The Handels retail sector union presented the new agreement on Wednesday afternoon after a period of tense negotiations. All threats of strike action have now been withdrawn.

The agreement, which applies to 100,000 of Handels’ members, will run over 24 months affording a 4.7 percent pay increase for store personnel and 3.7 percent for warehouse staff – the highest rises negotiated in this year’s round of pay talks.

“The decisive factor in this agreement was that this deal involves considerably more money,” said Handels’ chairperson Lars-Anders Häggström, adding that the agreement over temporary staff was also pleasing.

“We have managed to find a satisfactory solution there, in many respects similar to prior agreements, but this is a simplified resolution. We are in agreement that staffing agencies can serve as a complement,” he said.

Employer group Svensk Handel also expressed satisfaction over the deal.

“Handels has won this agreement, but so have we. We have for the first time taken a step towards a modern agreement. It is an important step to develop more localized pay structures and we have also laid the basis for an improved pay structure,” said Dag Klakenberg, Svensk Handel CEO.

Klakenberg argued that employers had secured an indisputable right to decide over the staffing issue.

“The right is absolute but possibly comes with a cost,” he said.

The Handels agreement has however been met with some concern among other employer groups engaged in pay discussions.

Negotiations between the Hotel and Restaurant Workers’ Union (HRF) and the Swedish Hotel and Restaurant Association (SHR) have just begun and their negotiations are usually affected by the contracts signed by retail trade partners.

Mats Hulth, SHR CEO, has ruled out the possibility of this year’s agreement coming in at the same level as the retail sector. Hulth argued that the industry suffers the lowest levels of profitability and has significantly higher labour costs than retail.

“It is a completely different situation. An agreement with that form and focus would be a disaster for us,” Hulth said to news agency TT.

HRF’s chairperson, Ella Niia, however says that in her estimation the retail union agreement seems to be reasonable.

“It is the first agreement within services. For us it is an agreement that we can take on board as we continue to move forward,” she said.