Observation (CEACR) - adopted 1993, published 80th ILC session (1993)

The Committee takes note of the comments presented by the Swedish Confederation of Professional Employees (TCO) concerning the 1990 amendments to the National Insurance Act and of the 1991 Sick Pay Act, and notes as well the information supplied by the Government in its reports.

TCO indicates that unions have long had the right to make agreements providing for up to 100 per cent of sick pay coverage and that the present legislation limits such agreements in violation of Conventions Nos. 98 and 154. The Government responds that it must cut costs and maintain equality in the social security system and that neither Act violates any of the ILO Conventions.

The Committee notes that the Government implemented new rules under the National Insurance Act from 1 March 1991 and, in the case of the Sick Pay Act from 1 January 1992. Sick pay benefits ranged from 65 to 90 per cent of an insured's qualifying income in the first enactment (now superseded) and range from 75 to 90 per cent in the second one, depending on the length of illness. Exceptions exist for chronic illnesses. Under the first plan of the National Insurance Act, the Government also created a mandatory ceiling on sick pay; if an employer or an employee's insurance provided a supplement over a specified level to the State's plan, the insuree was required to reimburse the Government. Under the second plan, the Sick Pay Act, the Government has called for voluntary restraints through collective bargaining with a view to preserving the ceiling on sick pay. However, the Government has threatened legislative action should unions and employers fail to observe the ceiling. A central difference between the two plans is that the Sick Pay Act calls for a ceiling on sick pay even where private employers, not the Government, must now pay for the first 14 days of coverage.

TCO asserts that the National Insurance Act violated the Conventions by, in effect, bypassing the contractual agreements already made with employers to pay supplements that provide up to 100 per cent of sick pay from the first day. TCO's subsequent communication of 12 October 1992 asserts that the legislative changes restrict the unions' rights to determine their own issues for negotiations and agreements.

In its reports, the Government rejects TCO's argument that the unions have traditionally had the right to bargain up to 100 per cent of sick pay. The Government indicates that such bargaining has always depended on the Government paying a substantial share of the costs. It points out that a recent court case determined that current contracts could not be assumed to provide 100 per cent coverage in the case of a reduction in the Government share of sick pay. It further provides testimony by officials about the need to cut costs and preserve equality by maintaining a sick pay ceiling. The Government indicates that its threats to mandate a new sick pay ceiling are "a perfectly legitimate political stratagem".

The Committee is not qualified to comment on whether contracts under the National Insurance Act provided a right to 100 per cent sick pay. As to contracts under the Sick Pay Act, while acknowledging the Government's action to preserve equality and to provide for individual safeguards in the operation of the pay system, the Committee notes the Government's threats to legislate a sick pay ceiling. The Committee recalls the importance attached to collective bargaining under Conventions Nos. 98 and 154. In the Committee's view, while not a violation of the Conventions, these threats amount to something more than mere persuasion. Accordingly, steps should be taken to persuade the parties to collective bargaining to have regard voluntarily in their negotiations to major economic and social policy considerations and the general interest invoked by the Government. (See General Survey on Freedom of Association and Collective Bargaining 1983, paragraph 318.)

The Committee asks the Government to keep it informed in the next report of any new collective bargaining agreements, legislation and court cases having a bearing on this matter.