The collective bargaining process is underway, and the industrial agreement is, as usual, the first out, with the involved parties having exchanged their demands at the turn of the year. The industrial agreement sets the benchmark for the Swedish labour market during the upcoming agreement period. Once the industrial parties have reached an agreement, the other agreements that follow this benchmark can proceed with their negotiations.
What Should Employers Pay Attention To?
Since labour costs are often a company's largest expense, it is wise to stay informed through updates from your employer organization (which typically represents you as an employer during the negotiations). Many employer organizations compile news about agreements, new conditions, and wage adjustments in regular newsletters.
Even an employer who is not bound by a collective agreement may still be required to conduct a salary review or even adhere to a collective agreement, depending on the wording of the employment contract between the employer and the employee. If you haven’t yet clarified what applies to your organization, now is the time to start this process.
Staying Updated is Crucial
Regardless of the outcome of the negotiations, you as an employer are obliged to follow the provisions of the agreement. From a sustainability perspective, adhering to the collective agreement (for affiliated companies) and industry standards is crucial to maintain and attract potential investors, customers, and employees.
Failing to comply with a collective agreement by not applying the new terms could result in union negotiations, legal disputes, dissatisfied employees, and, not least, damage to your company’s reputation.
Retroactive adjustments may also become relevant due to the time gap between the signing of a new agreement and the practical implementation of its provisions. It is essential to minimize delays to avoid unnecessary administrative work and wasted resources. Make sure you have clear routines regarding who monitors the new agreement terms and ensures that the relevant information is promptly communicated to the affected individuals.
What Actions Should Employers Take?
Beyond monitoring updates from your representative in the negotiations, it is crucial to share all relevant information regarding the new collective agreement with the people responsible for your payroll processes and personnel management. Keep in mind that certain roles and departments may need to review and adjust policies and internal processes to align with the new agreement.
If you have outsourced your payroll processes to an external partner, you must also provide them with the necessary information about the updated terms.
As a client of Azets, we can assist you in interpreting the changes in your new collective agreement to determine whether they impact payroll calculations or require adjustments to your payroll procedures to comply with the new regulations. We also offer advisory regarding HR-related aspects of collective agreements, such as changes to employment terms or pension provisions.
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