Trade unions open their doors to the self-employed

More and more Swedish trade unions have been opening their doors to people running their own businesses during the 1990s. This new, more welcoming attitude towards accepting self-employed people as union members may be seen as a response to changes in the labour market.

Should people who run their own businesses be allowed to become a trade union member? The Swedish Union for Technical and Clerical Employees (Svenska Industritjänstemannaförbundet, SIF) answered yes to this question when, in 1996 its congress decided, after a very lively debate, to allow union membership for the self-employed. Opponents saw the decision as a breach of the fundamental trade union principle of looking after workers' interests in relation to their employer. They also pointed out the risks of internal conflicts - situations where employees in a company might be competing with external self-employed people for the same job.

Those in SIF who were in favour of admitting the self-employed stated that doing so was just a natural response to developments in the labour market. An increasing amount of work in industry is performed by consultants, subcontractors and one-person companies. It is not unusual that a self-employed person performs almost the same work that he or she used to do when employed. Since union members are affected by company decisions to outsource work, it should be a union's task to defend the interests of the outsourced workforce under the new circumstances, they argued. Although sometimes competing, employees and the self-employed also have common interests. The economic conditions that companies apply to their consultants are very important to the employees, as well.

Since June 1998, when the new system started, approximately 500 self-employed people have joined SIF. The new members are mostly consultants with one-person companies in the service sector, working in the information technology area. As SIF members, they receive legal aid in disputes with customers, financial advice, insurance and unemployment insurance. Hans Eriksson, an SIF official, states that there is no major difference between representing an employee in a pay dispute or helping a self-employed person to obtain the remuneration agreed upon. "But SIF never helps a self-employed member in his or her own role as an employer," Mr Eriksson emphasises. He considers that being able to represent the self-employed gives SIF greater credibility.

In autumn 1998, the Swedish Union of Local Government Officers (Sveriges Kommunaltjänstemannaförbund, SKTF) also decided to revise its statutes in order to allow self-employed workers to become members. The requirement for entitlement to be an SKTF member is no longer to be employed within the union's field of organisation: it is now enough to work in that field.

Areas of higher acceptance

In areas of the labour market where freelancing and short-term contracts are well-established features, self-employed members are more accepted in trade unions. The Swedish Union of Theatrical Employees (Svenska Teaterförbundet, TF) organises self-employed workers as well as employees. The Swedish Union of Journalists (Svenska Journalistförbundet, SJF) recently started a service company for self-employed members, with the purpose of helping journalists in matters related to their business.

Education, rather than employment, is the membership criterion for trade unions belonging to the Swedish Confederation of Professional Associations (Sveriges akademikers Centralorganisation, SACO). According to a 1996 union survey, about 34,000 SACO members, or 10%, are self-employed, either full time or alongside regular employment. About 50% of the self-employed members have their own employees. The rate of self-employment is high among dentists, for example. Many SACO associations have already created various kinds of service companies or societies serving the self-employed in a similar way to that set up by SJF.

Within the Swedish Association of Graduates in Law, Business Administration and Economics, Computer and System Science, Personnel Management and Social Science (Jusek), the group of about 1,000 self-employed members is growing faster than other member groups. "The borderline between employer and employee gets more and more diffuse", according to Per Henriksson, chief negotiator at Jusek. The self-employed members in Jusek pay half the normal membership fee and are given information, insurance and other services, but not legal advice. Having employees of their own does not disqualify them as union members, but the union gives no support to them as employers.

More restrictive attitudes

The Swedish Trade Union Confederation (Landsorganisationen i Sverige, LO) takes a somewhat more restrictive attitude towards self-employed union members. Collective agreements as a means of looking after union members' interests are ineffective if the members are not considered as employees, the union argues. From a union point of view, the most important issue is to safeguard a wide definition of the concept of employment. In LO's opinion, many forms of temporary work, where temporary employment agencies "lease" staff to work in different fixed-term jobs, are very insecure for the workers involved. Helping members who have been forced into self-employment is a trade union task, while helping those who want to become self-employed is not, stated an LO report in 1998.

The LO-affiliated Painters' Union (Svenska Målareförbundet) has discussed membership for self-employed workers but decided against it, as have the Building Workers' Union (Svenska Byggnadsarbetareförbundet) and the Swedish Transport Workers' Union (Svenska Transportarbetareförbundet). For historical reasons, some other LO unions have different rules. As a result of company decisions in forestry in the late 1980s many workers were more or less forced to take over ownership of machinery and start one-person companies. These self-employed forestry workers were allowed to stay in the Forest Workers' Union (Skogsarbetareförbundet) in spite of their new status. The Musicians' Union (Svenska Musikerförbundet) admits self-employed members and represents them in professional matters. The conditions in this sector have made self-employment common.

There are several unemployment benefit funds open to self-employed people and small companies, while trade unions accepting self-employed members often offer a right to unemployment benefits as well. Indeed, an increasing number of union unemployment funds are changing their statutes in order to admit self-employed people, according to the National Labour Market Board (Arbetsmarknadsstyrelsen, AMS), the supervising authority.

Commentary

In the 1990s the number of new one-person companies has increased, on the whole. Governmental financial support has had an impact on this development, as has the fact of rising unemployment due to many redundancies in industry and other sectors. Some of the self-employed set up their own business because they wanted to, while others saw no other alternative. This development on the labour market has placed the issue of membership for the self-employed on trade union agendas.

The establishment of new companies may have reached its peak during 1997-8, according to recent statistics from the Statistics Sweden (Statistiska Centralbyrån, SCB), issued in June 1999. SCB estimates that 33,860 new enterprises started in in 1998, compared with 37,040 in 1997. A spokesperson for the Swedish National Board for Industrial and Technical Development (NUTEK), which commissioned the study and analysed the data, states that a best guess is that at least 70% of the new companies are very small companies (the study covers sole proprietorships, partnerships and limited companies). Since 1997, the situation on the labour market has improved, and fear of unemployment has decreased as a motive for self-employment. In 1998, the risk of unemployment had a much larger impact on the establishment of new enterprises in the northern counties, where 20% of those concerned had this motive, than in Stockholm, where the figure was only 10%. (Margareta Edling, Arbetslivsinstitutet)