About Swedish labour market

Published

Monday 6 February 2012

Last updated:

Monday 6 February 2012

The labour market is regulated through voluntary agreements between the employer and employee organizations.

The Swedish government has long intentionally refrained from regulating the labor market in detail via legislation. For example, there are no laws at all regarding salaries in Sweden. The majority of regulation instead applies to voluntary agreements between unions and employer organizations, i.e. the organizations known as labor market parties.

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Legislation specifies certain basic conditions for everyone

There is regulation which governs minimum terms and conditions for employees. Employers may thus offer employees better terms than those specificed in the law, but not poorer.

Salaries and working conditions are often regulated in collective agreements

There is regulation which governs minimum terms and conditions for employees. Employers may thus offer employees better terms than those specificed in the law, but not poorer.

What happens if the employee and employer cannot come to an agreement?

The parties who sign the collective agreement are also responsible for complying with it. If the employee and employer disagree about the interpretation of an agreement or legislation that regulates working conditions, the parties first undertake to resolve the dispute by negotiating. The Swedish Labor Court is the highest decision-making body regarding such disputes.

If the labour market parties cannot agree on entry into a collective agreement through negotiations, the government can appoint a mediator. Labour measures such as blockades, boycotts, strikes, and lockouts (the employer's equivalent of a strike), may only be used where there is no collective agreement. They are used to put pressure on the other party.

From an international perspective, such actions are relatively uncommon in Sweden. When, for example, there is a strike, the union organizations support their members financially. The government must remain neutral during a strike or other labour market conflicts. Consequently, an employee involved in a strike does not have the right to unemployment compensation.

Collective agreements make the labour market more flexible

The advantage of a collective agreement is that it is more flexible than detailed governmental regulation. The agreements can be adapted to different industries and are easier to modify than legislation. By entering into collective agreements, companies can avoid job actions, thus contributing to a stable labour market.

For the Swedish model to work, both labour market parties must assume the burden of negotiating and complying with an agreement. Employer and union organizations are therefore more than mere interest groups. They bear great social responsibility.

It is important for both employee and employer organizations to have sufficient membership so as to represent the groups they claim to represent. In Sweden, about 70 percent of employees belong to a union organization.

Protect yourself from future unemployment

The so called unemployment insurance will help to protect you from some of the economical consequenses of unemployment. The unemployment insurance garantees the job seeker a ceratin compensation, but there are a number of conditions. One basic condition for this compensation is to be registered as unemployed at Arbetsförmedlingen (the Employment Agency).

As a member in an "a-kassa " (unemployment fund) you are better financially protected in the case of unemployment. Find out more through AEA (the unemployment fund for graduates in Sweden).

Above the basic security, the membership in AEA will through your membership in one of Saco's affiliated associations also give you an extra income insurance in case of unemployment. Turn to your affiliated association for further information about the various insurances. Read more about the Saco associations here.

Use the Public Employment Services

Even if you are not entitled to a compensation from an "a-kassa" (unemployment fund) it is still worthwile to contact the Public Employment Services for advice and guidance in job seeking and career development. Make an appointment and find out what the Public Empoyment Service can do for you. Read more here