Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) - Sweden (Ratification: 1949)

Observation (CEACR) - adopted 2022, published 111st ILC session (2023)

Legislative developments. Posting of workers. In its previous comment, the Committee had requested the Government to provide information on the application in practice of the Posting of Workers Act, 2017. The Committee notes detailed information provided by the Government and refers in this respect to its comments on the application of Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

Other developments. In its previous comment, the Committee requested the Government to provide details on the proposals made by the inquiry appointed to review the exercise of the right to industrial action as well as on the bill drafted by the social partners to address the issues in relation to the exercise of the right to strike. The Committee takes due note of the Government’s indication that following the inquiry, the Ministry of Employment decided to proceed with the proposal submitted by the social partners and submitted a bill entitled “Extended obligation to keep the peace in workplaces where there is a collective agreement and in the event of legal disputes” to the Parliament. The Bill was adopted and the amendments to the Act on Co-Determination in the Workplace, which set forth conditions under which the right to industrial action against an employer bound by a collective agreement could be exercised, entered into force on 1 August 2019. The Committee notes the adoption and entering into force of this new law and requests the Government to provide information on developments under the 2019 amendments, including any situations in which the right to industrial action was exercised and situations in which it was not.

Observation (CEACR) - adopted 2018, published 108th ILC session (2019)

Legislative developments. Posting of workers. The Committee recalls that in its previous comments it had noted with interest that, a parliamentary committee set up in November 2014 to consider legal amendments to the Foreign Posting of Employees Act (Lex Laval) had made a number of proposals to safeguard the Swedish labour market model and status of collective agreements in situations involving posted workers. The Committee had expressed its trust that the amendments ultimately adopted would ensure fuller compliance with the Convention for posting workers and organizations representing them.

The Committee notes with interest the Government’s indication that the amendments to the Posting of Workers Act, which were presented to the Parliament in February 2017 and entered into force on 1 June 2017, create a more effective and efficient system for the protection of the rights of posted workers. The Committee further notes with interest that, in addition to amendments pertaining to the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), under the Act, as amended: (i) industrial action against an employer can be taken with the aim of bringing about a regulation by collective agreement (the employment conditions that trade unions can demand are still limited to the minimum conditions set out in the European Union Posting of Workers Directive); (ii) posted workers who are not members of the trade union that concluded the collective agreement have the right to invoke certain conditions in the collective agreement, ultimately in a Swedish court; and (iii) there are provisions on increased transparency and predictability when workers are posted, so that it is easier for foreign employers to find out in advance what conditions apply in the Swedish labour market. The Committee further notes that sections 10 and 11 of the Act require foreign employers to report to the Swedish Work Environment Authority when they post workers to Sweden and to appoint a contact person in Sweden, who shall be able to provide documents to agencies and employee organizations that show that the requirements of the Act have been fulfilled. In addition, sections 14 and 24 provide for financial penalties as well as damages in the event of non-compliance. The Committee welcomes the legislative developments which have taken place since it last examined the situation in 2015 and requests the Government to provide information in future reports on the application in practice of the amended Posting of Workers Act since it entered into force in June 2017.

Other developments. The Committee takes note of the Government’s indication that, given that the long-term labour market conflict in the container port of Gothenburg has shown that the Swedish labour market model does not work satisfactorily, on 22 June 2017, it decided to appoint an inquiry to review the exercise of the right to take industrial action and in particular to decide whether it is possible and appropriate to: (i) limit the right to take industrial actions for purposes other than to regulate conditions in collective agreements (except for sympathy action and industrial action to recover unpaid wages); (ii) change the provisions on peace obligations in situations where an employer who is bound by a collective agreement with an employee organization is facing an industrial action by another employee organization; and (iii) establish a board which, when necessary, can take decisions on coordinating collective agreements and on peace obligations resulting from a collective agreement. The Government also indicates that, in addition, a bill drafted by the social partners addressing the issues in relation to the right to strike, is now being considered by the Ministry of Employment. The Committee requests the Government to provide further details on the proposals made by the inquiry as well as on the developments concerning the adoption of the bill drafted by the social partners currently under consideration by the Ministry of Employment.

