The latest Revision of Lex Laval in Sweden

Abstract

Posted workers have been a ‘hot potato’ in the European Union (EU) ever since the European Court of Justice of the European Union (ECJ) in the early 1990s declared that service providers may bring their own staff when they provide services in another Member State. After the enlargement of the EU in 2004 and the (in)famous judgement in Laval un Partneri, (C-341/05, EU:C:2007:809) the question of how to set terms and conditions for posted workers gained new momentum, both at EU-level and in the Member States. The initiatives at the EUlevel after Laval have already resulted in an Enforcement directive connected to the Posting of Workers Directive and during the fall of 2017 there are proposals to revise the posting of workers’ directive to ensure posted workers not only are paid the minimum wage, but rather the wage that workers are entitled to in the host state. This appears to connect to the attempt to address social issues as well as ‘market-making’ in order not to lose popular support for EU as whole. In the wake of the Laval judgment, the Swedish posting of workers’ act was amended to ensure that Swedish law was compatible with EU law. The changes are known as Lex-Laval and introduced a proof-rule according to which an employer could shield him or herself from collective action to enforce a local rate of pay if the employer could show that the posted worker had terms and conditions of employment (including wages) essentially similar to that in a collective agreement. This was regardless of whether the terms and conditions were set in an individual employment contract or a collective agreement. Lex-Laval has been the subject of criticism, both from Swedish trade unions, as well as the ILO-expert committee on the grounds that it violates core conventions on collective bargaining. Lex-Laval has now been revised and the changes entered into force on 1 June 2017. The background to the changes are both the EU’s Enforcement directive in relation to the posted workers’ directive (2014/67/EU) as well as suggestions made by a Swedish parliamentary committee. In this article, I will describe the most important changes. An overarching aim of the revision was to strengthen collective agreements as a way to set terms and conditions of employment and to shield the ‘Swedish model’ of labour market regulation and enable it to function also for posted workers. The legal issues connected to posting of workers have always been complicated, since they presuppose knowledge not only in national labour law, but also private international law and EU internal market law. The changes in the Swedish posting of workers act concern three different topics: First changes that aim to clarify how to identify posted workers, second changes as to when collective action may be taken towards employers posting workers and the effect of collective agreements concluded after such actions, and third changes to improve cooperation between Member States as well as the enforcement of the rules. After the changes entered into force on 1 June 2017 it is necessary to distinguish between three different types of posting of workers. Depending on the origin of the posted workers as well as the type of employment relationship, a trade union can make different demands for terms and conditions in a collective agreement. The first category are workers posted to Sweden from outside the European economic area (EEA). Collective action taken towards such employers to secure collective agreements will no longer be comprised by the special regulation in the posting of workers act and thus a trade union may make the same demands as those made in collective bargaining with a Swedish employer (See Section 1 a Posting of workers’ act). This is important given Sweden’s very ‘open’ employer-driven migration regime. When it comes to posted workers from other EEA countries different demands can be made depending on whether it is a ‘regular’ posting or if the workers posted are agency workers. If it is a regular posting the trade union may only demand minimum wage. In the situation when agency workers are posted the trade unions are...