• Sweden edition

High lay-off notices 'a deliberate tactic'

Published: 22 May 2009 16:38 GMT+02:00
Updated: 22 May 2009 16:38 GMT+02:00

Firms also distort their lay-off forecasts in order to get around the "last-in, first out" principle enshrined in the Employment Protection Act (Lagen om Anställningsskydd - LAS), the Swedish Public Employment Service (Arbetsförmedlingen) says in a report to the government.

The employment agency also states that many companies choose to exaggerate redundancy figures to avoid going through the same process twice, for both practical and psychological reasons.

By announcing major lay-offs firms strengthen their hand ahead of negotiations with trade unions, according to Clas Ohlsson at the employment agency. Less than half of all redundancy notices result in actual lay-offs.

"It's simply a way of creating a strong negotiating position in relation to the unions," said Ohlsson.

The number of redundancy notices has little effect on the actual unemployment statistics, according to Clas Ohlsson. But they are a good economic indicator as they provide an insight into a company's plans for the future.

"A lot of the redundancy notices relate to industrial workers, who still constitute quite a small group among the unemployed," he said.

Veli-Pekka Saikkälä, a negotiator with the Swedish Metalworkers Union (IF Metall), said the tactic of announcing excessive redundancies was unlikely to achieve its goal of weakening the position of the unions.

"I think the exceptions they're making to the turn-taking rules are ones that they would have made anyway. The industrial sector is hardened; we're used to companies making all sorts of threats about lay-offs, closures or moving abroad," he said.

13,000 people were given notice of redundancy in April, compared to 4,800 people in the same period last year.

TT/The Local (news@thelocal.se)

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Your comments about this article

20:21 May 22, 2009 by Russ Cobleigh
I think most of these companies do as they please. They want to send most of the jobs to china where the workers are paid less. I worked at lesjöfors banddelajer and they laid me off even though I was diagnosed with KÅL and had been there for eight years.
10:24 May 23, 2009 by voidplay
Yes you are right numbers, money and statistics play a more important role than anything else. But then the world is globalised and we can not ignore that. It is always the cheapest, fastest and strongest bidder who wins.
14:03 May 23, 2009 by bocale1
This is exactly where the politic should stand on, making sure that the private companies do not forget their social responsibilities. WE should not forget that those companies, that now are trying to move everything to Asia to save costs, become successful thanks to the investments made by our countries, paid by our people with their taxes. And we are still the ones buying most of their products. Using the general economic negative climate to justify additional increase of profitability is definitely unacceptable.
11:26 May 24, 2009 by spy
Swedish employers are just waking up to the fact that if their staff arrive for work at 0830am stop for an hour(+) at lunch go home at 4pm then they are probaly not working at full capacity. . . I am sure that there is scope for the average worker to be more productive, which would make Swedish companies more competative. The Swedes enjoy the cheap products that open market forces bring but show protectionist tendancies towards Asia. You can not have it both ways!
09:36 May 25, 2009 by Alannah
I agree with "Spy". Starting work with a fika, taking a 1.5 hour lunch and having another few fikas during the day, leaving at 15.00 to pick up kids from dagis, plus an average of one day a week working from home is probably not working at full capacity. So, from the companies' perspective, they can probably easily manage with a few less people. It's nice for employees to work in such a worker-friendly environment but market conditions are tough right now, and like other countries, Sweden and Swedish companies, also have to adjust accordingly.
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