High lay-off notices ‘a deliberate tactic’

Swedish companies are serving redundancy notices in artificially high numbers as part of a tactic to circumvent employment protection laws, claims a chief analyst at the national job agency.

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.

Member comments

Become a Member to leave a comment.Or login here.