Page 47 - Socially-responsible-restructuring-Effective-strategies-for-supporting-redundant-workers

Socially responsible restructuring
Effective strategies for supporting redundant workers

Employment Protection Act ( ) introduced provisions on notification periods,
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requiring the employer to try to prevent redundancies and to account for the
economic decisions resulting in lay-offs. The Co-Determination Act of 1976 also
obliged employers bound by collective agreements to consult with the trade
unions on organisation changes, including those affecting employment levels.
Finally, the scope for action within collective agreements in restructuring
situations was significantly extended by further legislation in 1993, which
abolished what was then a PES monopoly on placement activities. Beyond these
national frameworks for practice and minimum requirements, the responsibility for
managing restructuring in Sweden, and the processes engaged, rests essentially
with the firms and the social partners, both at sectoral and enterprise level.
Underpinning this, there is no works council and negotiation takes place directly
between trade unions and the company management. The threshold for
participation of trade unions in the executive decision-making body, such as the
company board, is relatively low, currently above 20 workers. Social partner
negotiation is also used for setting up outplacement bodies within sectoral and
enterprise level agreements, as job security councils, usually at branch level.
A first major Swedish agreement was signed in 1974 and now centres on 14
collective transition insurances, covering an estimated 50% of Swedish
employees. Recent research suggests these arrangements support 40 000 job
transitions every year ( ). Social partners have variously negotiated a wide range
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of job security and adjustment agreements in Sweden with the aim of both
anticipating and more effectively managing enterprise restructuring. While
arrangements vary from one agreement to another, there are some more
common features on what has been referred to as ‘transicurity’. This system
grants displaced employees training and financial support with the specific aim of
improving their job and financial security, at the same time as it aids overall
geographical and occupational mobility. Typically, these agreements include
transition funds established and jointly owned by the social partners. Insurance
costs amount to about 0.3% of total wages. Job security councils, funded through
membership fees, are established jointly at the level of professional branches to
implement the agreements. In the case of a collective redundancy due to
restructuring or in the event of individual loss of employment due to shortage of
work, employees facing lay-offs are given help to find new employment through
adjustment measures and financial support. The displaced workers may, in

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( ) ‘Lagen om anställningsskydd’, LAS, 1974.
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( ) See: 2006 study by MIRE at: http://www.mire-
restructuring.eu/docs/CS%20JobCouncils%20EN.pdf [cited 6.5.2010] and 2009 study by
Eurofound at: http://www.eurofound.europa.eu/pubdocs/2009/18/en/1/EF0918EN.pdf. [cited
6.5.2010].

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