“It's bloody awful and senseless that this has happened,” Per Persson, head of the Stockholm-Gotland chapter of the Hotel and Restaurant Union (Hotell- och restaurangfacket - HRF), told The Local.
“The big problem is the room for manoeuvre is so huge that things like this can happen even at a big corporation like McDonald's. You have to wonder what smaller, private restaurants can get away with.”
Persson's comments come following revelations that two managers at a McDonald's restaurant allegedly sold work permits to immigrants from Pakistan who were then forced to pay up to 100,000 kronor ($15,000) to keep their jobs and stay in Sweden.
On Monday, the Aftonbladet newspaper reported that two more McDonald's managers were likely involved in the scheme which one union official told the paper was a "slave relationship".
The growing scandal has angered union leaders who claim the government has ignored their concerns that companies are routinely abusing labour migration reforms introduced in 2008 which make it easier for Swedish companies to recruit workers from outside the European Union.
“It is outrageous and shameful,” Hotel and Restaurant Union president Ella Nilla said in a statement.
"But this is just the tip of the iceberg. We know that unscrupulous employers exploit many immigrant workers. That it has happened at McDonald's just shows the size of the problem.”
A 2011 report by the OECD praised the reforms for the most part, but pointed out that Sweden needed to implement stronger controls to protect against abuse of the system and the mistreatment of workers.
The reforms have resulted in an increase in the number of people seeking work permits in Sweden, but the union argues the change has also opened the door to more exploitation of workers by giving employers too much power.
“If the workers protest or turn to the union they are fired and lose their right to stay in Sweden. The system created by the government means that the employer can decide who can stay or not,” Nilla said.
"Who dares to protest against bad working conditions and low wages in that situation?"
McDonald's has suspended the two managers first suspected of selling work permits as police investigate the suspected case of profiteering.
“After we received tip offs and made our own inquiries, we filed a report with the police," McDonald's press officer Håkan Ström told The Local.
"Due to the police investigation and out of respect to those involved, we can't say anything more.”
The managers could face four years in prison if they are found guilty.
While McDonald's maintains the work permit abuse is limited to the two managers currently under investigation, Aftonbladet reported that McDonald's in Sweden sought work permits for 209 Pakistanis over the last three years.
During the same period, the company received work permits for 68 workers from outside the EU, according to figures from the Swedish Migration Board (Migrationsverket).
While employers must advertise jobs and show they can't be filled before recruiting a worker from outside of Europe, no one ever checked if McDonald's received any applications for the jobs eventually filled by foreign workers.
"Since 2008, no agency has been in charge of checking them. Theoretically, it may be that there many people in Sweden who could perform a job at McDonald's, but McDonald's nevertheless took in people from outside of Europe," Migration Board division head Alejandro Firpo told the TT news agency.
Meanwhile, the union claims that 9.3 percent of its members are out of work, according to Aftonbladet.