In Sweden, the scope of collective agreements is very high, although there are no legal mechanisms to extend agreements to entire industrial sectors. In 2018, 83% of all private sector employees were subject to collective agreements, 100% of public sector employees and 90% in total (compared to the overall labour market).  This reflects the predominance of self-regulation (regulation by the labour market parties themselves) over state regulation in Swedish industrial relations.  Freedom of association and collective bargaining provide opportunities for constructive dialogue, not confrontation, which uses energy to focus on solutions that bring benefits to the company, its stakeholders and society as a whole. Although the collective agreement itself is not applicable, many of the negotiated terms relate to wages, conditions, leave, pensions, etc. These conditions are included in a worker`s employment contract (whether the worker is unionized or not); and the employment contract is of course applicable. If the new conditions are not acceptable to individuals, they may be contrary to their employer; but if the majority of workers have agreed, the company will be able to dismiss the complainants, usually unpunished. A collective agreement is obtained through negotiation. The Participation Act specifies that any trade union organisation and employers` or employer organisation has the right to negotiate in all areas that influence the relationship between the employer and the worker. This may be a settlement by an agreement not yet reached between the parties or a replacement of existing rules with new issues.
A bargaining right for one party means an obligation for the other party to participate in the negotiations. However, there is no legal obligation to reach an agreement (for more information, see “Participation in the Work”). Collective agreements are signed for certain periods, usually two to four years. A collective agreement is mandatory for both the employers` organization and its members, the union and its members, on the other. In addition, a collective agreement is generally also in practice, if not theoretically, for individual non-unionized workers and unionized workers who belong to a union other than the union that are part of the collective agreement, provided that (i) the worker works with collective agreement tasks and (ii) that the union to which the worker is affiliated is not bound by another collective agreement with the employer. Read also: The collective agreement has considerable benefits The ILO`s MNE statement encourages governments in national and host countries to encourage collective bargaining between multinational companies and their workers: “Governments, particularly in developing countries, should strive to take appropriate measures to ensure that lower income groups and less developed regions benefit as much as possible from the activities of multinationals.”  The MNE statement also states that “measures adapted to national conditions should be taken, if necessary, to promote and encourage the full development and use of voluntary bargaining mechanisms between employers or employers` organisations and workers` organisations to regulate employment conditions through collective agreements.”  The union may negotiate with a single employer (which usually represents the shareholder of a company) or with a group of companies, depending on the country, in order to reach an industry-wide agreement.