Lex Laval revised in Sweden – to what effect?

After the EU Court of Justice’s judgement in the much talked-about Laval case, a provision was introduced in the Posting of Workers Act which meant it was no longer allowed to take industrial action in order to secure a collective agreement with a foreign company, if that company can show that their employees already receive the minimum provisions covered by the agreement. 

The problem with this is that the unions have no way of taking action against an employer who has not entered into a collective agreement, if it should turn out that this employer actually provides provisions of a lesser quality. 

The unions have therefore demanded to be given the right to take industrial action in order to force posted companies to sign agreements which confirm that they follow the minimum provisions of the collective agreement. Otherwise they can bluff without risking anything, and that is also happening, the trade unions say.

Confirmation agreement – or else strike action

This is what the government now wants to change. From 1 July it will become legal to force posting companies to sign such confirmation agreements, using industrial action as a last resort. This way, trade unions are given a document to show in a court of law if necessary. 

The question is how big a difference this will make in real life. The majority of posted workers are employed in the construction industry, and their employers mostly sign Swedish collective agreement already. And these are the ordinary collective agreements, no ‘posting agreements’ with minimum conditions. 

This is because the main contractor, most often a Swedish company, demands that all subcontractors must be bound by parts of the trade’s collective agreement. As a result, the new opportunities which the government wants to introduce will hardly lead to a revolution, at least not immediately.

It is also not certain that the Parliament will pass the proposed change. Right now it looks like it might get the support from the Sweden Democrats, which hold the balance of power, but the party has changed its mind before and the other opposition parties are opposed to the motion. Some argue the change would be in breach of EU law, others say that foreign companies would be discouraged from providing their services in Sweden.

More than just lex Laval

But the government’s proposal is not only about backing away from lex Laval, even if it is this retreat which gets the most attention in Sweden. The proposal also aims to implement the EU’s so-called enforcement directive from 2014. That should have been done by June last year, and only a few days before the bill was presented the government got a rollocking from the European Commission because of the delay. 

The directive aims to tighten the implementation of the original posting of workers directive, and prevent the rules being misused by cowboy companies. Improved administrative cooperation between the member states' authorities forms the basis for how this should happen. The posted workers’ opportunities to defend their rights in the country they work in are also to be strengthened. 

The government wants to do this by giving them the right, in a court of law, to claim the provisions which their employer has committed to provide, even if they are not members of a Swedish trade union. 

This represents an exception from the ordinary Swedish labour market rule, which says you need to be a member of the trade union which signed the collective agreement if you want to invoke this right. Major employer organisations are against this proposal too. Yet there seems to be little controversy surrounding the parts of the proposal which deal with how to implement the enforcement directive.