Co-Determination at the Workplace

The Co-determination Act of 1977 incorporates a large number of rules which principally concern the relationship between the company as employer and the employee’s trade union organisations.

It is without doubt the single most important legislative act regarding employee influence at the workplace. The act is discretionary legislation which enables the parties on the labour market to come to more detailed agreements on participation by the employees by means of collective bargaining agreements. In addition to defining the prerequisites of a collective bargaining agreement (see under the section “What is a Collective Bargaining Agreement”), the act contains regulations governing the following main issues:

The Right of Association

The employee and the employer have a right to join associations and engage in activities through these without hindrance by the other side. This is referred to as the right of association. This right has been regulated by statute for many years and is the major legal ground upon which joint action by unions may be based. The Co-determination Act provides that the right of association shall not be violated. If an employer takes action against an employee on account of his/her trade union membership, or activity on behalf of the trade union, the employer may have to pay damages. Critical or adverse comments are not normally in themselves regarded as a breach of the right of association.

The Extended Right of Negotiation

According to the Co-determination in the Workplace Act, an employer is obliged to initiate and carry out negotiations with a trade union that has a collective bargaining agreement before making and implementing a decision concerning major changes at the workplace in general or for individual employees. This is referred to as the primary obligation to negotiate. Should the employee’s side so request, the issue may be referred to negotiations at central level. The employer must defer the decision and the implementation thereof during the entire negotiations procedure. As an exception from this rule, when special circumstances exist, the employer may take a decision and implement it before negotiations have been carried out.
In all other questions, a union bound by a collective bargaining agreement has the unilateral right to demand local and central negotiations. In such cases, the employer is also obliged to delay making the decision or to postpone implementation of a decision which already has been made. Again, should special circumstances exist, the employer may take and implement a decision, even though negotiations have been requested or are in progress.
The extended right of negotiation does not imply any legal obligation on part of the employer actually to reach an agreement. If the negotiations come to a conclusion without an agreement being reached, the employer is entitled to make his decision in whatever way he finds appropriate. The employer is also entitled to make decisions unilaterally once the negotiations have been completed.

The Extended Right to Information

The information rules in the Co-determination Act in principle imply that there should be an open attitude towards giving the employees insight into the progress and circumstances of the company in various respects. In the first place, the employer is obliged regularly to inform his local negotiation counterparts about the development of the business in financial and operational terms and about personnel policy guidelines. This obligation is called the primary obligation to inform.

The union is also entitled, upon request, to examine accounting records and other documents to which the employer has access and which, as an organisation, it needs in order to safeguard the common interests of its members. Copies of documents etc. need only be provided if this does not lead to unreasonable costs or difficulties. In certain exceptional cases, the employer is released from the obligation to inform.
The extent of the trade union representatives’ duties to keep the information that they have received confidential is primarily determined through negotiations between the parties. If no agreement can be reached, the employer must apply to a court for a decision concerning secrecy. Such a decision is only made if there would otherwise be a risk of serious harm being done. It should however be pointed out that trade union representatives are also always covered by either explicit or implicit clauses in their employment contracts which prohibits disclosure of confidential unformation.

The Interpretive Precedence etc.

In addition to the provisions regarding negotiations and information, the act also contains provisions that give the view of the trade union precedence before the view of the employer in certain disputes. The interpretive precedence is applicable until a court has decided on the matter. The issues where the trade union has this so-called interpretive precedence concern cases of disputes regarding the extent of an individual employee’s duty to work, disputes concerning wages or other financial remuneration and disputes regarding so-called co-determination agreements.
Furthermore, the act provides that an employer is obliged to enter into primary negotiations before deciding to engage a subcontractor, viz. to engage persons who will actually not be employed by the said employer. The counterparty to the negotiations is the union which the employer has a collective bargaining agreement with covering the work that the subcontractors shall carry out. There are only a few situations where the employer does not have to negotiate. The act provides that the central unions under certain circumstances have a right to veto the employer’s decision, thus preventing the employer from engaging a sub-contractor. This can only be the case if the sub-contractor can be shown to be disregarding laws or collective bargaining agreements or is acting in some other way in serious conflict with general practice in the relevant industry. The right of veto has a relatively restricted purpose and may therefore not be used to ensure that certain work is reserved for the employees at the company in question.

Act on the Position of Trade Union Representatives in the Workplace

Many of the rights granted to employees under labour laws in fact devolve upon the local union organisation bound by a collective bargaining agreement, viz. normally the trade union branch at the company. The basic protection for union activities is provided by the provisions in the Co-determination Act concerning the right of association (see above). The right of association applies generally to all employees.
The Act on the Position of Trade Union Representatives at the Workplace regulates only the position of trade union representatives. The law applies to employees who have been appointed by the local union organisations bound by collective bargaining agreements to represent the employees at their workplace in union activities which affect their relations with the employer. It should in this context be noted that the concept of union activities is extremely wide-ranging. The local union branch is in principle free to decide how many representatives are to be appointed at a workplace.
Union representatives may not be prevented from performing their union work and may not be given less beneficial terms and conditions of employment on account of their union activities. Needless to say, the representatives may not be discriminated against.
A union representative is entitled to such leave as is necessary for the performance of his/her union duties. This leave may not, however, be more extensive than is reasonable in view of the conditions of the workplace and may not be taken at a time which may seriously impede the performance of normal work. How much leave and when leave may be taken shall be decided after discussions with the employer. A union representative is entitled to unchanged salary and other benefits during leave for union activities relating to his/her own workplace.
The union normally has a interpretive precedence in case of a dispute between the employer and the union concerning the application or interpretation of the act, i.e. the union’s view shall prevail until the dispute has been resolved.

The Board Representation (Private Sector Employees) Act

The employees in a limited liability company, economic association and certain other types of companies with at least 25 employees are entitled to appoint two members and two deputy members to the board of directors of the company. Furthermore, in companies with at least 1,000 employees and which are engaged in several different industries, the employees may appoint three board members and three deputy board members. However, a prerequisite for the right to appoint board members and deputies is that the company is bound by at least one collective bargaining agreement.
The employee representatives should preferably be appointed from amongst the employees at the company or, for parent companies, from amongst the employees of the group.
The employee representatives have the same rights and obligations as the other board members. Furthermore, the employee deputy board members have an increased right to participate at the board meetings, as compared to the deputy board members appointed by the general meeting of the company. The employee representatives may not participate in dealing with issues that relate to the collective bargaining agreement, industrial actions or other issues where a union organisation at the workplace has a material interest that may conflict with the interests of the company.

European Works Councils

Since 1996 Sweden has had a European Works Council Act based on the European Council Directive 94145/EC on the establishment of a European works council or a procedure in community-scale undertakings and groups of undertakings for the purpose of informing and consulting employees.
Community undertakings covered by the Act must have at least 1000 employees in EEA countries and at least 150 employees in each of at least two EEA countries.
The Act, contains complicated rules for the establishing of a works council or some other model for employee influence.