international employment law firm alliance L&E Global

Sweden: Ongoing conflict between Tesla and the Swedish trade union IF Metall regarding collective bargaining agreement involving various trade unions from Sweden and their Scandinavian neighbours

Author: Nina Voigt Dahl

Collective bargaining agreements form the cornerstone of the Swedish labour market model, wherein the labour market is predominantly self-regulated by employer organisations and trade unions with minimal intervention by the state. In Sweden, approximately nine out of ten employees are covered by collective bargaining agreements. Upon the execution of a collective bargaining agreement, both employers and employees are bound by the obligation to maintain industrial peace. Violation of this obligation will incur liability for damages for the breaching party. As a result, the collective bargaining agreement plays a pivotal role in promoting a Swedish labour market characterised by minimal industrial actions, conflicts, or strikes. However, the right to strike is included in the Swedish constitution, rendering it a legally protected entitlement in the country. Thus, in the absence of a collective bargaining agreement, strikes are allowed.

IF Metall, the trade union representing industrial metalworkers in Sweden, organises 300,000 members across the manufacturing and chemical industries, mining, and automotive sectors. According to IF Metall, attempts to engage in discussion with Tesla over an extended period have proven unsuccessful. The primary aim behind IF Metall’s decision to undertake industrial action at Tesla’s workshops as of 27th of October is to ensure that its union members have fair and safe working conditions consistent with those established for members at comparable companies in Sweden. Conversely, Tesla claims that the absence of collective bargaining agreements is consistent with the company’s practices worldwide and, therefore, argues against their implementation in Sweden. This stance underscores the core divergence between IF Metall and Tesla, with the former prioritising standardised and industry-comparable working conditions and the latter emphasizing the adequacy of its existing arrangements.

In the wake of IF Metall’s strike at Tesla’s Swedish workshops, various other trade unions have adopted sympathy actions to bolster the campaign for collective bargaining agreements. For instance, the Swedish Transport Worker’s Union in Sweden has stopped all transports of Tesla cars into Swedish ports; the postal service workers have stopped delivering post to Tesla; and the electricians have suspended maintenance work for Tesla. These sympathy actions are permitted when the primary conflict is deemed legal, thereby allowing such actions to disrupt industrial peace, even in instances where collective bargaining agreements and the associated obligation to maintain industrial peace pertain to one’s own contractual domain.

The use of sympathy actions introduces a challenge to the efficacy of the collective bargaining agreements as the assurance of industrial peace becomes compromised. The use of sympathy actions has been a topic of debate within the government. All three major political parties within the government have said that they want to restrict the right to sympathy actions. As for now, however, the conflict has spread over the borders since trade unions in Norway, Denmark, and Finland have given notice that they will join the Swedish strike and stop the transport of Tesla cars to Sweden.