Swedish labour model set for a facelift after 70 years

Sweden’s main employers’ and employees’ associations on Monday announced plans for a major revision to the agreement which has governed Sweden’s labour relations for seven decades.

The Saltsjöbaden Agreement (Saltsjöbadsavtalet) has served as the primary wage bargaining agreement governing Swedish employer-employee relations since it was signed in 1938 at the waterfront resort on the outskirts of Stockholm which shares the name of the agreement.

Representatives from the three main parties to the agreement—the Swedish Trade Union Confederation (LO), Federation of Salaried Employees in Industry and Services (PTK), and the Confederation of Swedish Enterprise (Svenskt Näringsliv)—have agreed that the time has come to revisit—and revise—the 70 year old agreement.

The stage for updating the agreement was set after LO’s governing board said yes to formal negotiations, something to which PTK and Svenskt Näringsliv had already agreed.

“For the most part, this has to do with taking back power over the labour market from the politicians. We parties should determine the rules of the game governing Sweden’s labour market,” said Urban Bäckstrom, head of Svenskt Näringsliv.

The three parties have come to an agreement on the basic conditions governing the planned negotiations. The challenges awaiting them at the negotiating table include how to find common ground for each of their respective key issues.

Employers have long had opinions about rules which give longer-tenured employees preference over new hires when a company faces layoffs. Also of interest to employers is a review of guidelines on how unions apply their right to engage in labour conflicts, not the least when it concerns sympathy measures taken by other unions as a sign of solidarity when a fellow union engages in a formal labour conflict.

“We are not out to try to change the constitutionally prescribed right to labour conflicts. Rather, it’s about how the rules governing conflicts are applied and when they can be initiated,” said Bäckström, who wants to see a regulatory framework for the 21st century labour market.

The union wants to discuss issues related to retraining and re-employment measures following lay-offs, as well as worker protections. LO head Wanja Lundby-Wedin speaks of a turbulent labour market with younger people who hop from job to job.

The parties’ hope they can craft a new agreement before the end of the year.