Observation (CEACR) - adopted 2015, published 105th ILC session (2016)

The Committee notes the joint observations made by the Swedish Trade Union Confederation (LO), the Swedish Confederation of Professional Employees (TCO) and the Swedish Confederation of Professional Associations (SACO) received on 6 October 2015. The Committee also notes the observations of the International Organisation of Employers (IOE) received on 1 September 2015, which are of a general nature.

The Committee recalls that in its previous observation it had taken note of observations provided by the LO and the TCO concerning the application of the Convention within the framework of the European Court of Justice (ECJ) judgment in the case Laval un Partneri v. Svenska Byggnadsarbetareforbundet (Laval). At that time, the Committee had requested the Government to review with the social partners the 2010 amendments made to the Foreign Posting of Employees Act (Lex Laval) so as to ensure that workers’ organizations representing foreign posted workers were not restricted in their rights.

Having observed in its previous comments that the LO and the TCO also filed a complaint against Sweden in relation to similar matters before the European Committee of Social Rights (ECSR), the Committee now notes the ECSR decision issued on 3 July 2013, which concluded in relation to Article 6(4) of the European Social Charter that the restrictions on industrial action resulting from sections 5(a) and (b) of the Foreign Posting of Employees Act and section 41(c) of the Co-determination Act constituted a disproportionate restriction on the free enjoyment of the right of trade unions to engage in collective action, insofar as it prevented trade unions from taking action to improve the employment conditions of posted workers over and beyond the minimum conditions set out in agreements at central level or the user undertaking.

In its previous comments, the Committee had further taken note of the information provided by the Government that a parliamentary committee was assigned to look at the situation of posted workers and, following its investigation: (i) evaluate whether the application of the regulation ensures that fundamental employment conditions of posted workers in Sweden can be safeguarded; (ii) in terms of foreseeability, assess and evaluate the practice of the Swedish Work Environment Authority’s statutory task of providing information and the trade unions’ obligation to submit information on collective bargaining agreements to the Swedish Work Environment Authority, and if necessary propose legislative changes in this regard; and (iii) consider necessary changes to safeguard the Swedish labour market model in an international context. The Committee requested the Government to continue to provide information on the impact of the legislation and in particular the outcome of the work of the parliamentary committee and any proposed legislative changes, as well as the developments relating to the Bill regarding agency workers.

The Committee notes the Government’s indication that, in November 2014, given its view that Lex Laval did not sufficiently safeguard the role of collective bargaining agreements and that there was a risk that this would lead to unfair competition and a race to the bottom in terms of wages and employment conditions, the parliamentary committee was also assigned to consider legal amendments and possible other measures necessary to strengthen the role of collective agreements as regards posting of workers. While observing that the LO, the TCO and the SACO briefly stated that they would wait until they had the full report of the parliamentary committee and all its proposals before making their comments, the Committee takes note of the Report of the Inquiry on the Posting of Foreign Workers to Sweden transmitted by the Government on 20 October 2015. The Committee notes with interest that the cross-party Inquiry committee makes a number of proposals to safeguard the Swedish labour market model and status of collective agreements in situations involving posted workers, and that it suggests that its proposals enter into force on 1 January 2017. Among the elements related to the Convention, the Inquiry committee proposes that Lex Laval be replaced by new regulations to apply when a Swedish employees’ organization wishes to take industrial action against an employer with the aim of obtaining regulation of terms and conditions for posted workers via a collective agreement. Such industrial action may only be taken if the terms and conditions demanded correspond to the minimum terms and conditions in the applicable sectoral agreement and fall within the hard core of the Posting of Workers’ Directive (PWD), but would not apply in cases of third-country postings.

The Committee further notes with interest the Government’s indication that one example for strengthening the regulatory framework would be to consider “confirmation agreements” whereby trade unions can take action aimed at getting the foreign employer to sign an agreement to confirm that the conditions required for the concerned sector shall be applied for posted workers when such employers claim to apply the same or better conditions. The Committee further notes the statement of the Swedish Prime Minister referred to by the Government that the principle shall be equal pay for equal work according to laws and collective agreements in the country where the posted worker temporarily performs work. The Government welcomed the European Commission’s intention to present a labour mobility package, including a targeted revision of the PWD at the end of the year, and expressed its desire that this would make it possible for a revision in substance, which would enable a more substantial revision of the so-called Lex Laval and contribute to EU law being developed in line with applicable international agreements.

