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Conflict over part time labour stops Swedish trains

| Text: Kerstin Ahlberg, editor EU & Arbetsrätt

A train strike in southern Sweden has put renewed focus on how competition for public contracts affects the rights of the contractors’ employees, and to which extent the procuring authority can interfere in their working and employment conditions.

At 3 am on 2 July the trade union Seko stopped all Öresund trains operating between southern Sweden and Denmark, as well as the Snälltåget line between Malmö and Stockholm. The strike is still ongoing, and if Seko and the employer organisation Almega Spårtrafikföretagen fail to agree, industrial action will be extended to another line, Kustpilen.

At the core of the conflict is not a dispute over train personnel wages. It was spurred by an incident at one of Almega’s member companies, Veolia Transport, which is running traffic on the three train lines on commission from regional authorities. In March Veolia told 254 full time train drivers and train managers they would be made redundant because there were not enough jobs. The reason was new operational conditions imposed by the new contract coming into effect from 2015, said Veolia. The employer actually did not want to reduce personnel with more than 94 employees. The remaining 160 would be offered to stay - if they accepted part time contracts. In local negotiations Seko tried to convince Veolia to reduce the use of zero-hour contracts instead, which would reduce the number of redundancies.

Unions want limits on part time work

Parallel to the local talks Seko and Almega had a joint working group reviewing the entire central agreement for the railways. When talks at Veolia failed, Seko brought the issue into the discussion of the central agreement, and demanded the introduction of rules to limit the employers’ power to use part time and zero-hour contracts. Almega says no out of principle, and that is where the parties stand at the moment.  

Veolia’s action can probably be explained by the fact that the company put in a tender which was too low in order to secure the contract for Öresundstågen, and now staff and travellers must pay the price in the shape of weaker employment conditions and worse service, writes Seko in its notice of industrial action. The media is challenging the politicians who were responsible for the procurement, and lawyers are asked whether the procuring authorities can impose a limit to the number of part time and temporary contracts that service providers can use. Everyone remembers how the former Öresundstågen operator was forced to end its contract prematurely in 2011 because the company had accepted a procurement price which was so low that the operation ran with a loss.

Working conditions under pressure

It is hard to know whether Seko’s suspicions of Veolia putting in a ‘too low’ tender are correct. It is in any case a fact that competition for public contracts means increased pressure on working and employment conditions as more and more publicly financed activities are contracted out.

Swedish employers are for instance not obliged to apply collective agreements, and there are trades where employers who are bound by collective agreements feel it is not worth tendering for business because they reckon they don’t stand a chance.

Another example are the recurring procurements of services like local bus operations, municipal waste disposal, local boat transport etc. which do not lead to a transfer of undertakings or businesses in the labour law sense. If a new supplier takes over the contract from the present one, employees can be forced to accept lower wages and reduced rights in general if they wish to keep their job with the new contractor.

Fired with every new procurement

They might also have to accept losing their job every time the service is put out to tender, because their employer does not know whether the contract will stay with the company. In January the Swedish Labour Court ruled that nine workers employed to perform work under a service contract could be given notice of termination in the spring to allow their jobs to end on the same day that the contract would come to an end. In the autumn it transpired that the company would be given a new contract, but the workers were already fired. And that was OK, according to the Labour Court. The crucial point was what the employer knew about the future when the workers were given notice of termination.

This new reality has increased the number of conflicts over principles and terms other than wages during negotiations, according to the National Mediation Office’s annual reports. 

That is also why there is now increased pressure on authorities to draw up tenders which prevent competition for public contracts having a detrimental effect on workers, and for the new legislation that will transpose the new EU directives on public procurements to make this possible. But far from everyone agrees that authorities should interfere in the terms of employment offered by a contractor. There is also disagreement on what EU law allows, even though the new directives are clearer than the old ones.

Consensus on collective agreements

There is relative broad agreement in Sweden these days for authorities to be allowed to demand that suppliers follow certain conditions in Swedish national collective agreements, for instance when it comes to wages, as long as this is being done in the right way. Even the Swedish Competition Authority, traditionally most interested in talking about what is not allowed, is supportive of the idea.

Trade unions for workers in service sectors want authorities to demand that staff can stay if a procurement leads to a change of contractor, even if there is no transfer of undertaking in the sense of EU Directive 2001/23. The Competition Authority doubts that this will be in conformity with EU law, while the Swedish Municipal Workers’ Union has carried out a judicial inquiry which came to the opposite conclusion. 

However (going back to the original strike action), there is still no answer to the question whether Skånetrafiken could make it conditional for whoever would run the Öresundstågen line that they’d have to limit the number of part time and zero-hour contracts.

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