Collective bargaining is the act of employees negotiating with their employers for better working conditions, higher wages or other improvements to their work environments.  In order to see how collective bargaining can be fully utilised in the UK, it is useful to look at the situation in the Nordics countries, especially Sweden.

Collective bargaining in Sweden

The absence of a minimum wage in Sweden allows employers flexibility in setting wages. However, this can disadvantage workers during periods of high employment as employers would, in theory, simply be able to employ those asking for lower wages.

Swedens approach therefore relies heavily on collective bargaining agreements between trade unions and employers. Around 90% of workers are protected by such agreements and 70% affiliated with trade unions, forming the basis of what is known as the Swedish model.

This high coverage of agreements is due to factors such as high union density and a mix of centralised and decentralised industrial relations. The stability of employer associations further contributes to this coverage.

Swedens industrial relations are characterised by self-regulation, with few legal restrictions on industrial action and no compulsory arbitration. The Swedish Mediation Office has significant powers but resorts to enforced mediation only in industries without negotiation agreements. The balance of power between labour and management, along with awareness of potential conflicts, keeps strikes and lockouts infrequent.

The collective bargaining model is so strong and support for it is so high that politicians do not interfere with industrial action. This is the opposite of the situation in the UK, in which the trade union movement and the current government clash regularly.

In Sweden sympathy strikes are also  legal which means that other sectors can support either colleagues and boycott the original company. This is currently the case with IF Metall union and Tesla.

Tesla employs 120 workers in Sweden, servicing vehicles for Swedish drivers across several different sites. However, Tesla refuses to negotiate a collective bargaining agreement with their employees which has caused their workers to strike.

Not only have these servicing workers chosen to strike; other workers in different sectors have chosen to support these strikers by refusing to work with Tesla. These include dock workers who are refusing to offload Tesla products from ships in Swedish ports and electricians who are refusing to fix Tesla-branded electric chargers. These secondary boycotters state that they are striking to ensure the survival of the Swedish labour relation model.

This tactic worked well in a separate dispute with Amazon, which forced Amazon to subcontract the operations to a local company which had an existing collective bargaining agreement.

Although these measures might signal that striking in Sweden is common, it is the opposite. In terms of raw total days lost, Sweden lost an average of 8,100 working days a year to industrial action compared to 2.472 million within the UK.

When comparing the two systems on average between 2010-2019 Sweden had an average of 2.4 days lost to strikes compared to 17.9 days for the UK. Between 2020 and 2022 the data becomes either non-existant or insufficient for the UK. However in this period Sweden sees 1.2 days lost to strikes compared to 88.9 days for the UK.

However, challenges persist, including declining union density among blue-collar workers, wage disparities between male and female-dominated occupations, and tensions within employer and union confederations. To fix this, some advocate for “figureless agreements“, particularly in the public sector.

Despite these challenges, the Swedish model of wage formation, based on extensive collective bargaining, remains robust.

Implementing this model within the UK

The current trade union system in the UK is seen as ineffective, failing to adequately protect workers in the private sector while providing advantages for those in the public sector. One proposed solution to address this issue is adopting Sectoral Bargaining, as practised in Sweden, where entire industries adhere to negotiated agreements.

Swedens approach emphasises collaboration, transparency, and accountability in bargaining processes. They utilise well-established arbitration systems to resolve disputes and continuously evaluate and adjust their bargaining systems.

Moreover, Sweden prioritises work-life balance and flexible work arrangements negotiated through collective agreements. Incentives, such as tax breaks, encourage active participation in bargaining among Swedish employers, suggesting potential strategies for increasing engagement in the UK.

By taking lessons from Sweden, it would become possible to provide improved working conditions within the UK. This not only increases the wellbeing and morale of workers, it also can increase productivity and worker retainment rates for companies.

This is a win-win for both employees who receive better working conditions and companies who receive higher productivity and this can lead to high profits. All in all this produces better results for the country and the government should adopt some of the laws that Sweden currently has in order for this to happen.