The Committee trusts that the amendments ultimately adopted will ensure fuller compliance with the Convention for posting workers and organizations representing them and requests the Government to provide information on the progress made in this regard and to transmit a copy of the amendments once approved.

Observation (CEACR) - adopted 2012, published 102nd ILC session (2013)

The Committee notes the information provided by the Government on the impact of legislative changes and the comments of the Confederation of Swedish Enterprise (CSE) attached to the Government’s report. It further takes note of the supplementary comments dated 10 August 2011 and 13 November 2012 made by the Swedish Trade Union Confederation (LO) and the Swedish Confederation of Professional Employees (TCO). The Committee invites the Government to provide any further information it considers relevant in reply to these comments.

The Committee recalls that in its previous observation it had taken note of the comments provided by the LO and the TCO concerning the application of the Convention within the framework of the European Court of Justice (ECJ) judgment in the case Laval un Partneri v. Svenska Byggnadsarbetareforbundet (Laval). The LO and the TCO referred in particular to the ex post facto application of the interpretation given to European Union law in the Laval judgment to the industrial action taken in that case and the punitive damages and legal fees levied against the unions, as well as the subsequent legislative amendments to the Foreign Posting of Employees Act and the Codetermination Act of 1976. The LO and the TCO denounce the new legislation which it states only permits industrial action against a foreign employer where it is aimed at bringing about a collective agreement restricted to the minimum terms covered by article 3(1)(a)–(g) of the Posting of Workers Directive (PWD). They emphasize that industrial action against a foreign employer is thus forbidden as regards any demand for a term or condition of employment higher than the absolute minimum set out in a central collective agreement and in relation to a range of other issues not set out in the PWD, such as insurance coverage for foreign workers. Moreover, section 5(a)(2) provides that industrial action may not be taken if the employer shows that the employees’ terms and conditions in substance are as favourable as the minimum conditions in the central collective agreement. The LO and the TCO contest that there are no specific details on how the employer may show this. The Committee had requested the Government to monitor the impact of the legislative changes on the rights under the Convention and provide a detailed report.

General appreciation

The Government in its latest report, observing that the LO and TCO have submitted a similar complaint to the European Committee of Social Rights (ECSR), provides the following information. The Government specifies that a parliamentary committee was assigned on 27 September 2012, composed of representatives of all parliamentary parties, to look at the situation of posted workers and, following its investigation: (1) evaluate whether the application of the regulation ensures that fundamental employment conditions of posted workers in Sweden can be safeguarded; (2) in terms of foreseeability, assess and evaluate the practice of the Swedish Work Environment Authority’s statutory task of providing information and the trade unions’ obligation to submit information on collective bargaining agreements to the Swedish Work Environment Authority, and if necessary propose legislative changes in this regard; and (3) consider necessary changes to safeguard the Swedish labour market model in an international context. The Committee shall pursue a dialogue with representatives of the social partners on the Swedish labour market and include an analysis of the consequences, if any, in relation to relevant international regulations and present its work on 31 December 2014.

The Government also refers to a Bill regarding agency workers which was submitted to the Swedish Parliament on 18 September 2012 and includes a proposal that would increase the trade unions’ possibilities to take industrial action in order to regulate the terms and conditions of employment of posted agency workers. The legislative changes are proposed to enter into force on 1 January 2013. Finally, the Government refers to the directive to improve the application of the EU Posting of Workers Directive which is being negotiated at EU level.

The Committee notes the concerns raised by the LO and the TCO that the new situation makes it difficult to determine in advance what is lawful, and the risk of large claims for damages have made trade unions in Sweden more cautious about demanding collective agreements. No trade union industrial action with a view to bringing about a collective agreement with a foreign company has taken place at all in recent years in the Swedish labour market, leading to a sharp fall in collective agreements. This means that foreign workers are entirely without protection as regards reasonable terms and conditions of pay and employment when they are working in the Swedish labour market and that Swedish workers are exposed to competition from workers with very low pay and wretched employment conditions. A further implication is that Swedish companies can no longer compete on equal terms with foreign companies. In the long term, there is a risk that this will have negative repercussions for the entire Swedish labour market model.

