The Tuve plant of truck maker Volvo is one of two sites where layoffs were announced last week. Photo: Björn Larsson Rosvall/Scanpix.

Fixed-term employment trend worries union

"It makes them very vulnerable"
4:07 min

Swedish truck makers Volvo and Scania both say they are scaling back on the number of temporary employees.  The unions now say it is always workers on fixed-term contracts that take the blow in a financial downturn. But many think that companies must be allowed to respond to demand, and also defend temporary employment as a useful introduction to the job market.

The truck manufacturer Volvo recently announced it would not renew the contracts of more than 400 temporary employees. It cited the European financial crisis for the decision, but the same week announced a first quarter profit of more than $800 million. A second Swedish truck maker, Scania, has also said that about 450 workers on temporary contracts will have to look for work elsewhere in the beginning of next year.

Critics now say that temporary workers in Sweden have become "punching bags" or "shock absorbers". At the drop of a hat, they are the first ones to go if the markets turn sour.

But proponents say a flexible labour force is necessary to survive downturns in product demand.

In Sweden, the norm on the labour market has long been the permanent work contract. This is open-ended, meaning an employee is recruited for an indefinite period. They can of course still be fired for misconduct, or be laid off when there are redundancies, but their job security is generally very high.

So what does it mean for someone not to have a permanent contract? At The Industrial and Metal Workers Union in central Stockholm, former welder and union president Stefan Löfvén speaks with reporter Ann Törnkvist and explains what troubles face employees on temporary contracts. "This is very bad because they have a hard time getting a mobile phone subscription, or be able to rent a flat or whatever. It makes them very vulnerable," he says.

 His union is one of Sweden’s largest and organises about 350,000 members in heavy industries such as mines, steel works, manufacturing, and glass production to name but a few.

The union estimates that almost 10 percent of its members are nowadays temporary employees on fixed-term contracts. And if you look at the same proportion ten years ago, what would it be percentagewise? "I would say about perhaps half of it," says Stefan Löfvén.

What makes the situation for temporary workers in Sweden unique is that the law stipulates that a temporary contract must become permanent after about a year.

This law is not uncontroversial but is heavily defended by the unions. But in many cases, employees who fear being locked into permanent contracts simply say their goodbyes to temporary staff, and replace them.

Patrik Karlsson is a labour researcher at the Swedish Confederation of Enterprise which acts as a lobby organisation for companies and employees. He defends the fixed-term contracts because his analysis shows they create jobs.

“Approximately 300,000 persons move each year from a fixed-term employment to an open ended contract on the Swedish labour market. That means that fixed-term contracts are a very important springboard," he says.

One topic seemingly always on the political agenda is youth unemployment. Karlsson says fixed-term contracts are one way for the young to gain entry to the job market. "For them it is also very important that you don’t try to hamper the use of fixed-term contracts,” says Patrik Karlsson. 

Back at union headquarters, Stefan Löfvén says the government should instead focus on measures such as vocational training to introduce the young to the labour market.

 He thinks too many workers today are denied job security. "More and more people will be employed on fixed-term contracts and we believe the proportion is getting wrong now.”

 The long corridors of the union’s modern offices are lined in art. Paintings, prints and sculptures all chronicle the workers' movement in Sweden. 

A tapestry by Gothenburg textile artist Gunwor Nordström depicts two women framed by red banners, while several vivid oil paintings by the famously fiery artist Albin Amelin take pride of place in the collection.

When the financial crisis hit in 2008, about 50,000 of the union members lost their jobs. On a spreadsheet, Stefan Löfvén points to the ski slope tumble in employment and the slow recovery since.

About 25,000 of their members are in the truck industry, where Volvo and Scania recently announced their layoffs. Stefan Löfvén says the companies should be aware they also stand to loose from the fixed-term contract trend as employees don't stay long enough to gain expertise.

"It's hard for one who is only there for a short period. It’s harder for them to get as involved and engaged," says Stefan Löfvén.

Ann Törnkvist

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