Swedish Metal Workers Union agree to a 20 per cent pay cut

The Swedish Metal workers Union have agreed to a 20 per cent pay cut in return for a guarantee that no redundancies will be introduced in the sector by employers. Take a pay cut of 20 per cent to ensure that collectively no jobs will be lost.  The article can be found here.

Many will ask the question: why is Irelands centralised wage agreement (social partnership not equiped to introduce pay cuts?).  For me, it illustrates the difference between centralised and decentralised wage agreements. Income policy is decided at a local bi-partite level in Sweden. It would be  very difficult for ICTU to agree to a  20 per cent cut for specific sectors in a centralised arrangement. Thus, what is lacking is SP, maybe, is the capacity to negotiate wages/ wage cuts for different sectors. In Ireland, many private sector companies have introduced 20 per cent wage cuts. The difference therefore with Ireland, is that these were carried out unilaterally, whereas in Sweden, it was done in conjunction with the Swedish Metal Workers.

I spoke to someone over the weekend who teaches IR in NCI. He commented that because Social Partnership has centralised all wage agreements, most shop stewards, union officials and HR managers have never negotiated a wage agreement/cut in their entire career. They are completely unused to a decentralised situation. A negative consequence of SP for him, is that the very process of collective bargaining has been lost on a new generation of union officials/ HR managers. They are more used to referring everything on to the LRC, via centralised congress.

It will be interesting to see if other unions in Sweden follow suit.

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