country is not, in certain circumstances, required to have a representative resident in Sweden represents a barrier to the right of collective bargaining. A foreign employer who posts employees in Sweden is subject to the rules on negotiating obligations in the Codetermination Act which apply to Swedish employers. The Confederation does support however the part of the Government’s proposal that introduces provisions in the Posting of Workers Act under which foreign employers who post workers in Sweden shall be obliged to notify the Swedish Work Authority if the activity continues for more than five days. As regards the reduction in collective agreements signed with Byggnads, the Confederation considers that this cannot be attributed to the changes in the law, given that the amended legislation only came into force in April 2010 and therefore could not be responsible for the reduction between 2007 and 2010. In Sweden, wage-setting is a matter for the labour market parties, largely through the signing of collective agreements in each sector. The Confederation has difficulty understanding the argument advanced by the LO and the TCO that the fact that, in situations involving posting of workers, they are only able to take industrial action to demand the minimum levels set out by collective agreements opens the door to social dumping. To the contrary, it appears that the unions want to demand higher wages for foreign companies than Swedish companies in similar situations.

On this last point, the Committee understands that the concerns raised by the unions are not related to a desire to have better terms and conditions of employment for foreign posted workers than those set out in collective agreements, but rather that they would like to ensure that those terms are comparable to those in the relevant sector and geographic area and are not based on an often non-existent central minimum.

In its latest comment, the LO and TCO consider the plans to submit a bill requiring foreign employers to appoint a contact person in Sweden would be an improvement but remain concerned that, even with a counterpart, there is no requirement that the representative of the employer will be mandated to negotiate and conclude collective agreements. As regards the statistics provided by the Government, the LO and the TCO consider that the most telling are those concerning the reduction in collective agreements concluded after the Laval judgment. In this regard, they indicate that the Byggnads concluded 356 collective agreements with foreign companies between 2004 and 2007 (about 120 agreements per year). After the ECJ judgment in 2007 creating a new legal situation on the labour market, the number of agreements fell dramatically. This situation was made even worse by the 2010 changes in the Swedish legislation.

The Committee welcomes the plans to submit a Bill, at the latest on 30 November 2012, whereby a foreign employer must report that it posts workers to Sweden and appoint a contact person in Sweden, who shall be authorized to receive notice on behalf of the employer and hopes that this will facilitate engagement in collective bargaining with foreign employers. The Committee requests the Government to indicate the developments in this regard in its next report.

The Committee further notes the comments of the LO and the TCO that there are an increasing number of “double agreements” in foreign companies which set terms at a very low level and then provide a second agreement only for presentation to the authorities and the trade union setting out better terms. The Committee further expresses its concern that foreign companies may be exempt from collective bargaining demands provided they only “show” that minimum pay and conditions pertain. The Committee requests the Government to reply to these comments and to continue to provide information on any measures taken or envisaged to combat this practice.