Less Work, Less Pay, But Keep Your Job

Sweden’s industrial union IF Metall and employers groups signed a historic deal Monday, instead of workers being fired, they’ll be allowed to take time of for training, but will also see their pay cut.

The union and the employers have taken a look over the Baltic Sea to continental Europe for their inspiration.

In Belgium and Germany, for example, it’s quite common for employers to cut workers working hours and pay when times are hard, and Estonia, Latvia and Lithuania are currently using the system in the public sector as a way to save money, but without having to lay off staff.

Swedish unions have long opposed this kind of scheme, not seeing how it will save jobs. After all, if a company is struggling so badly, it may very well go bust anyway, and then unemployment benefits will be based on the workers last, and much lower salary, rather than the one they had before the crisis, so it could be a lose-lose situation for workers.

But the head of the union, Stefan Lövén says drastic times call for drastic measures, he says that for some companies the only alternative to cutting working hours and pay would be redundancies.

The deal means that workers may go down to a two day week, get a day for going back to school, for example, and then have two days off, but will then lose 20 percent of their pay packet. But that’s the limit according to the new agreement. Even if they work even less, employers won’t be allowed to cut pay any further.

The deal will be in effect for a year, and then the union and employers will see what effect the agreement has had.

But other blue-collar unions aren’t as positive. The Electricians union, the Forestry Workers union and the Construction Workers Union all say that this kind of agreement is inconceivable for their members. Employers organizations are more optimistic however, and experts say the ground-breaking agreement may lead to similar deals in the future.

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