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Labor Legislation During the 1970S

Yonatan Reshef
School of Business

University of Alberta
Edmonton, Alberta

The following is based on:
Fact Sheets on Sweden. Labor Relations in Sweden.
Published by the Swedish Institute, January 2001.

It was characteristic of the 1970s that industrial relations issues that were previously regulated by voluntary agreements came to be regulated by legislation. Once fundamental economic and social rights had been achieved, politicians became increasingly interested in labour relations and the unions became increasingly political.

Influenced by the leftist winds that blew in the late 1960s, the 1971 LO Congress adopted a wide-ranging, radical program calling for greater union participation in company decision making and many other changes in labour law. TCO adopted a similar program. As a result of these demands, many new labour laws were introduced, mainly between 1972 and 1977. The main ones are described below.

First, however, a few words about the Labour Court (Arbetsdomstolen), which was founded in 1928 and comprises the final -- and in most cases the only -- forum for settling legal disputes on labour issues. Its members include representatives from government, employers and unions. The court hears some 150 cases a year. There are no regional or sector labour tribunals.

The Security of Employment Act (LAS, 1974) increased the influence of the unions. Dismissal of an employee must be based on "objective grounds". Such grounds do not exist if it can be reasonably demanded that the employee be moved to another job in the company. Older employees are entitled to longer periods of notice than younger ones: those under age 25 get one month and then the period goes up to six months for those 45 and over. (Collective agreements may add further months to this, e.g. twelve-month notice of dismissal for some employees over 55).

In 1982 an option to hire people on a trial basis for up to six months was introduced. In 1994 this period was increased to twelve months, and employers got a slightly larger formal say in deciding which employees to keep when there are staff cutbacks. But in 1995 the previous regulation was reinstated. Employers claim that the present "Last In-First Out" rules make it hard for them to keep the employees they need and for young people to find or keep jobs. They have demanded changes in labour legislation.

A 1974 act (Fortroendemannalagen, FML) entitles trade union representatives to perform many union duties during paid working hours. Local union branches decide which people are to be regarded as union officials and may to some extent decide what hours they may devote to union activities at the workplace. A 1975 law increased opportunities for employees to be granted leave of absence from work to pursue studies for long or short periods.

The Work Environment Act of 1978 increased the rights of unions to help improve workplace health and safety. The concept encompasses work systems, working hours and adaptation of work to human factors. Safety representatives may halt dangerous work under certain circumstances. The tasks and responsibilities of the safety committees are covered by agreements settled between SAF member federations and LO/PTK member unions.

The 1980 Act on Equality between Men and Women at Work forbids an employer from discriminating against an employee on account of gender. Men and women shall enjoy equal opportunities for employment, training, promotion and on-the-job development. They shall receive equal pay for work of equal value. Since 1992 employers with ten employees or more are requested to draft annual plans for their efforts in this field.

The Vacation Act of 1978 increased the statutory minimum paid holiday from four to five weeks.

Employee Involvement

During the 1970s employee participation in decision-making at the workplace was a much- debated topic. A long series of changes took place, some of them controversial. Three levels of involvement were mentioned: shop floor, company and financial participation.

Shop floor participation aims to enhance the influence of individuals over their own work. Companies improved the design of workplaces and job content, so as to create a better working environment and increase opportunities for employees to influence their own job.

Company participation refers to the influence of employees over their workplace through  the unions. At this level, union representation in advisory bodies within companies began when the SAF-LO and SAF- TCO works council agreements were signed in 1946. These agreements were replaced in 1977 by the Act on Co-determination at Work (MBL).

This act applies to all workplaces where at least one union member is employed. The law regulates many issues settled earlier, such as the right of association and bargaining, and rules concerning mediation and conciliation. The parts of the law dealing with union influence on decision-making attracted by far the most attention.

An employer is obliged to consult with local unions before implementing decisions that involve a major change for employees in general or an individual union member. If the parties fail to agree, the matter can be referred to a second round of consultation at the national level. Only after that is the employer entitled to make his final decision (regardless of whether the par- ties agree or not). Employers that neglect these rules can be ordered to pay damages.

The employer also has an obligation to provide information. Unions have access to virtually all company documents. In certain types of disputes, the view of the union enjoys priority until the dispute has been settled in the Labour Court or by other means.

At the request of a union, employee participation in decision-making can be regulated further through a collective agreement. SAF, LO and PTK signed such a supplementary pact in 1982. The main idea of this Agreement on Efficiency and Participation is to delegate authority to foremen and individual employees. The agreement served companies and employees well by bringing participation back to the workplace.

Under another law (1973, amended in 1976 and 1988), local unions may appoint representatives to the board of directors of most companies with at least 25 employees (there is no balloting among employees). The unions are entitled to two board members and two alternates. In companies with 1,000 or more employees operating in more than one economic sector, unions may appoint three members and three alternates. Union representatives may not hold a voting majority on company boards. They have the same rights and responsibilities as other board members, but on certain issues where e their union and the company have interests that may conflict (such as pay bargaining matters) they are disqualified from taking part in board meetings.

Financial participation, lastly, focused on the question of who should own companies. The 1976 LO Congress called for the creation of “wage-earner funds", or union-controlled investment funds. This issue became extremely controversial. Several models were presented. Five regional funds were implemented in 1984, each with a nine-member board of directors including five from the unions. Large amounts of money were collected from employers and used for buying shares in private companies. Money was collected to this system for seven years (1984 to 1990). The funds were abolished as from 1992. The money which was collected is now used for various R&D purposes.

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