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.