The labour market is often divided into a private and a public sector. The labour market in Sweden is covered by specific legislation to create a fair labour market. However collective agreement is the most significant and central form of regulation.
In the private sector there are profit making companies with private owners. They may be anything from small companies to large manufacturing organisations and white collar companies. About 70 per cent of all employees in Sweden work in the private sector.
The public sector consists of workplaces that are owned by the state, municipalities, county councils or regions. The activities are funded by tax revenues. The public sector includes, for example, health care, education, police, environmental protection and the emergency services.
The Swedish labour market is regulated by many laws and agreements. The laws and rules that apply between employers and employees are collectively called labour law. The Act on Employment Protection and the Co-Determination in the Workplace Act are the most significant laws.
The Act (1982:80) on Employment Protection, LAS
LAS protects employees and ensures that everyone is treated correctly. Among other things, LAS regulates conditions for termination, dismissal, order of priority and notice periods.
The Co-Determination in the Workplace Act (1976:580), MBL
MBL is about the employees' right to influence the workplace. This means that, if the employer has collective agreements, the trade unions have the right to information about the activities in the workplace.
The employer is also obliged to negotiate with the union according to MBL before a decision is taken to change activities or change conditions for individual employees.
The Leave Act (1977:480)
This act ensures that employees have a right to vacation leave. The act regulates the vacation year, vacation leave, vacation pay and vacation allowance.
The Swedish model
The Swedish labour market model means that the parties in the labour market – employers and employees, through their organisations – regulate a great deal of the labour market. The state has a passive role as legislator and does not actively participate in negotiations between the parties.
The labour legislation creates a fixed framework, while pay and working conditions, among other things, are handled through collective agreements that the parties in the labour market have agreed on.
A great deal of labour legislation is formulated in such a way that the parties in the labour market can deviate from these parts through collective agreements.