The Swedish labour market model, known as “the Swedish model”, is based on parties in the labour market – trade unions and employers – regulating pay and conditions, working environment, retraining, occupational pensions, insurance and much more in industry-specific collective agreements.
Legislation constitutes a framework within which the parties have considerable freedom to regulate, and in many cases improve, pay and conditions. Negotiations take place at central as well as local level, and while the content and structure of collective agreements may look very different – they are all the result of negotiations conducted without government interference.
These industry-adapted collective agreements create opportunities for unions and employers to jointly achieve practical and operational solutions. The model creates good conditions for employees while at the same time protects business competitiveness. It creates stability in the labour market. When a collective agreement is in place, a duty of stability exists between the parties.
If disputes do arise, the Swedish model ensures that the parties negotiate and attempt to reach agreements without resorting to legal action. Only when a negotiated solution cannot be reached is it possible to take legal action.
The ability to easily amend collective agreements means that the parties can quickly address challenges as they arise, whether they are related to working conditions in a pandemic or reforms necessary for changes in working life. For the model to work, it is important that the social partners and the state respect each other’s roles and interests.
The Swedish labour market model is sustainable, adaptable and creates stability in times of change. It provides stability at work, long-termism, democratic participation in the workplace and has contributed to a high level of social trust in Sweden.