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Sweden: New jobs model for refugees and long-term unemployed

| Text: Kerstin Ahlberg, editor EU & arbetsrätt

The Confederation of Swedish Enterprise and the Swedish Trade Union Confederation (LO) have reached an agreement in principle to make it easier for refugees and long-term unemployed to find jobs in Sweden. To make the agreement binding, both organisations’ affiliates must accept it. It is also dependent on public financing of parts of the workers’ wages.

Centre-right parties in the so-called Alliance have long been arguing that the comparably high minimum wages set out in Swedish collective agreements make it more difficult to access the labour market for people with low education and little working experience. In August they presented a proposal for a new employment form and declared that an Alliance government would make passing this into law its highest priority, if the social partners could not agree on a similar solution.

Under the proposal, the newly arrived – i.e. refugees – in their first five years in Sweden and young people under 23 with interrupted upper secondary educations could be employed in temporary so-called inträdesjobb (entry jobs) for up to two years. This would be full-time employment, but wages would be 70 percent of the collective agreement’s lowest pay. 30 percent of working hours would be “considered to be spent learning the job”, but the employer would not have any responsibility to organise or pay for any education.

The proposal was met with expected opposition from both the government and trade unions, but it was also problematic from a legal point of view. Firstly, the kind of legislation proposed by the alliance parties would interfere with existing collective agreements, which is not allowed according to ILO conventions on the freedom of association and collective bargaining – except for in very unusual situations.

Secondly, the proposal was probably not compatible with anti-discrimination legislation, since all newly arrived and youths who have not finished their upper secondary education would have to settle with 70 percent of normal wages, regardless of whether they could have actually been hired on a normal contract.

However, in early November the Confederation of Swedish Enterprise and LO agreed in principle on something the organisations call etableringsanställning (establishing-employment), which is similar in several ways to the centre-right parties’ inträdesjobb. One major difference, however, is that the employee would be paid the equivalent of the normal collectively agreed minimum wage after tax, but the employer would pay only 8,000 kronor (€809) while the rest would be covered by the state.

The new employment form would be available for newly arrived who have been granted residence permit in Sweden in the past 36 months, young people under 25 who have been unemployed for at least six months and people over 25 who have been unemployed for more than a year. During the establishing-employment, which can last up to two years, the employees have the right to study Swedish during working hours without having their salaries docked. After two years, the employment should be turned into a rolling contract. A commission will be established to make sure the employment form is not misused.

To make the agreement binding, it must be accepted by the organisations’ affiliates. Another precondition, as mentioned, is that the state agrees to pay part of the salary and that employers are exempt from paying pay-roll tax for those in establishing-employment. The government has already indicated it is ready to contribute, but some details still remain to be sorted out.

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