The Committee notes the comments of the Confederation of Swedish Enterprise that: the free movement of services throughout the EU is one of the foundations of the EU which requires that the barriers to providing services between Member States be abolished; the free movement of services is of vital importance in creating growth within Europe, and the positive effects of this in areas such as exports and consumption leading to increased employment and welfare in European countries; the EU’s rules also give people the opportunity of employment and work in other countries; the aim of the Posting of Workers’ Directive is to enable this free movement without barriers, while ensuring that employees who work temporarily in other European Economic Area (EEA) countries are provided with an adequate level of protection. As Sweden is a small country which is dependent on trade for its prosperity, these rules are of crucial significance. The service sector is expanding in both Sweden and in Europe and the provision of services across borders will become increasingly important.

The CSE and the Swedish Association of Local Authorities and Regions do not consider that the changes made in the Posting of Workers Act and the Codetermination Act in response to the Laval judgment violate ILO Conventions. The Confederation adds that they were necessary to fulfil requirements of EU law in respect of the free movement of services and non-discrimination. With respect to the right to strike, the Confederation stresses that Convention No. 87 does not include any right to strike, which remains therefore a matter for national regulation. The Confederation adds that, in Sweden, it is normal that a trade union which takes illegal industrial action may have to pay compensation for losses arising from that action, as is the case in most legal systems.

The Confederation states that the changes to the legislation only affect the ability of trade unions to take industrial action against foreign companies and do not in any way affect the right to organize and the ability to enter into voluntary collective agreement negotiations. Swedish trade unions are free to request the conditions which they consider appropriate and are not limited to core rights in this regard. Nor are there any barriers preventing employees posted to Sweden from joining a Swedish trade union, nor preventing foreign employers from joining a Swedish employers’ association. The Confederation considers that the rules introduced represent a significant improvement in so far as it is now easier for companies from the EEA to operate temporarily in Sweden. The new system is more predictable and legally secure, enabling companies to identify in advance the conditions which they are obliged to apply while working in Sweden, and the conditions which trade unions are entitled to demand through collective bargaining. The Confederation states that Swedish trade unions continue to request foreign companies to sign collective agreements and that the foreign companies usually sign them. It is not aware of any disputes having arisen in this regard, or of steps taken by a foreign employer to protect against industrial action. The Confederation further recalls that the Posting of Workers Act states that high standards of reliability must be placed on statements advanced by the employer to be protected from industrial action so it is likely that the employer would have to demonstrate the salaries and conditions actually provided beyond just citing the employment contract. The Confederation does not consider that the current system would prevent Swedish companies from being able to compete with foreign companies which comply with current Swedish regulations.

The Confederation does however regard with great concern the proposed legislation which the Swedish Government has recently introduced (Bill 2011/12:178, Law on Hiring of Workers) in which the Government proposes that foreign temporary work agencies are to be treated differently than other foreign companies by permitting industrial action against the former with the object of demanding conditions within the areas included in the core rights but not restricted to the minimum levels in collective agreements. The Confederation believes this would likely lead to an increase in collective disputes with foreign companies and will create uncertainty in the differences between those covered by this Bill and other foreign businesses making it unreasonably difficult to predict the precise conditions that they would need to apply when active in Sweden.

In its additional communication dated 13 November 2012, the LO and the TCO welcome the Government’s submission which they hope will enable the Committee to carry out its work. They regret however that the Parliamentary Committee set up to evaluate the changes in the Foreign Posting of Employees Act was not given the mandate to review the Act in light of Conventions Nos 87 and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98). While the LO and TCO consider that the new legislation on posted agency workers is a step forward, they consider that this does not resolve the issue of the collective agreement free zones on issues outside the Posting of Workers Directive. Finally, they indicate that the discussions within the EU on a directive to improve the application of the Posting of Workers Directive are irrelevant as the proposal being discussed does not address the issue of the right to take collective action.

