NORMAN EIGER"

The Expanding Scope of Public Bargaining in Sweden

DURING THE SEVENTIES in Sweden, a series of labor law reforms were initiated that established the basis for substantive employee participation in work- place decision making in both the private and public sectors of the economy. In 1972, parliament passed an experimental law (made permanent in 1976) that gave employees the right to have two voting representatives on the board of directors of private companies (a 1974 ordinance established a somewhat similar employee right in the public sector). The Work Environment Acts of 1974 and 1978 continued the trend toward increased public and private sector employee participation by pro- viding joint labor-management safety committees and union safety delegates with the right to participate in workplace design decisions; suspend dangerous operations; allocate the jointly negotiated health and safety budget of the company or agency; and establish training programs.

However, the keystone in the arch of recent legislation extending employee and union influence over workplace decisions is the 1976 Act on the Joint Regulation of Working Life (MBL). The act, which took effect on January 1, 1977, covers almost all private and public sector workers. This law represents an important turning point in organized labor's seven-decade-old effort to overcome management's unilateral decision-making prerogatives. As in much of Sweden's labor legislation, the law has an open structure and does not seek to impose a standard model of co-determination on the labor market parties in each public or private workplace. It does, however, broaden enormously the scope of issues to be negotiated by requiring the employer to take the initiative in holding negotiations with the union before introducing any major organizational change.

Although the 1976 co-determination act covers both the public and the private sec- tors, it is only in the former that negotiations have proven successful thus far. (Private sector negotiations, with the exception of the banking and insurance industries and the cooperatives, have been at an impasse since 1978.) This article reviews some of the conditions which made it possible for the public sector to lead the way in reaching agreements at a national level on employee decision making in the work- place; examines key provisions of the state sector co-determination agreement which served as the model and paved the way for national agreements covering local govern- ment, banks and insurance companies, and cooperatives; and discusses certain implications of the Swedish labor legislation, I was fortunate to have had the oppor- tunity to spend seven weeks in Sweden in the spring and summer of 1980 to study some of the dramatic new developments in labor relations. This article is based in part on interviews I conducted with trade unionists, management representatives, and academicians, as well as on an examination of the new reforms and agreements.

"Professor of Labor Education, Rutgers-The State University.

INDUSTRIAL RELATIONS, Vol. 20, No. 3 (Fall 1981). 0 1981 by the Regents of the University of California. 0019/8676/81/ 10 15/33S/$l .00

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Historical Background Article 32 of the Act on the Joint Regulation of Working Life gives

the unions the option to request that agreements be negotiated on “the right of joint regulation of matters which concern.. .the management and distribution of work and the activities of the enterprise.” As a result of this provision, the labor market parties entered into negotiations at the national level to sign a co-determination agreement that would in turn serve as a guide for negotiating local agreements. After the co-determination negotiations broke down in the private sector in 1978, stepped up negotiations in the public sector met with success on March 2, 1978, when an agreement covering 450,000 state workers was reached by the unions and the State Bargaining Office.’ Tho similar agreements covering an additional 400,000 workers and teachers took effect on October 1, 1980.

Achieving public employee participation in workplace decision making took at least a decade of groundwork (and much work still remains). The Social Democratic Party led the way in 1968 by promoting (through the Committee for Industrial Democracy) the establishment of a large number of experimental projects in state- owned companies.2 In 1969, the Swedish Confederation of Trade Unions, known as the LO, established its Committee for Democracy in Administration which success- fully established experimental programs in local government agencies and enterprises owned by the Cooperative Movement (see Congress of Swedish Trade Union Con- federation, 1971). Participation in decision making in these pilot programs was generally restricted to personnel planning and policy. Joint committees with equal management and employee representation were set up for this purpose. Decision- making authority on staffing matters, recruitment, training, personnel development, and layoffs were shifted from the personnel director who normally made these decisions to the joint committee (Strom, no date).

