Sweden: “More social dumping” after easing of labour immigration laws

Proponents of freer labour immigration often talk about highly educated computer specialists or other experts who are needed to fill companies’ needs for special skills. But since employers have been given the right to define when there is a shortage of labour, in reality far more people than those with special skills are coming to Sweden. Many third-country workers are hired for jobs in the hotel and restaurant trade, in construction and in cleaning jobs. They are often promised conditions which do not materialise.

Slave-like conditions with long working hours, low wages and people being afraid of complaining - this is part of the reality witnessed in many workplaces by the Hotel and Restaurant Union, HRF. It is worried about the level of exploitation it sees, but also about the fact that conditions within the trade are pushed down and that the collective agreement is being undermined.

“It is very good that people come here to get a better life. They help develop our trade and we see an enormous cultural development mostly in the restaurant trade. The problem is that there are powers in Sweden that exploit people who want to come here, and allow them to work in slave-like conditions. We meet employers who don’t care about people, only money,” says Per Persson, ombudsman at HRF’s Stockholm office.

Unannounced visits uncover breaches

Since 2008 the HRF has seen a strong increase in the number of work permit applications from third-country workers, and in 2011 the HRF’s eight local offices dealt with over 5,700 work permits approved by the Swedish Migration Board. The union checks that each applicant fulfils the demands on working time, wages and other conditions. Whether that information matches reality is a different story. HRF carries out regular unannounced visits to restaurants to check on the conditions of third-country workers. In the long term this is to make sure existing collective agreements are not being undermined. In its report ‘At any price?’, built on visits to 64 restaurants during 2011 and 2012, the HRF document that all the restaurants were in breach of collective agreements because of mispayments of salaries - which were often non-existent or very low. 61 in 64 restaurants were in breach of the agreement’s rules on employee protection, working hours and more. HRF describes the fates they encountered and the conditions they want to change. 

“We have met people who work 12 hour days, seven days a week with no chance for rest. We have met people who scrape by on 3-4,000 kronor (€360-€480) a month. If they protest they loose their right to stay in Sweden.

“We meet people who have paid vast amounts of money to get here, and once they’re here many of them are hardly paid at all. If they complain they risk loosing their job and will then only have three months to find another. This means only a few of them find their way to us, and if they do it is often when they are on their way back home. Only then, perhaps, do they want and dare to talk,” says Per Persson.

HRF also witnesses the kind of money that can be made on this trade. Middle-men get paid to help employers fix the practicalities around work permits, and people pay to obtain one. Persson mentions one middle-man who has sent in more than 1,000 work permit applications. 

“It costs at least 25,000 [kronor] (€3,000) per application, so we’re talking incredible amounts of money. And middle-men don’t care about individual destinies,” says Per Persson.

OECD’s most liberal legislation

Today’s law on labour immigration came into force in December 2008. From the start there were many warnings about the consequences of removing the labour market test which the Swedish Public Employment Service had used to carry out. It meant the employment service would assess the need for labour before employers were allowed to recruit from third countries. The new rules allowed each individual employer to determine whether there was a need for imported labour for his or her particular company or trade. They would then hand in an application to the Migration Board detailing salary, working hours and other conditions. One rule said no-one could earn less than 13,000 kronor (€1,560) a month, because anyone who were granted a work permit should be able to support him or herself. Unions had a say, but had no veto right. Another condition obliged employers to advertise the job for ten days on the European job mobility portal Eures.

This was a change to the legislation which the Confederation of Swedish Enterprise had worked towards for a long time. The organisation's lobbyist was even named lobbyist of the year in 2003 for the work on this issue. The centre-right government coalition also wanted to use the legislation to strengthen the rights of employers to freely define the need for labour, and it voted the proposal through with the support of the Green Party. 

Trade unions warned that the new legislation could lead to a trade in work permits and that foreign workers would become far too dependent on an employer, which could lead to labour exploitation. Other organisations too were sceptical about ditching the labour market test. The Institute for Evaluation of Labour Market and Education Policy, IFAU, wanted a clear definition of the term labour shortage, and also warned that workers could become far too dependent on their employer. 

A difficult debate

Thord Ingesson, an expert on migration politics at the Swedish Confederation of Trade Unions (LO) specialising in labour immigration, has followed the development before and after the 2008 change to the legislation. He is very critical both to the way in which the law was introduced and to the way it works today. The debate has also been a difficult one. Critics have had to face allegations of being protectionist and anti-immigration, while those in favour of the liberal legislation have had the freedom argument on their side, allowing them to argue that it should be easy to come to Sweden to work and study.

“You couldn’t talk about this becoming a problem. Now things have changed,” says Thord Ingesson. 

He defines the law as a ‘complete fiasco’ and it has been controversial since the start. Many newspaper articles, TV and radio programmes have detailed the law’s effects in the light of the exploitation of third-country workers. As late as mid February this year labour immigration was the subject of a parliamentary debate. From January 2012 there has also been a tightening of regulations within certain trades. In the hotel and restaurant business employers must be able to guarantee workers‘ wages for at least three months, and show that they are on top of tax payments. 

“The problem is that labour is being imported to areas where there is no shortage, for instance in the hotel, restaurant, cleaning and construction industries. It should be possible to fill LO jobs with some of the EU’s 25 million unemployed, and the question then is why should employers have to recruit from third countries? Our impression is that cheap labour is tempting,” says Thord Ingesson.

Some say a Swedish work permit is the easiest way to get into Schengen. This has meant the emergence of a business in work permits, and Thord Ingesson says he has seen hundreds of cases where money is involved in the work permit process. He has also heard similar stories from the Swedish church and other aid organisations.

Meanwhile the Migration Board lacks both the opportunity and authority to look closer into the applications which come their way. So far no employer or middle man has been prosecuted for doing business with work permits. 

Just like Per Persson at the HRF, Thord Ingesson points out that they are not opposed to regulations which make it easier for people from third countries to come to work in Sweden. They just want to change and improve the rules for how this happens, in order to stop less than serious companies. The job offer must be binding and the employee must also be given the chance to stay in the country for the duration of his or her work permit, even if he or she leaves a job with bad conditions. Trade unions also want sanctions for employers who break the agreement, and the Migration Board must be given a mandate to follow up the decisions it makes. 

“The worst thing now are the people who are being exploited and who are struggling to get compensation,” says Thord Ingesson.