The Committee requests the Government to continue to provide information on the impact of the legislation and in particular the outcome of the work of the Parliamentary Committee and any proposed legislative changes, as well as the developments relating to the Bill regarding agency workers.

Sanctions for industrial action

In their previous communication, the LO and the TCO refer to the €342,000 in punitive damages, litigation costs and interest that the Swedish Building Workers’ Union (Byggnads) and the Swedish Electricians’ Union were forced to pay to Laval’s Latvian trustee in bankruptcy. In this regard, the LO and the TCO state that the unions were being held liable for an ex-post facto application of the interpretation given to European Law through the Laval judgment. Despite the fact that the initial consideration by the Swedish courts in December 2004 found that the collective action was lawful under Swedish Law (a decision which cannot be appealed), the Swedish labour court revisited the case in 2009 in the light of the 2007 ECJ judgment and, given that the trade unions now conceded that the action was unlawful, ordered payment of damages. While having made the full payment of damages in October 2010, the unions continue to claim that they should not be held liable for industrial action which was considered to be lawful at the time it was undertaken; any expectation that the unions should have known that the action would be found unlawful under European Law several years later is wholly unreasonable.

The Committee, observing that the Government has still not provided any reply to this point, first wishes to recall its considerations when examining the impact of the International Transport Workers’ Federation and the Finnish Seaman’s Union v. Viking Line ABP (Viking) and Laval judgments in another European country. As in that case, the Committee wishes to recall that its task is not to judge the correctness of the ECJ’s holdings in Viking and Laval as they set out an interpretation of the European Union Law, based on varying and distinct rights in the Treaty of the European Community, but rather to examine whether the impact of these decisions at national level is such as to deny workers’ freedom of association rights under Convention No. 87. The Committee raised the concern at the time that the omnipresent threat of an action for damages that could bankrupt the union, possible in the light of the Viking and Laval judgments, created a situation jeopardizing the exercise of the rights under the Convention. In this specific case, the Committee is deeply concerned that the union in question has been held liable for an action that was lawful under national law and for which it could not have been reasonably presumed that the action would be found to be in violation of European Law. The Committee recalls that imposing sanctions on unions for leading a legitimate strike is a grave violation of the principles of freedom of association. The Committee considers that this principle is all the more relevant in the circumstances where the action was lawful at the time it was exercised. While aware that the payment has already been made to the trustee in bankruptcy, the Committee requests the Government to review this matter with the social partners concerned so as to study possible solutions for compensation of the two unions, particularly in light of the 2004 court judgment leading the unions to believe their action was lawful.

Lex Laval

The Committee notes the Government’s reiteration that the legislative changes made following the Laval ruling, which entered into force on 15 April 2010, do not violate any of the ILO Conventions on freedom of association or collective bargaining. The Government has explained that the core of the relevant change is a new section 5(a) which only refers to the Swedish trade unions rights to take industrial action against a foreign employer who posts workers to Sweden and does not affect either the workers’ rights to form or join trade unions or to engage in collective bargaining. Moreover, the restriction only refers to industrial action aimed at conditions going beyond the hard core of the PWD. The Government adds that the amendments do not affect industrial action in a purely national situation and contends that the Convention primarily protects national conditions and not workers who have been posted to another country. Moreover, the Government stated that the Convention primarily protects industrial action against the employee’s own employer which is not the case if the posted workers are not members of the Swedish trade union.

The Committee notes the comments of the LO and the TCO that the explicit purpose of the Swedish legislation prior to the Laval case, and in particular the Lex Britannia rule which permitted industrial action with the purpose of compelling a foreign employer to enter into a collective agreement regardless of whether the employer was already bound by a collective agreement with a trade union in its home country, was to achieve equality of treatment on the Swedish labour market of foreign and Swedish companies and employees. The Committee notes that the LO and the TCO denounce the new legislation which it states only permits industrial action against a foreign employer where it is aimed at bringing about a collective agreement restricted to the minimum terms covered by article 3(1)(a)–(g) of the PWD. They emphasize that industrial action against a foreign employer is thus forbidden as regards any demand for a term or condition of employment higher than the absolute minimum set out in a central collective agreement and in relation to a range of other issues not set out in the PWD, such as insurance coverage for foreign workers. Moreover, section 5(a)(2) provides that industrial action may not be taken if the employer merely shows that the employees’ terms and conditions in substance are as favourable as the minimum conditions in the central collective agreement. In other words, the employer does not even need to be bound by a collective agreement with a trade union in its own country or prove in a legally binding way the assurance of minimum conditions in order to be protected from industrial action. Finally, the LO and TCO indicate that, while the Swedish trade union movement has been making great efforts to organize foreign workers posted to Sweden, the restriction on industrial action makes no distinction as to whether or not the union has members in the foreign enterprise.

