How the bargaining process works

Collective bargaining is the recurring process whereby employers' organizations and trade unions jointly negotiate newcollective agreementsthat regulate important issues such as wages, working conditions and other benefits. Negotiations often take place simultaneously in several areas and are known ascollective bargaining.

First up in the bargaining process is the industrial sector. They set the so-called mark, which serves as a norm for wage increases in the rest of the collective bargaining process. The benchmark is a central part of the Swedish model, and it influences how the collective bargaining process develops in IT, telecoms and tech as well.

Collective bargaining usually takes place every two or three years, depending on the duration of the current collective agreement. The length of the agreement is part of the negotiations, but usually the agreements are for one, two or three years.

In Sweden, the labor market is based on a unique model where employers and trade unions jointly negotiate wages and employment conditions in industry-specific collective agreements - without any government interference. This collaboration, known as the Swedish model, creates a flexible and stable labor market that combines good working conditions with companies' need for competitiveness.

The Swedish model gives employers and trade unions the opportunity to work together to create business-oriented solutions. For example, collective agreements regulate working hours, overtime pay and work environment issues in a way that is often better adapted to the specific requirements of the industry than general legislation can offer.

For IT, telecoms and tech companies, this is an opportunity to secure competitive and tailored conditions that meet the needs of both employees and the business.

A stable labor market with high social trust 

Clear rules and negotiations between the parties reduce the risk of conflict and strikes. The result is a secure and stable labor market with high social trust, which is a basis for long-term success in a competitive market.

In collective bargaining, negotiations between employers' organizations and trade unions play a key role in setting the terms of collective agreements, such as wages, working hours and other working conditions. For companies in the IT, telecoms and tech sector, these agreements are particularly crucial. The sector is highly competitive and characterized by rapid change, which means that terms and conditions need to balance flexibility and stability.

Here is an overview of how the negotiation process usually works in the collective bargaining process:

Preparatory work
Before the negotiations start, we gather the views and needs of our member companies. These can range from wage developments to specific industry challenges. This input then forms the basis for the demands, known as requests, which are then formulated.

Exchange of claims
Well before the end of the agreements, the parties meet to exchange their requests, which contain demands and requests for changes to the agreement.
These demands reflect the parties' priorities and form the basis for negotiations. Discussions often take place early on to create a common understanding of the areas that need to be negotiated.

Negotiations start
With the claims on the table, the actual negotiations begin. Initially, the focus is on:

This involves identifying common interests and clarifying any conflicts.

Final negotiations
As negotiations come to an end, the work usually enters an intensive phase.
The aim is to identify the issues on which the parties agree and to work on the issues where there is still room for further negotiations. During the final negotiations, the negotiating delegations are usually invited to meet in person. During this phase, long meetings - sometimes late into the night - are common to reach an agreement.

New agreement
When the parties reach an agreement, a new agreement is finalized for the upcoming contract period. The parties now inform their respective members of the content of the agreement. The new agreement enters into force and normally takes over where the old one left off.

TechSverige represents around 1,400 member companies active in the IT, telecom and tech industry. The collective agreements we negotiate are the IT Agreement and the Telecom Agreement.

IT agreement counterparties: Unionen, Akavia and Sveriges Ingenjörer
Telecoms agreement counterparties: Unionen, Akavia, Sveriges Ingenjörer, Ledarna, Seko.

A labor dispute can arise if the parties fail to agree on the terms of collective bargaining. If no agreement is reached, the parties can give notice of a dispute and take industrial action, such as strike, lockout, refusal of overtime or blocking of jobs.

As long as the collective agreement is in force, the social partners are subject to the obligation to maintain peace. This means that it is not permitted to take industrial action until the agreement has expired or been terminated.

Once the agreement is terminated and has expired, there is no longer any obligation to strike. Only the parties at central level can decide on a dispute, not individual member companies or employees.

Notice of conflict 

Before industrial action can be taken, written notice must be given to the other party and the National Mediation Office at least seven working days in advance. The National Mediation Office is a government agency responsible for mediation in labor disputes.

The notice must clearly describe the industrial action to be taken, who is covered and when it will be implemented. If a party wants to expand the dispute to more extensive industrial action or to include more companies, this must also be notified seven working days in advance.

Different types of industrial action  

In the event of a labor dispute, there are no specific rules on what industrial action is allowed, but some are more common:

• Strike is the most common industrial action taken by trade unions and involves employees stopping work. They are not allowed to return to the workplace during the strike.

• Lockout is the employer's equivalent of a strike, where the employer locks employees out of the workplace without pay.

• Blockade means that the trade union party prevents work in a company, for example by stopping new hiring or prohibiting overtime.

Industrial action can be directed against an individual company, certain groups of employees or entire industries. Employees who are not union members can choose to remain neutral.

Unions have the freedom to decide how to conduct their industrial action and can only take their own members into conflict. Employees who are not members of the union can choose to remain neutral.

Sympathetic action is also allowed during a dispute. This means that a union calls on other unions to take industrial action in support of another organization, even if the workplace concerned is under a peace obligation.

Mediation 

Mediation is a mandatory step before a dispute breaks out, where the parties must participate in a mediation process. Mediators are appointed by the National Mediation Office or according to a specific negotiation agreement between the parties, such as the Industrial Agreement.

The rules for industrial action and mediation can be found in the Co-determination Act and the Regulation on Mediation in Labor Disputes. You can read more about the Mediation Institute's mission at www.mi.se.

Exemption from conflict 

In some areas, the outbreak of a conflict can be dangerous for society if it risks disrupting essential functions.

Exceptions to conflict can therefore be made for protection work and areas where industrial action may cause socially dangerous consequences. What makes a strike action dangerous to society is not defined in advance, but is usually dealt with in the first instance between the parties to the conflict. The exceptions are regulated by the main agreement between the parties.

During the conflict 

The impact of the conflict depends on the industrial action taken. In some cases, work can continue as usual, but with some disruption.

During the conflict, TechSverige informs member companies about what is happening, discusses how the damage can be minimized and provides suggestions for practical measures. Our advisors are in continuous contact with directly affected member companies and provide support on issues such as what counts as protective work.

When the conflict is over

Once the parties have reached an agreement and signed the contract, the peace obligation comes into force, meaning that the conflict is over and the employees return to work.

Conflict compensation 

The Confederation of Swedish Enterprise's member companies have a joint conflict fund, where companies affected by conflict can receive compensation from the fund.

Instead, union members receive conflict compensation directly from their union.