Do we need to sign a collective agreement when posting workers to Sweden?

Sweden’s labour market model is based on an interaction between labour legislation and collective agreements. While the law sets minimum standards, collective agreements often go further, covering a broader range of employer obligations. For companies posting workers to Sweden, the Swedish model of labour laws and collective agreements can create confusion and misunderstandings regarding which rules actually apply, especially since a posting company must also comply with EU law as well as rules and collective agreements in the country of origin.

To help posting employers entering negotiations for a collective agreement, we’ve put together a list of key aspects to consider.

Do we need to sign a collective agreement when posting workers to Sweden?

There is no legal obligation to sign a collective agreement when posting workers to Sweden, and a posting employer has the right to conduct its business in Sweden without signing any agreement with a Swedish trade union. However, there might be a commercial obligation or benefit to sign a collective agreement based on the business relationship between the posting company and its client.

Can a trade union try to force our company to sign a collective agreement?

A trade union only has the right to use collective action to try to force a posting employer to sign a collective agreement if the terms and conditions of that agreement regulates the following areas:

- wage,

- reimbursement on expenditure on travel, board and lodging (for travels in Sweden),

- corresponding provisions on the areas covered by § 6 in the Swedish Posting of Workers Act (similar to the hard-core of the posting of workers directive) and,

- if the level demanded corresponds to the levels of a central collective agreement that is applicable nationally in Sweden to domestic workers in the same position and branch.

How do we know what terms and conditions that can be demanded through collective action?

According to the Swedish Posting of Workers Act, a trade union must provide the Swedish Employment Agency with the terms and conditions that the union have the right to initiate collective action for, i.e. the “minimum requirements” a posting employer must fulfil to ensure being protected from collective action. These terms and conditions are often published on the Swedish Employment Agency’s website as “Collective agreements for posted workers”. There is no guarantee however that the agreements published on the Swedish Employment Agency only includes the “minimum requirements”, wherefore a legal analysis of the actual agreement should always be made before signing.

What happens if we sign a collective agreement?

If a posting employer signs a collective agreement, whether the agreement was signed voluntarily or under pressure due to collective action initiated by the trade union, will have severe consequences for the matter of which rules a posting employer must follow.

If signed voluntarily, the employer will be bound by all the provisions of that agreement even though the agreement might regulate areas beyond what is required according to Swedish and EU law. If a posting employer is forced to sign a collective agreement due to a threat of collective action, the agreement should only cover the “minimum requirements” as described above and if such an agreement would still cover areas beyond the “minimum requirements” the employer can claim the agreement to be invalid or have a limited legal effect.

Conclusion

Businesses posting workers to Sweden are not obligated to sign a collective agreement but a trade union can try to force an employer to sign a collective agreement covering the “minimum requirements”. If an employer voluntarily signs a collective agreement the employer will be bound by that agreement regardsless of whether the provisions within the agreement goes beyond the “minimum requirements” which the trade union has the right to demand.

As described above, questions regarding collective agreements in a posting situation are complicated and hopefully this post has provided clarity on some of these complexities. If your business needs further guidance or legal advice on navigating the Swedish labour market, don’t hesitate to contact us—we’re here to help.