In its latest report, the Government, while observing that there has not yet been any unbiased and comprehensive evaluation of the legislative changes, provides statistics from the Swedish National Mediation Office showing that these statistics show that the number of disputes with foreign employers is low; there was one dispute in 2007 and 2008 and no disputes from 2009 through 2011. There was a slightly higher number of disputes prior to 2007 ranging from five in 2002 and 2003 to 12 in 2004, 11 in 2005 and four in 2006.

As a general matter, the Committee recalls that when elaborating its position in relation to the permissible restrictions that may be placed upon the right to strike, it has never included the need to assess the proportionality of interests bearing in mind a notion of freedom of establishment or freedom to provide services. The Committee has however suggested that, in certain cases, the notion of a negotiated minimum service in order to avoid damages which are irreversible or out of all proportion to third parties, may be considered and if agreement is not possible the issue should be referred to an independent body (see 2012 General Survey on the fundamental Conventions concerning rights at work in light of the ILO Declaration on Social Justice for a Fair Globalization, paragraphs 136–139). The Committee considers, however, that the principles of the Convention does not impose the recognition of a Lex Britannia rule, which is very particular to Sweden. This would be a matter to be determined at the national level.

The Committee does observe with concern, however, that the amendments to the Foreign Posting of Employees Act restrict recourse to industrial action to conditions corresponding to the PWD minimum conditions and further bar unions from taking industrial action even if they have members working in the enterprise concerned and regardless of whether a collective agreement covers the workers concerned, provided that the employer can show that the employees’ terms and conditions are as favourable as the minimum conditions in the central collective agreement. The Committee considers that foreign workers should have the right to be represented by the organization of their own choosing with a view to defending their occupational interests and that the organization of their choice should be able to defend its members’ interests, including by means of industrial action. The Committee therefore requests the Government to review with the social partners the 2010 amendments made to the Foreign Posting of Employees Act so as to ensure that workers’ organizations representing foreign posted workers are not restricted in their rights simply because of the nationality of the enterprise.

Observation (CEACR) - adopted 2010, published 100th ILC session (2011)

The Committee refers to the observation formulated as regards the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

Direct Request (CEACR) - adopted 2002, published 91st ILC session (2003)

The Committee notes the comments of the Confederation of Swedish Enterprises concerning the deduction of trade union dues from non-unionized workers’ wages. In this respect, the Committee recalls that it has always considered that "union security" clauses in collective agreements, which make payment of union dues compulsory by all workers, whether or not they are trade union members, are compatible with the Convention provided that they are the result of free negotiation between workers’ organizations and employers (see General Survey on freedom of association and collective bargaining, 1994, paragraph 102).

Direct Request (CEACR) - adopted 1993, published 80th ILC session (1993)

The Committee notes with interest from the Government's report that the obligation to refrain from taking industrial action has been restricted through an amendment (1991-741) to the Co-determination Act effective from 15 July 1991, as regards working conditions with international connections. Under this amendment a union organization in Sweden is not prevented from taking industrial action against an employer who is active in Sweden and who is bound by a collective agreement to which the law of another country is applicable and to which the Co-determination Act does not directly apply. This sort of collective agreement generally covers foreign workers who work temporarily in Sweden. According to the Government, this amendment will give a union organization an opportunity to conclude collective agreement on terms corresponding to what is normally applicable to work done in Sweden. The Government explains that the amendment in question aimed at counteracting "social dumping".

The Committee takes note of these indications and considers that the amending Act of 1991 does not conflict with the principles enshrined in the Convention.