Report of the Commission on Industrial

Relations in Sweden

[Footnotes will be found at end of report]

The President's instructions in his letter of June 22, 1938, to the members of the Commission were as follows:

With reference to my letter of June 16th relative to the investigation of labor conditions in Great Britain, I should appreciate it if, in the course of your investigation, you would arrange to proceed to Sweden and prepare a similar report on employer-employee relationships in that country.

I trust that your report to the Secretary of Labor will deal fully with the situation as you find it to prevail in Sweden and the reasons therefor.

I. THE COMMISSION'S STUDIES IN SWEDEN

1. The Commission conferred with the representatives of the Government dealing with the major policies affecting industrial relations. These included the Ministers of Foreign Affairs, of Finance, and of Social Affairs. Within the Ministry of Social Affairs we met with the officials of the Social Board, whose administrative functions include the supervision of the conciliation service; with two former conciliators of wide experience, who are now Provincial governors but are still called upon to act in the more important industrial disputes, and with the presidents of the Labor Court and of the Labor Council.

2. For the most part employers in Sweden are organized to deal with labor matters in industry-wide associations. Most of these associations are members of the Swedish Employers Federation. The workers are organized in national unions, and these are members of the Swedish Confederation of Trade Unions. We conferred at length with the leaders of these two major organizations, as well as with several leaders of national employers associations and of national unions. We also met with individual employers, both within and without these organizations.

3. We were supplied by the Swedish Government with a full statement in English of the present social situation, including employer-worker relations; by the employers and workers organizations with an agreed joint statement in English of employer-worker relations and by the International Labor Office (I. L. O.) with translations of all of the relevant laws. Study of these documents, supplemented and checked at the conferences to which we have referred with the aid of able interpreters from the I. L. O. and from the Employers Federation and the Confederation of Trade Unions, gave us an adequate picture of the salient factors, which are herein discussed.

1

4. We take this opportunity to express to these officials and private citizens of Sweden our appreciation of their generous assistance and courtesy. Throughout our investigations we received most helpful and well-informed cooperation from our own diplomatic and consular officers.

5. Sweden has a population of 64 millions of people. Not so many years ago, Sweden, long agricultural, began to develop industrially, especially in forest products and metals, of which they have great natural resources. Later came metal fabrications. One-third to 40 percent of its total industrial output is now exported, 50 percent of the exports being in forestry products and 35 percent in metals and metal fabrications.

II. PRESENT PROCEDURE IN WORKER-EMPLOYER

RELATIONS

(a) ORGANIZATION OF WORKERS

6. The national organization of workers in labor unions in Sweden may be traced back to the eighties. In 1888 a small federation of unions in the metal industry was established on a national basis. In 1898 several national unions combined to form a national Confederation of Swedish trade-unions. The object of this confederation was to unite the interest of the workers in all trades and industries. Its present constitution is set forth in appendix A. In June 1938 the Confederation included 42 trade-union federations with 7,135 local unions, having a total membership of about 850,000 workers. This represents approximately 65 percent of all manual workers and persons in similar positions (excluding domestics).1 The Confederation has accumulated a reserve fund of approximately 120 million crowns (approximately 25 cents each). From this fund benefit payments are made to its members, in case of a strike or lock-out.

7. Originally many constituent unions of the National Confederation were craft unions. Since 1909 the Confederation has frequently expressed a preference for organization and collective bargaining on an industry basis and most of the constituent unions today are of the industrial type. Each of these carries on collective bargaining for all of the workers in its own industry. However, craft unions exist in the building, printing, and other trades. These craft unions frequently negotiate jointly as a group or federation with the employers organization in their industries.

8. The degree of organization varies in different occupations. It is higher in industry, handicrafts, commerce, and communications and lower in agriculture and forestry. Among manual workers in the manufacturing industries it is estimated to be approximately 90 percent. Although the Confederation unites most of the Swedish organized workers, there are some five small unions not affiliated with it and having a combined membership of about 150,000. Most of these cooperate with the Confederation on a variety of common issues.