Thus, a body of experience was amassed from over six years of worker participation experiments with some 1,000 joint decision-making bodies in public authorities and nonprofit enterprises. Success with these limited forms of participation encouraged the unions to press for expanded public employee influence that would include other substantive decision-making areas. In response to union demands, the Social Demo- cratic government set up a Royal Commission in 1972 to develop a legislative proposal on co-determination. The Commission evaluated the experience of the experimental projects and also incorporated the recommendations that came from an extensive nationwide discussion of the issues involved that included over 100,000 trade unionists enrolled in some 10,000 study circles.

In working out the final legislative draft, the Royal Commission was faced with determining where to draw the boundary between the decision-making areas that public sector employees must be permitted to negotiate and the policy matters which must be the prerogative of the political bodies to decide. In the traditional Swedish manner of dealing with difficult problems involving conflicting rights, the matter was resolved pragmatically and flexibly. At the same time as the 1976 Act on the Joint Regulation of Working Life was legislated, a supplementary law, the Public

1For detailed summaries in English of these provisions, see Appendix 1, Sweden’s First Central Agreement on Co-determination (Stockholm, Sweden: LO Swedish n a d e Union Confederation, mimeo- graphed, 1979), and Co-determination Agreement for the State Sector- A Summary (Stockholm, Sweden: TCO-S, 1978).

Zlntcrvicw with Eva Britt Henmark held at offices of SIF, Stockholm, Sweden, June 1, 1980.

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Employment Act, was passed. This law resolved the boundary line dilemma by simply lifting restrictions on what was bargainable, and leaving it up to the parties to work out a preliminary basic agreement that would avoid conflict (Forseback, 1976).

The necessary preliminary agreement, called the Basic Agreement for the State Sector ( 1978), was reached quickly. It provides procedures for resolving disputes and includes a pledge to avoid strikes or lockouts where questions of public policy and political democracy are involved. In addition, a special committee was established, comprised of a majority of government representatives, to resolve disputes over the extension of bargaining into policy areas. In this way the government maintains a large measure of control over the scope of bargaining without specifying the issues that are nonnegotiable.

This flexible approach to a problem that has generated much conflict in public sector labor relations in the United States cleared the way for successful national negotiation of state and local government agreements. In turn, these national agree- ments established a framework for regulating how workplace level co-determination agreements are to be negotiated.

The State Sector Co-Determination Agreement: Key Provisions The three broad areas in which the national agreement provides a model

for local negotiations are planning, organization, and personnel management. The extent of involvement in these areas is left up to the local unions, although the agreements are subject to the approval of the central union organizations.

Planning. The unions consider participation in planning of paramount importance. The state co-determination agreement, for example, requires that all state-owned companies and agencies are to have both short-term and long-term (three-year) planning systems. Unions that request involvement in the planning process are to be given the opportunity. This is a serious choice; if the local union decides it wants to participate in long-term planning, it has committed itself to three years of meetings with management in such areas as investments, phasing out old product lines and services, introduction of new product lines, and budget requests and allocations.3

However, in all planning areas, with the exception of the planning of personnel mobility, and changes in working conditions, the public employer is only obligated to involve the local organizations of workers in negotiations. In the event of an unresolved dispute, the employer can carry out the planned change. The agreement refers to this level of joint regulation as co-determination “type A,” which means that the employer is simply required to postpone his decision until the planning negotiations are concluded (see Co-determination Agreement for the State Sector, 1978).

How meaningful is this essentially consultative and deferral power? For the unions, it has the immediate positive effect of compelling public employers to engage in a planning process. While it does not give the local union the right to decision-making parity, or a decisive influence over the planning process, consultative power does provide the union with access to more information and establishes a monitoring function which local unions have not had previously.

Organization. The State Sector Agreement covers several aspects of company/ agency organization. At the outset the union is to be given a clear diagram specifying

3Henmark interview.

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the powers and field of responsibility of each part of the public enterprise’s organi- zational and decision-making structure. This chart is intended to satisfy the local union’s need to know the decision-making process; to become familiar with when, how, and under what circumstances the process can be changed; and to participate in recommending changes (see First Central Agreement on Co-determination, 1979).

