Tech companies disrupt the Swedish model

The situation is fluid right now. Who has a collective agreement? Who is on strike? Where are conflicts being announced?

Currently, the trade union IF Metall is striking at Tesla to get a collective agreement. The trade unions Sveriges ingenjörer and Unionen have issued strike notices to Klarna. In August, Spotify ended negotiations with the trade unions Akavia, Sveriges ingenjörer and Unionen. The company withdrew, arguing that collective agreements have no added value for their employees. 

”We must remind ourselves that it is both legal and possible to run a fast-moving and competitive business without a collective agreement. We must allow a discussion that collective agreements may be crucial in certain industries and companies but not in others,” a spokesperson for Spotify told Breakit magazine. 

Even on the employer side, organization is loosening. Tech Sweden is leaving the employer organization Almega, citing the view on collective agreements as a reason. 

”Other companies might get a taste for it”

The fact that tech companies are reluctant to sign collective agreements affects the Swedish model ”to the highest degree,” says Christer Thörnqvist, associate professor of labor science at the University of Skövde and strike expert. 

– If IF Metall budge one inch against Tesla, it will become very dangerous on the Swedish labor market. Then other similar companies might get a taste for it. We have always tried to avoid legislation, and that is what happens otherwise. Because the entire Swedish model is based on collective agreements.  

In Sweden, nine out of ten employees still work at a workplace covered by a collective agreement. But having conflicts around such large companies, two of which are Swedish, is unique, says Irene Wennemo, director general of the Mediation Institute. 

Are you worried about collective agreement coverage?

– No. But we have seen a slight downward trend, above all on the white-collar side. It probably depends on companies like Klarna and Spotify. There has been rapid growth in that industry and possibly the collective agreement coverage has not kept up. If we get more conflicts of this type in the future, it will above all be for white-collar jobs.

Can unions counter a ’capital strike’?

Mikael Hansson is a professor of labor law at Uppsala University. He sees that part of the explanation lies in the fact that companies can threaten to leave the country. Something he calls the ”capital strike”.

– The tech industry can move abroad, so the situation is probably quite difficult strategically. And it is difficult to get around the fact that it becomes more expensive for the employers with the union’s agreement, perhaps they also fail to convince people that a happy and healthy workforce is cheaper in the long run and even less that it should be on the union’s terms. 

Have the unions fought too little?

He adds that the Swedish unions may have taken the model and their position so for granted that it affected their strategies. 

Mikael Hansson lists questions: The unions have significant resources to fight with, but can they reach the opponent? Have they fought so little that they are not used to adapting their strategies to the opponent? Can the union movement be a unifying force strong enough to influence? 

–  In that case, perhaps a conflict can revitalize the feeling of solidarity and fighting spirit, but it can just as easily become a feeling that the unions get involved and pursue their issues over the heads of those affected. A difficult situation, but interesting. 

Irene Wennemo, of the Mediation Institute, however, says that as long as a company wants to stay in Europe, the Swedish model is competitive. But it may be hard to understand.

She also says that unions here must have stronger opportunities than in many other countries to sign collective agreements, as we do not have legislation regulating wages and conditions. 

– As for Unionen’s collective agreements, they are easy for employers to apply. But you might be stuck in other solutions for pensions or the like. So there are certainly things to discuss. 

”Then the businesses should probably relocate”

Christer Thörnqvist thinks Sweden should ”take the hit”, regarding the threats of relocation. 

– Then you might as well do it, right? Isn’t that the only answer one can give? You cannot lower yourself to social dumping for the rest of the labor market for a small fraction of everyone who works in Sweden. Because it’s not about that many jobs. But the fact that they do not sign a collective agreement can become a very dangerous practice. 

Neither Klarna, Spotify, nor Tesla are members of Tech Sweden.