Employees sue Ericsson for 40 million

Ericsson is being sued by a trade union because it allegedly failed to pay two employees sufficiently for a suggestion that earned the company 80 million kronor.

The union, IF Metall, says the two employees, who worked at the company’s Gävle fatory, presented the telecoms giant with the proposal in 1999. Their idea significantly reduced the time that machines were standing idle while material for new circuit boards was being fed in.

IF Metall calculated that Ericsson has earned 80 million kronor from the idea. According to the local collective agreement that applied at the time, employees who presented ideas for improvements would be rewarded.

If the proposals resulted in particularly valuable improvements, any resulting profits would be shared between the company and the person who made the suggestion.

The two employees who made the proposal have received some payment from the company, but according to the union the amount they received was too little.

“This is unacceptable behaviour from Ericsson,” said the union’s negotiator Darko Davidovic in a press release.

“They should obviously pay out the remuneration that the people who made the proposal have earned according to the company’s agreement.”

In the lawsuit lodged on Friday at the Labour Court, IF Metall says the two men should get 20 million kronor each.

Ericsson in Gävle has now removed the bonus system.


Ericsson suspends all Russia operations indefinitely

Swedish network equipment maker Ericsson said Monday that it was suspending all of its Russian operations over the war in Ukraine for the foreseeable future.

Ericsson suspends all Russia operations indefinitely

The telecom giant already announced in late February that it would stop all deliveries to Russia following Moscow’s February 24 invasion of Ukraine.

“In the light of recent events and of European Union sanctions, the company will now suspend its affected business with customers in Russia indefinitely,” Ericsson said in a statement.

The company added that it was “engaging with customers and partners regarding the indefinite suspension of the affected business.”

“The priority is to focus on the safety and well-being of Ericsson employees in Russia and they will be placed on paid leave,” it said.

READ ALSO: How has Sweden responded to Putin’s war in Ukraine so far?

Hundreds of Western firms ranging from Ikea to Coca-Cola, Goldman Sachs and McDonald’s have stopped operations in the country since the invasion, with French banking group Societe Generale announcing Monday it was selling its stake in Russia’s Rosbank.

Ericsson has around 600 employees in Russia, and is a “major supplier to the largest operator MTS and the fourth largest operator Tele2,” a company spokeswoman told AFP, adding that together with Ukraine, Russia accounts for less than two percent of revenue.

As a result, the equipment maker said it would record a provision for 900 million Swedish kronor ($95 million, 87 million euros) for the first quarter of 2022 for “impairment of assets and other exceptional costs,” though no staff redundancy costs were included.
Ericsson is due to publish its first quarter earnings on April 14.