One in five construction workers in Sweden are posted

It was only on 1 July this year that Sweden made it mandatory for companies which posted workers to the country to report this fact to Swedish authorities. Since then, foreign employers have been obliged to register with the Swedish Work Environment Agency and leave information about the posting, the posted workers and the employer’s contact in Sweden. Thus, so far there are no official statistics to show how many workers have been sent to work in Sweden.

How does Lex Laval work?

This has been a problem for the parliamentary committee responsible for investigating how the so-called lex Laval really works. The committee therefore asked the social partners to help gather the facts. They have no proper statistics either and can only offer estimations, while the Swedish Trade Union Confederation (LO) now considers it has good enough information to publish the report ‘Guest in reality – on posted workers in practice’ (only in Swedish). 

The report is based on a survey of all divisions and regions among all member unions apart from one. 80 percent responded, representing around 90 percent LO affiliate members. The report also includes interviews. Still, the authors underline that the result is only based on estimations and that no union has a full overview over the scale of the posting of workers. 

Construction and forestry biggest on posting

With that in mind, the authors conclude that more than 18,000 workers from around 800 foreign companies were posted in the LO area when the survey took place. The majority, around 15,000, were working in the construction industry. This means the number of posted workers in that industry was nearly as high as one fifth of all the working members of Byggnads – Sweden’s main union for construction workers. 

Forestry came second, with around 1,200 posted workers, which represents just over 10 percent of the industry’s total workforce. In all other areas the posted workers made up less than one percent of the total workforce.

The length of a posting varies from industry to industry and depends on the type of posting. The average period varies between one month and one year. Construction projects can run over long periods of time, of course, but it appears to be common to change the workforce every six months. If the workers leave Sweden at the end of that period, they do not have to pay income tax here. But in the construction industry it is hard to control whether the workers or their employers actually do go home, or whether they move on to another project elsewhere in the country. There are suspicions that employers exploit this in order to avoid Swedish tax.

3,700 self-employed

Most of the workers came to Sweden to work for the company they were employed by. Only one in five were hired out by temporary work agencies, and these were mainly found in certain industries like agriculture and forestry and the food industry. The unions also said there were 3,700 foreign workers who act as self-employed. It is very difficult for the unions to know whether these really were self-employed or should be counted as employees and be subject to collective agreements and other employment regulation.

LO’s survey also included questions regarding trade union activities when it comes to the posting of workers. Mapping the extent of postings is just the beginning of the parliamentary inquiry. The main task is to examine whether the social partners can safeguard the rights of workers in light of the law changes that came into effect as a result of the EU Court of Justice ruling in the Laval case. The law on posted workers is still dependent on having trade unions police the situation – there is no control from the authorities – but after the law was changed the unions have no right to force foreign companies to sign up to ordinary Swedish collective agreements. They can only take industrial action on the basis of demanding that the employer pays the minimum wage as stipulated in the collective agreement along with certain other minimum terms. Also: if the company can show that the employees already enjoy ‘essentially’ the same benefits as stipulated in the collective agreement, it can refuse to sign any agreement with the Swedish trade union.

Many sign collective agreements

Despite this, relatively many of the foreign companies are ready to sign agreements. Just four in ten LO affiliates say companies have refused to sign collective agreements. What is more, the agreements that are signed are usually so-called application agreements, where the employer undertakes to apply the sectoral agreement in full not ‘posted workers agreements’ with minimum terms. One explanation is that many domestic companies that engage foreign contractors or temporary work agencies demand that these must adhere to Swedish collective agreements.

When the foreign companies refuse to sign agreements, their most common argument is that their employees already receive wages and other benefits which are similar to the Swedish ones. It is often difficult for the trade union to check whether this is true. In many cases the employer has not provided any documentation at all. In other cases trade unions have suspected employment contracts and other information presented to them have been false. They suspect there are two sets of documents – one to show in Sweden and one, with worse conditions, which really counts. But because the act on the posting of workers does not include clear rules on which proof the employer must present, it is risky for the trade union to call for industrial action in order to force an agreement. After the Laval conflict this has not happened at all, the authors of the report note.

The fact that quite a few companies still sign up to collective agreements in Sweden does not mean everything is as it should be. The main problem is that it is very difficult to check whether the employer is really sticking to the agreement when the posted workers are not members of a Swedish trade union. In the Byggnads union they believe companies are aware of this, and that they have learned how to ‘fix a licence‘ to access the Swedish labour market by signing agreements which they do not adhere to.

LO proposes law changes

LO’s report concludes with a range of suggested changes to the law. Top of the list is to make the main contractor responsible for making sure all subcontractors involved in a project is following existing legislation and agreements. The Byggnads union, which represents the industry where most of the posted workers end up, is not content with simply waiting for (highly uncertain) changes to the law. One of the union’s demands in this year’s bargaining round with the employer organisation the Swedish Construction Federation was that the new collective agreement should include provisions on extended responsibilities for main contractors. The employers did not agree to this, but the parties agreed to establish a working group which will come up with new rules “in order to get to grips with irregularities in the trade”. The group will study systems and solutions in other countries, “for instance the Norwegian model covering contract work”. The final report must be finished no later than on 15 February 2014.