(b) ORGANIZATION OF EMPLOYERS

9. The oldest of the more important employers associations, the Swedish Engineering Employers Association (which includes the manufacturers of machinery products, such as automobiles, ball bearings, electrical apparatus and appliances, machine tools, and so forth), was formed in 1896 to protect the employers' interests against the organized workers. After the general strike in 1902, the Swedish Employers Federation was organized. Its present constitution is set forth in appendix B. In 1917 the Engineering Employers Association joined the Federation. The Federation now includes 37 associations of employers in particular industries, with 5,000 employer members employing nearly 400,000 workers. The Employers Federation has a reserve fund of approximately 25 million crowns, and in addition a guarantee fund of approximately 65 million crowns. Each employer member makes himself individually responsible for the guarantee fund in the amount (subject to some exceptions) of not less than 200 crowns per adult male worker in his employ. The Federation dues from which the reserve fund has been accumulated are 10 percent of the employers guarantee, normally 20 crowns per year per adult male worker employed. If a member engages in a strike or lock-out approved by the Federation, he is entitled to benefit payments from the Federation. The Federation has power to order a lock-out, and every member in the industry affected is bound to obey the order "on pain of damages" and of forfeiting his rights in the Federation.

10. The Employers Federation is not so broadly inclusive as the Confederation of Trade Unions. Because of the very considerable financial burden of membership in the Federation, many of the smaller employers prefer to stay out of it, but nevertheless follow the agreements it makes with the unions as to hours, wages, and working conditions. The majority of the members of the Federation belong to the manufacturing industries; no State or municipal employers are affiliated with it. For agriculture, forestry, shipping and private railways, hotels and restaurants, and a number of minor handicrafts there are independent employer organizations, covering employers of somewhat more than 50,000 workers. There is a certain amount of cooperation between the Federation and these smaller and specialized employers organizations through the Advisory Council of Swedish Employers. The policy of the Federation with respect to collective regulation of labor conditions is the dominant influence on the employer side.

11. The Employers Federation, soon after it was organized, decided that the course of events provided sufficient ground for the recognition of trade-unions and the regulation of conditions of employment by collective agreement. At the end of 1906 an agreement was reached between the Employers Federation and the Confederation of Trade Unions whereby the employers undertook to respect the workers' right to organize, while the workers recognized the employers' right to manage the undertaking and to engage and dismiss workers without regard to whether they were union members or not.

12. This agreement between the Employers Federation and the Confederation of Trade Unions, the substance of which is incorporated in the basic agreements for the several industries, excludes the closed shop in plants belonging to members of the Employers Federation, and we found no closed-shop contracts with employers not members of the Federation. We found no instances of the check-off. The closed shop is not a significant issue in Sweden, because of the very large proportion of workers who are union members and because the employers no longer try to break down union organization, preferring to deal with their workers through strong trade-unions. On the other hand, the employers are not asked by the unions to exercise, and they do not exercise, pressure upon their employees to make them join the unions.

13. The incorporation of these provisions in the basic agreements is also effective to protect the workers from discrimination because of union activity. We were told that under these agreements discrimination is not a significant problem. If it does occur, or is charged to occur and the charge can not be amicably adjusted by the conciliation machinery established for the industry, then the dispute goes to the Labor Court, which has power to decide it and to order reinstatement and back pay if discrimination is established.

(c) COLLECTIVE AGREEMENTS

14. At the end of 1936 there were 7,014 agreements covering 769,172 workers in the employ of organized and unorganized employers. The basic agreements between the employers' associations and the unions are voluntary, and collective in the sense in which that word is used in England. That is, they are not agreements between a single employer and a union. They are agreements negotiated collectively by representatives of a group or association of employers (commonly an industry-wide association) and representatives of a union or a group or association of unions. The agreements apply to the unorganized workers, as well as to the organized workers, in the plants of the employers covered by such agreements. The agreements are binding upon anyone who joins the contracting federation or association during the term of the contract, and they remain binding upon persons who leave the association or federation during that

time.

15. The method of reaching collective agreements is by informal discussion by joint committees of the trade-unions and employers associations. The workers' representatives and employers' representatives, members of such joint committees, were outspoken in their respect for each other. The principal officers and negotiators of the employers' association and the Confederation of Trade Unions gave us an agreed joint statement on industrial relations in Sweden and met with us jointly in a very frank discussion of the subject, during which all the questions we had to ask were answered without hesitation. The entire process of collective bargaining is voluntary, and both workers and employers prefer this method to any kind of compulsion on the part of the Government, or even to arbitration. The value attached by both sides to this voluntary system, and to the