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The Co-Determination Act (MBL) is a central legislation that regulates the relationship between employers and employees. The purpose of the MBL is to promote co-determination through negotiations between employers and employee organizations. It aims to increase employee involvement and the opportunity to influence the workplace. The law constitutes a cornerstone of labor law in Sweden since 1977.
When is the MBL applicable?
The MBL regulates, among other things, the obligation to negotiate, the information obligation, and the freedom of association. The law is intentionally general. Some parts of the MBL apply regardless of whether there is a collective agreement in the workplace or not, while others are only applicable to companies with collective agreements. The MBL is applied in matters concerning employers and employees, such as employment contracts, working conditions, work management, and when negotiations with employee organizations are needed.
General Negotiation Right §10
According to the general negotiation right, both employees and employers have the right to negotiate issues related to the relationship between employers and members of an employee organization. This applies for both current and previous employees of the employer.
It is an employee organization that can demand negotiation under the MBL; an individual employee cannot claim negotiation under this law. According to §6, an employee organization is defined as a group of employees that, according to its statutes, aims to represent the interests of employees against the employer. An employer organization refers to a similar association on the employer's side, representing the interests of the employer in relation to employees.
If an employee organization requests an employer to participate in a negotiation, the employer must do so. The obligation to negotiate applies even if the company believes that the organization's demands lack legal support. During the negotiation, the employer must be active and be able to justify their position on the matter. Ignoring the general negotiation right can lead to liability for damages for the employer. However, reaching an agreement is not a requirement.
Primary Negotiation Right §11
The primary negotiation right, regulated in §11, means that employers bound by a collective agreement are obliged to initiate negotiations with the employee organization to which the collective agreement is bound before a decision is made about a significant change, such as:
- Employer's operations. This could be, for example, termination due to operational reasons, appointment of a manager, or if the business is taken over by someone else. If there are multiple collective agreements with different organizations, the duty to negotiate applies to all of them.
- Employment. Some examples include termination for personal reasons, relocation, or new working hours. If the parties do not reach an agreement, the trade union can demand central negotiations. The employer must participate but is often assisted by its employer organization. If no agreement is reached, either at the local or central level, the employer can make the decision they desire.
Employers without a collective agreement must also engage in primary negotiations according to §11 if it concerns termination due to operational reasons or a business transition. This is regulated in §13.
Must the employer negotiate with the union during a reorganization?
In significant changes in the workplace, as regulated in §11 of the MBL, the employer is obligated to call for negotiations with the employee organisation.
Terminations due to shortages of work are considered a significant change in the business, and thus, the employer must negotiate with the union. These negotiations must be concluded before any terminations can take place.
Information obligation §18-22
The duty to provide information means that employers must continuously inform the employee organizations with which the company has a collective agreement about the company's development. This should be done at the initiative of the employer and include the company's development in production, finances, and guidelines for personnel policies.
The duty to provide information also applies to organizations without a collective agreement. In this case, they should inform the employee organizations of which their employees are members.
At Azets, we offer HR consulting. If you are in a situation where you need support, we assist with questions and negotiations. Feel free to contact us at hrsupport@azets.com.
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