The Swedish Labour System
Sweden’s leading law firm in labour law
Specialists in advanced negotiations
Representing employers and employees– in Sweden and abroad
The Swedish labor law system began to emerge as early as in the beginning of the 20th century in connection with the industrialization and the disadvantages that affected the workers. The hard-working employees joined forces and formed unions to pursue their rights. In 1906, the December Compromise was reached in which employers recognized the right of workers to form unions while maintaining their right to lead and distribute work. In 1928, the labour law court was established and the law on collective agreements was adopted, and during the 1930s, labour market conditions began to be regulated by the parties involved without any state intervention which was a radical change in Swedish labour law.
In the 1970s, workers' rights were strengthened when the Employment Protection Act (LAS) and the Co-determination Act (MBL) were passed by the Parliament. LAS now protected the employee from dismissal without a legal ground, while MBL gave employees influence over management issues.
Another major change came in 1995 when Sweden became a member of the European Union. The membership has led to some changes in labor law that have both strengthened and weakened the employee's position in relation to the employer. The membership has mainly resulted in a major change in Swedish development of labour costs in favor of the employer, as the previously national wage competition today is a European wage competition. The European wage competition extends the opportunities for Swedish companies to employ cheap labour from other EU countries which has opened the doors to a whole new labour market.
The laws that have emerged have affected the Swedish labour law system considerably in many ways, but have also received criticism based on the fact that the labour market has become rigid in such a way that, for example, smaller companies sometimes do not dare to hire new staff despite high demand due to the current labour market regulations.