New Legislation Makes it More Difficult for Foreign Employers to Avoid Swedish Collective Agreements

Byggnads is the largest Swedish trade union for construction workers. In 2004, Byggnads blockaded the Latvian construction company Laval in order to force Laval to sign a Swedish collective agreement. The subsequent court case resulted in what is known as Lex Laval. The core implication of Lex Laval is that while a trade union is allowed to use industrial action against foreign employers if the purpose is to force the employer to be bound by a Swedish collective agreement’s minimum conditions—it can only do so where the employer could not show evidence that those minimum conditions were already met. This is called the “rule of evidence.” The consequence of the ruling was that it was harder for unions to commence industrial action against foreign employers than domestic employers, as with the latter, employers could not frustrate the action by showing this evidence.

The Posting of Workers Act has recently been amended in order to remove the rule of evidence. This means that trade unions are now able to enact industrial action against a foreign employer regardless of whether the employer is able show that its employees’ working conditions are equivalent to the minimum working conditions in a Swedish collective agreement.

There are still some protections for employers. For industrial action to be lawful it must relate to conditions of a collective agreement relating to minimum rates of pay or other specified minimum conditions.

Comment

The rule of evidence substantially deprived Swedish trade unions of the ability to enact industrial action against foreign companies. As a result, no industrial action on this point was enacted against employers from other EU countries in the years following the Laval decision. That may potentially change with the removal of the rule of evidence, as foreign employers who avoid signing a Swedish collective agreement have an increased risk of industrial action. We predict a trade union will seek to test the new legislation in the near future with a view to ensuring the employees of foreign companies enjoy the minimum working conditions stipulated by Swedish law.

Written by Jakob Nortoft of Glimstedt and Roger James of Ogletree Deakins