New proposal for improved control of posted workers’ terms and conditions

“This strengthens the collective agreement’s position and gives better trade union control over posted workers’ terms and conditions. It also improves posted workers’ chances of in the very least enjoying Swedish minimum terms. It also makes it easier to predict what is needed during a posting to Sweden and the proposals are also compatible with EU law,” said Marie Granlund, a Social Democrat MP and chair of the Posted Workers Committee during a press meeting at the Rosenbad government headquarters. 

The parliamentary Posted Workers Committee, made up of representatives from all political parties in the Swedish parliament, was established in 2012 by the centre-right government. Changes were made to the committee when a new government came to power last year. Marie Granlund became the new chair and additions were made to the directive. Lex Laval, i.e. the legislative changes introduced in 2010 in the wake of the so-called Laval case, would still be reviewed, but now with the addition: “to protect the Swedish labour market model and strengthen the collective agreement’s position in situations involving the posting of workers, while adhering to EU law”.

“Sweden traditionally solves labour market issues through collective agreements. This model has served us well and has been a pillar in the Swedish model,” said Marie Granlund.

It was a Vaxholm school construction project which changed the rules of the Swedish labour market. In the summer of 2004 a subsidiary of the Latvian firm Laval Un Partneri had just started building the Söderfjärds school. The Swedish Building Workers’ Union negotiated with Laval, who had not signed a collective agreement. When Laval signed a Latvian collective agreement, the Union blocked the building site for more than 100 days with the support of the Swedish Electricians’ Union. After several rounds, which also saw Laval taking the unions to the Swedish Labour Court, the saga ended in the EU Court of Justice. In 2007 it ruled that the Swedish Building Workers’ Union’s industrial action against Laval was in breach of EU law, and both the workers’ union and the electricians’ union had to pay major damages. The decision also meant that posted companies have the right to use their home country’s collective agreements in other EU countries they might be operating in.

“The judgement is a great challenge to the Swedish model, because it implies that the way in which we regulate minimum wages cannot be applied to foreign companies working in Sweden,” Professor Niklas Bruun at the Hanken School of Economics in Helsinki told the Nordic Labour Journal on 2 March 2008. He also pointed out the fact that this was the first time the right to take industrial action became part of EU law.

In 2010 Swedish legislation was changed to match the EU judgement, the so-called Lex Laval. The legislation has been heavily criticised by trade unions and the Social Democrats, and now, according to the proposals from the Posted Workers Committee, it will be torn up.

The committee suggests that trade unions are given the right to resort to industrial action in order to push through a collective agreement with minimum wage demands, a so-called posted workers collective agreement. The so-called rule of evidence will disappear. It means that a foreign employer who can show that he or she offers conditions which are as good as could be expected, will not have to sign a collective agreement. 

According to the proposal, within ten days the posted company should also appoint a representative with the power to negotiate and sign collective agreements if a trade union demands it. The proposal says trade unions should be able to demand documentation which proves that the posted employer adheres to minimum terms and conditions.

The Posted Workers Committee also proposes to strengthen posted workers’ rights. They should be allowed access to Swedish courts in order to demand minimum terms and conditions according to collective agreements, regardless of whether they belong to trade unions that have signed agreements or not. The committee also proposes that posted workers are given better rights in the case of workplace injuries, as well as the opportunity to sign life insurance policies.

“That is a very big change compared to what we have today,” said Marie Granlund.

For the sake of transparency, in certain instances the Swedish Work Environment Authority will assess and analyse what constitutes minimum terms and conditions in the Swedish collective agreement. Today Swedish trade unions must report their demands for minimum terms and conditions to the Work Environment Authority, if not the authority will interpret which conditions apply within a certain trade.

“Not everyone has done that, and that leaves it to the Work Environment Authority to interpret minimum terms and conditions. This is not an optimal solution, but as long as the parties cannot find one, this is one way of solving it. Perhaps this will also apply extra pressure on the parties,” said Marie Granlund.

The proposal still has some way to go before it is meant to come into force on 1 January 2017. Representatives from all political parties on the centre-right have voiced their reservations. Swedish businesses and construction industry representatives have been critical too, partly because they feel this will give disproportionally large powers to trade unions, and that it hinders the freedom of movement.

“I have not noticed any major conflicts within the committee, and I hope the centre-right parties think again before the work on a government bill begins. If you really want to stand up for the Swedish model, it would be good to try to find a solution. I hope people think about Sweden and about the foreign workers who are actually very badly protected,” said Marie Granlund. 

“We also need to be braver in Sweden. We should fight for what we feel is important, not blindly accept what the EU law says.”