The Swedish labour market

The labour market is often divided into a private and a public sector. The labour market in Sweden is covered by specific legislation to create a fair labour market. However collective agreement is the most significant and central form of regulation.

The private and the public sector

The private sector is defined as being made up of profit driven enterprises with private owners. They may be anything from small companies to large manufacturing organisations and white collar companies. 

The public sector is owned and operated by the state, funded by taxes and includes all of the departments, agencies, regions, municipalities, emergency services, hospitals, universities, and government owned companies and foundations. 

The Swedish labour market is regulated by many laws and agreements. Some of the most important laws and concepts are outlined below. 

The Swedish model

The Swedish labour market model means that the parties in the labour market – employers and employees, through their organisations – regulate a great deal of the labour market. The state has a passive role as legislator and does not actively participate in negotiations between the parties.

The labour legislation creates a fixed framework, while pay and working conditions, among other things, are handled through collective agreements that the parties in the labour market have agreed on.

A great deal of labour legislation is formulated in such a way that the parties in the labour market can deviate from these parts through collective agreements.

The Act (1982:80) on Employment Protection, LAS

LAS primarily protects employees from unfair dismissal by regulating conditions for termination of employment, order of priority according to employment date with mass layoffs and notice periods.

The Co-Determination in the Workplace Act (1976:580), MBL

This law regulates collective workers' rights in the workplace. The purpose of the legislation is to promote the ability of workers to affect workplace conditions through collective action.  

Employers are obliged to negotiate with the union representatives according to MBL before a decision is taken to major changes in activities that affect staffing levels or changes conditions for individual employees.

The Leave Act (1977:480)

Employees in Sweden have the right to paid holiday. The act regulates the vacation year, vacation leave, vacation pay and vacation allowance.