In addition, workers are given the right to participate (through their work group) in selecting any one or more models of work organization, such as: self-managed autonomous work groups, job rotation, flexible hours, etc. Efforts to rationalize the work process also must involve the participation of the workers themselves. Employees that are to be affected by rationalization proposals are to be informed of the planning, investigation, and implementation of these proposals. Also, the local union organizations must be continuously informed and involved in the planning of these changes.

Personnel management. Three areas of personnel management are covered by the State Sector Agreement: mobility, development, and information and training. Personnel mobility refers to the recruitment, transfer, replacement, or reduction of staff in the interest of organizational efficiency. Where cutbacks are needed, the public employer agrees to achieve them through reassignments and attrition.

Unions can also pursue agreements on guidelines for recruiting new workers. They are given veto power over psychological suitability tests, orientation programs for new employees, terminal interviews, and personnel communications concerning matters of interest to employees.4 Also, local agreements may be negotiated which identify as areas of co-determination training needs related to personnel development, selection criteria for training, and the objectives of training curricula.

The right to hold union meetings during paid working time to provide information on work-related matters is secured by the Co-determination Agreement. In addition, every state employee has the right to five hours of information on the co-determination agreement on paid working time. Lastly, on issues relating to rationalization such as job evaluation and the introduction of new technology, the union has a right to retain the services of an employee consultant (at the expense of the employer) in preparing for its participation in negotiating policy.

Discussion The implementation of the national co-determination agreements at the

local level has been slow, but there are several factors operating to further the process of workplace democratization in the public sector, First are the administrative styles, norms, and traditions of the Swedish public sector. Anton’s (1980) study of the values and behavior of public service administrators in Sweden reveals that this group has some important distinguishing differences from public elites in other western democracies. Although recognizing the problems inherent in making cross- cultural comparisons, Anton found Swedish public administrators to be pragmatic; inclined to consultative styles of problem solving; skillful at compromising; and secure in their status. Naturally, these generalizations must be considered cautiously, but if the traits of Swedish managefs in the public sector cause a tilt toward administrative styles that are participative rather than authoritarian, it is not un-

4Thc union’s right to veto these decisions in the personnel area is referred to in the agreement as co-detcrrnination “type 13.’’

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reasonable to hypothesize that this is a factor that should further conflict-free agree- ments and arrangements leading toward greater employee participation.

A second factor facilitating co-determination is the combined influence of social democratic ideology in the civil service and the practice of placing at the head of major national and county government agencies, citizen boards on which the trade unions have significant representation. These citizen boards exercise some influence over agencies and also have a monitoring function. The unions have an additional right to appoint employee representatives to the management boards of government agencies and enterprises. Study is needed on the influence of such representation on the successful conclusion of co-determination agreements at the workplace level. Based on the nature of the training programs currently underway, there is reason to believe that the labor representatives on the boards of public enterprises will join with negotiating efforts from below to promote the successful negotiation of local co-determination agreements.

Finally, there is the late-starting but comprehensive educational effort underway among the public sector unions which seeks to prepare all levels of the union struc- ture to carry out the agreements. Although extensive programs were organized on the subject of co-determination prior to the agreements in the public sector, once these agreements were signed the task of education assumed greater urgency. Each union affiliate of the TCO-S and the LO covering government workers began orga- nizing educational programs aimed at the specific need of preparing local union leaders and members for the task of successfully concluding local co-determination agreements.

Starting with the larger governmental agencies, this major training effort should soon reach into almost every public sector workplace. In some ways the educational effort has transformed the workplace into a learning research laboratory where employees examine the structure and problems of their working environment. Largely unprecedented questions about planning, work organization, and personnel policies are now being raised. Simultaneously, union structure at the local, district, and national level is being examined to determine the changes needed to accommodate co-determination.

Conclusions The national agreements achieved in the public sector reflect an

approach to labor reform that is characteristically Swedish: the law establishes a general framework that provides rules governing many areas of the relationship between the parties that were not contained in previous collective agreements. But since these rules are to be applied to diverse state enterprises, specific application and interpretation depends on local needs. How co-determination evolves will reflect the nature of the local agreements and the ability of local organizations to execute these agreements.

