In the Swedish office of 1Office, we are getting more and more questions about trade unions and topics related to collective agreements. Naturally, we are always happy to answer your questions, but with the following blog post we will try to proactively answer some general questions.

In Sweden, membership in a trade union is very common – and about 70% of employees belong to them. The trade unions are divided into sub-groups based on their area of activity, and their activities are regulated centrally by the Swedish Trade Union Confederation (Landsorganisationen i Sverige or LO). On the other hand, there are also employers’ associations, and their activities are regulated by the Confederation of Swedish Enterprise (Svensk Näringsliv). About one in ten enterprises belongs to this confederation.

The Swedish labor market is primarily regulated by agreements between the parties. The collective agreements determine both the working conditions and the wages. There is no official minimum wage in Sweden – the trade unions establish the rate based on which the employees should be paid, and the employers’ associations establish the minimum that must be paid. Naturally, these numbers are not the same and the minimum rate established by the employers’ association is always lower than the one established by the trade union. In addition, every year the trade unions apply for an increase in the wages rate. This is one of the reasons that it is important for a company to belong to an employers’ association – this provides the company with greater freedom, and it does not have to fulfill all the conditions established by the trade union.

Therefore, the trade unions protect the employees’ interests and the employers’ associations protect the employers’ interests. However, a company decides if its employees join a trade union and it joins an employer’s association since the employees join the trade union through their employer. Since negotiations occur between these two parties, the question may arise – why join a trade union at all? The pressure to do so often comes from the general contractor. For small companies, which often operate as subcontractors, membership in a trade union is often a key issue when it comes to getting contracts for various projects.

Our recommendation is – if the company is a trade union member, it is definitely wise to join an employers’ association in order to protect one’s interests.

If necessary, we can to help to coordinate your membership with a trade union, as well as your tax registration.