Employment Protection Law permit bargaining outcomes that may entail not only higher but also
lower levels of protection.
As collective agreements cover practically the entire labour market, the potential impact of
this “negotiated flexibility” is considerable. Collective agreements may lower worker protection
in existing contractual forms, for example, by permitting longer than the statutory maximum
probationary period of six months. They may even allow contractual forms that are not explicitly
permitted in statutory law. For example, several agreements in the trade and transport sectors
permit contracts termed “called when needed”. However, it does not seem to be the case that the
regulation of fixed-term contracts in collective agreements is generally more liberal than
statutory law.3
International comparisons of employment protection indicate that Sweden has a fairly
restrictive legislation, although it does not stand out as extreme by European standards.
According to OECD (1999), the legislation in Sweden is less restrictive than, for example, in
Germany and France but stricter than in Belgium and The Netherlands. However, these rankings
have serious limitations as regards the enforcement of regulation, a point made by Bertola et al.
(2000). The capacity of the employee to give effective voice to perceived violations of his or her
legal rights is a vital factor in ensuring the observance of labour law. One would expect that the
exceptionally high rate of union membership and the almost universal union presence at the
workplace in Sweden would lead to both a high level of awareness of employment protection
rights and provide the capabilities and resources to pursue these rights; first at the work place,
and if need be, in the Labour Court. The costs for the employer for non-observance of the law are
pecuniary (fines and damages) and court judgments that transfer a fixed-term to an open-ended
contract.
3 Storrie (1995) found that the length of the probationary period in collective agreements for blue-collar workers in
the private sector was generally shorter than the six months permitted in law.