On 22 January 2003, the Labour Court (Arbetsdomstolen) delivered its judgment (/Dom nr 6/03/) in a case brought by a retired government official against her former employer, the state. The case concerned the interpretation of a clause in the government sector collective agreement on supplementary pensions (Statliga pensionsavtalet, PA-SPR), originally signed in 1974. The issue at stake was whether the calculation of the complainant's pension, based on the agreement's provisions, should have been linked to the consumer prices index for the whole period since the agreement was first concluded. The state employers' representative, the Agency for Government Employers (Arbetsgivarverket), claimed that consideration should be given to a change in this area that was decided in 1991 by parliament (Riksdag) and subsequently incorporated in the government supplementary pensions agreement.
In January 2003, the Swedish Labour Court issued its judgment in a case brought by a retired government official against her previous employer, the state. The dispute concerned the interpretation of a clause in a collective agreement on supplementary pensions for government employees, with the pensioner seeking compensation for changes in the index-linking rules for pensions. The complainant, and consequently about 100,000 other older pensioners, lost the case.
On 22 January 2003, the Labour Court (Arbetsdomstolen) delivered its judgment (Dom nr 6/03) in a case brought by a retired government official against her former employer, the state. The case concerned the interpretation of a clause in the government sector collective agreement on supplementary pensions (Statliga pensionsavtalet, PA-SPR), originally signed in 1974. The issue at stake was whether the calculation of the complainant's pension, based on the agreement's provisions, should have been linked to the consumer prices index for the whole period since the agreement was first concluded. The state employers' representative, the Agency for Government Employers (Arbetsgivarverket), claimed that consideration should be given to a change in this area that was decided in 1991 by parliament (Riksdag) and subsequently incorporated in the government supplementary pensions agreement.
The pensioner, who retired in 1986, claimed that she should be compensated for this change as it had lead to inferior pension conditions for her. The 1991 change ordered by parliament stipulated new rules for calculating the amount of government pensions. The calculation of pension amounts based on the so-called 'base amount' (basbelopp), have since then no longer be linked to the consumers prices index, as was stated in the 1974 agreement. The Agency for Government Employers stated in court that the current pension agreement means that government pensions should develop in the same way as the base amount develops, even if the base for accounting this amount has changed.
The Labour Court judgment is based on a judgment of the Stockholm City Court one year earlier, when the same case was tried in the first instance. The judges concentrated on the intention of the social partners at the time they concluded the collective agreement. The Labour Court did not find that the government pensioner had produced any proof that the social partners initially had an intention in their negotiations that pensions based on the agreement should follow the consumer prices index, in the event of a future change in the accounting method for the base amount. The Labour Court then concluded that it was acceptable to base the calculation of pensions on the basic amount, even if this amount no longer followed the consumer prices index.
For the government, the judgment means large savings. About 100,000 older pensioners had hoped that the case would result in a rise in their pension as well as compensation for inferior pension amounts received since 1991.
Two similar cases were tried in 1995 and 1997. The Labour Court ruled in December 1995 in a case brought by a government pensioner, with a positive result for the latter. As a result, about 150,000 pensioners received SEK 800 million in retrospective pension payments. The background to this case was that in 1992 the liberal-conservative government of the time and the social democrat parliamentary opposition concluded a 'crisis settlement because of the problems in the Swedish economy', which included a decision that all government supplementary pensions should be decreased by 2%. In order to implement the decrease, new collective agreements were concluded in the governmental sector between the Agency for Government Employers and the trade unions for blue-collar workers, white-collar workers and professional employees. The Labour Court, however, ruled that the agreements were not valid. The individual pensioners had not been asked by their trade unions to give their authorisation for the change.
The second case (SE9801163N) also involved decreased pensions agreed in periods of financial crisis, this time in the municipal sector, with arguments quite similar to the 1995 case. A pensioner who challenged the central collective agreement on pensions for municipal workers won his case in the Stockholm District Court in 1997 and then in the Labour Court in December 1998. The courts ruled that the pensioner's trade union did not have the authority to agree on inferior pension terms for its members. It was estimated at the time that the employer, the City of Stockholm (Stockholms Stad), would have to pay SEK 1.3 billion to about 190,000 pensioners who had retired before the 'crisis settlements' were concluded.
Eurofound recommends citing this publication in the following way.
Eurofound (2003), Government pensioner loses case in Labour Court, article.
