Swedish trade unions Unionen and Engineers of Sweden walked out of talks with Klarna last week, warning that they would strike unless the payment company signs a collective bargaining agreement.

Neither union has wanted to comment in detail on how many members they have working for Klarna, out of fear that the company could put pressure on staff not to join the industrial action.

Another three unions, Akademikerförbundet SSR, DIK (a union for people working in the creative sector), and natural scientists’ union Naturvetarna, have announced they will launch solidarity action unless the parties manage to come to an agreement before the strike goes ahead. Sympathy strikes are legal in Sweden.

The Akavia union, whose members include for example lawyers and economists, is on the other hand not joining the strike, arguing that its members would rather continue discussions with the company. Around a hundred people working for Klarna are members of Akavia.

What’s the background?

Collective agreements have long been a staple of the so-called “Swedish model”, which prefers employers and unions to negotiate working conditions between themselves rather than having detailed legislation. As the two parties generally manage to reach agreements, strikes are comparatively rare in Sweden. Strikes are not permitted when there’s a collective agreement in force, known as “peace obligation”.

But although nine out of ten employees in Sweden are covered by a collective bargaining agreement, they are less common in newer industries such as the startup and tech bubble.

Those in favour of collective agreements argue that they are an essential part of the Swedish model, ensuring good and equal contracts for everyone. Those against argue that up-and-coming businesses in the modern labour market need more flexibility than these deals offer.

The latest Swedish tech boom means that some of the country’s biggest companies are today companies that are not covered by collective bargaining agreements, such as Klarna and Spotify. Both entered negotiations with trade unions earlier this year to possibly set up agreements, but negotiations have in both cases broken down (Spotify walked away just after the summer).

What’s Klarna saying?

Klarna’s CEO, Sebastian Siemiatokowski, said he regretted that the unions had pulled out of negotiations, but added that he was unconvinced that a collective agreement would provide better working conditions to employees than what the company currently offers.

“We also addressed concerns our employees have about the lack of evidence that a sufficient number of employees want this change. Unfortunately, the unions were unwilling to share any such information with us,” Swedish newswire TT quoted him as telling staff at the time.

In a post on X, formerly Twitter, which since appears to have been deleted, Siemiatokowski wrote that Klarna employees were “shocked” and “stressed” after the unions announced the industrial action.

“They believed that they were allowed to decide for themselves if they wanted to strike or not. The unions say they will be locked out and lose their pay unless they strike,” he wrote in the post.

Klarna has reportedly been handing out flyers in recent days similar to those handed out by Spotify to employees earlier this year, in which they list some of the ways they believe their conditions and perks match or exceed those offered by collective bargaining agreements.

What are the unions saying?

Unionen has said that many of the perks listed in the flyers handed out by Klarna are things that aren’t prevented by a collective agreement, such as fruit baskets, remote working, healthcare and free vaccinations. “These are benefits that many companies offer their employees and which are not at all regulated in collective agreements,” a spokesperson told union magazine Kollega.

“Many tech companies (…) have signed collective agreements, and of course it’s not like they have withdrawn the possibility for their employees to eat fruit at work,” the spokesperson added.

Unionen, when it pulled out of negotiations, accused Klarna of trying to stall the process, although its head of negotiations said there had been some fruitful conversations about for example pensions.

“We seek influence, secure conditions and the possibility of outplacement service. We’ve waited long enough. Unionen members at Klarna want to establish a collective agreement,” said Sen Kanner, chairman of Unionen’s Klarna club, in a statement.

You can listen to Sen Kanner, herself an immigrant in Sweden, talk to The Local about the process of unionising at Klarna earlier this year in our Sweden in Focus podcast below.

• INTERVIEW: Is Klarna ready for the Swedish model?

What happens now?

The Swedish National Mediation Office has appointed a mediator to resolve the conflict.

Members of Unionen and Engineers of Sweden will stop working on November 7th unless the conflict is resolved by then. The unions have blocked their work duties, which means Klarna is not allowed to hire new employees to perform these duties in the place of striking workers.

Even though Akavia members will not participate in the strike, their members have the right not to pick up the work that would otherwise have been carried out by their striking colleagues.

Members of a striking union are obligated to join the strike according to the rules of the unions, although strike-breaking is not illegal. Not participating in industrial action is however considered a breach of the union’s membership agreement and is grounds for exclusion.

The same rules apply to office workers and people working remotely.

Striking workers will get no salary from their company while the strike is ongoing, but will instead receive pay from their union to compensate for loss of income.

Employees who are not members of a striking union are also allowed to join the strike without risking punishment from their employer, but they are not entitled to a salary or compensation.

The employer is not allowed to penalise employees who take part in a legal strike.

What else is going on?

In other news from the Swedish tech industry, members of Sweden’s IF Metall metalworkers’ union at Tesla service centres went on strike on Friday morning, following a breakdown in negotiations over a collective bargaining agreement.

It’s not clear how many mechanics are striking, with staff reportedly split between those who are union members and those who are not, and those who are in favour of striking and those against.

There are no plans for new negotiations between the two parties.

Spotify in September walked out of collective bargaining talks with unions, but there have been no announcements or indications that unions are considering an imminent strike at the streaming giant.

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