KNOWLEDGE-SHARING AND CAPACITY BUILDING

90% of Laid-off Workers in Sweden Find New Jobs

The following case study comes from Sweden and was produced by the Swedish Institute – a public agency that promotes interest and trust in Sweden around the world. The case details how unions and employers cooperate to set wages, solve labour disputes, and help laid-off workers find new jobs.

Sweden’s approach to career transitions
When an employee is laid off in Sweden, a support system helps them transition to a new job. This system is comparable to an insurance plan and consists of so-called job security councils. The councils are operated independently of the state by employers and trade union federations. About 90% of workers who receive help from the councils find new jobs within six months to two years.

The Swedish labour market model
The job security councils form a part of the Swedish labour market model, which is based on collective agreements instead of minimum wage laws and other labour regulations. Together, trade union federations and employer associations negotiate and regulate wages and other terms of employment. Labour disputes are primarily resolved through negotiation rather than strikes. The state’s involvement is limited to regulating how collective agreements and industrial action should work. Each collective agreement applies to all unionized and non-unionized employees in that sector, as long as their employers have entered into the agreement. In total, 90% of the country’s workforce are covered by collective agreements.

Job security councils
The job security councils provide support for displaced workers and complement the Public Employment Service. Each council covers a different sector and is run by union federations and employers and funded by the latter. This joint ownership lends the councils a high level of legitimacy and room to negotiate and act. They cooperate with other private and public institutions, and can offer education, training, career counselling and financial aid. The support is always tailored to the individual’s needs.

Benefits beyond the individual
The job security councils benefit not just workers but also employers and society at large. Worker morale remains higher when displaced colleagues receive support. The system also helps other employers quickly recruit competent and experienced staff. This keeps unemployment down and helps the country adapt to changes in the labour market brought about by globalisation and technological advancements.

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