As yet, few local union organizations in state enterprises have fully implemented the agreements, The complexity of the issues involved has resulted in a cautious pace by both parties. Also, considerable structural preparation was necessary: a network of co-determination committees at the local union organization level had to be organized; workers in each department of the workplace had to select liaison representatives with the committees; and an extensive training program was required

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to prepare union members to effectively negotiate and carry out the local agreements. In addition, in many small state agencies and enterprises union organization is weak. Many existing union positions are not filled; the small membership base makes it difficult to develop new co-determination committees. And finally, the changed political and social climate following the defeat of the Social Democratic Party and a concomitant deflation of the high expectations generated by passage of the 1976 Act have retarded the progress of co-determination agreements.5

The impact of the political atmosphere was noted by a militant miner from Keruna who told me that his co-workers and the local union leadership in the state-owned mines above the Arctic Circle won’t give priority to negotiating local co-determination agreements “until the present anti-labor government is replaced by a Social Demo- cratic government.” He felt that the 1976 law and the resultingstate sector agreement were weak “because the employer retains the power to carry out most decisions after going through the formality of negotiations.” In his view, this would not be a serious problem with a Social Democratic government in power because management would be reluctant to take advantage of the law’s weakness for fear of inviting stronger legislative initiatives.6

Although most of the trade unionists I interviewed were not as critical of the new law as the miner, there was a widespread view that the realization of the law’s objectives and its strengthening by further reforms depended on returning the Social Democrats to governmental power. Since all public opinion polls indicate that if elections were held now, the Social Democrats would be returned to office, trade union activists are hopeful that they will not have to wait beyond the 1982 elections.

Will the local union organizations conclude agreements which extend their influence over a broad range of managerial decisions in the public sector? Will these agree- ments transform the working relationships of management and labor? Will they improve the efficiency of state activities? Will they result in government workers having a greater sense of work satisfaction and commitment to their jobs? Although the state sector agreement has been in effect for two years and the central municipal and teacher agreements for one year, there has been too little experience to answer these questions definitively. However, it is clear that a process has been set in motion that has the potential of greatly transforming the role of employees in the public sector. Despite the slow pace of implementation, the law and subsequent agreements which give public employees participation rights in enterprise decision making are a bold innovation in labor relations.

How this process will work out in the public sector is of special interest in view of the need to prevent interference with the principle of political democracy and the rights of publicly elected bodies. The developing Swedish model attempts to meet both these requirements without sacrificing workers’ rights or interests. It is, there- fore, an important phenomenon that deserves continued close observation and evaluation.

Jlnterviews with representatives of LO and TCO-S, Stockholm, Sweden, June, 1980. GInterview with Rauno Siren at Hasseluden, LO School, Stockholm, Sweden, June, 1980.

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References Anton, Thomas J. Administered Politics. Boston, MA: Martinus Nijhof, 1980. Basic Agreement for the State Sector. Stockholm: TCO-S, 1980. Forseback, Lennart. Industrial Relations and Employment in Sweden. Stockholm: Swedish

Institute, 1976. Sweden, Parliament, Act on the Joint Regulationof Working Life, Bill 1975/76: 105 (Appendix

l), In U 45, rskr 404. Sweden, Parliament, Act Relating to Board Representation For the Employees. Adopted by

Parliament on December 14, 1972. (Text Published in English by Swedish Employers Confederation, Doc. No. 1521, mimeographed, no date).

Sweden, Parliament, Public Employment Act. (LOA, 1976: 600). Sweden, Parliament, The Work Environment Act, Swedish Code of Statutes (CFS), 1977:

Sweden, Parliament, Workers’ Protection Act and Workers’ Protection Ordinance. (Text pub-

Strom, Fingal. Co-Determination For Government Employees in Sweden. Mimeographed

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lished in English by Ministry of Labour, Stockholm, May 1974).

lecture (undated). Swedish Institute Library, Stockholm.