Social Dumping in Sweden – Who Is Next?

We often think that Europe is protected against social dumping and that the Nordic countries are the best example of balanced social protection. Well, think again. Late last year, the employees of a branch of a well known airline group were fired and rehired through a contractor to do exactly the same work after their business unit was sold – for a symbolic price – to one of the groups' top executives. Did this happen in a far-away 'banana republic'? No, it happened next door – in Sweden.

Last November Swedish newspapers reported: "SAS and the Salén family sold their jointly owned venture Skyways Express AB to its chief executive Lars-Åke Bertilsson for 1 SEK. Skyways Express will be renamed Avia Express and continue to operate as flight supplier to SAS and Salenia." Skyways had published moderate profits, despite of the crisis, before its transfer.

A few days later, the Swedish Pilots Association (SPF) learned that all Skyways Express pilots had been fired and that the company "offered" some of them to be hired back though through a crew leasing company. With the new status of "contract pilot" the ex-Skyways pilots will lose their collective work contract and they will have to pay their own social security, medical insurance, tax, etc. Their contracts are short-term (6 months) and the working relationship can be terminated unilaterally by the company with one month's notice...

This type of contracts opens multiple questions. The most obvious is the loss of terms and conditions, job security and social protection. And there are other implications: how is training done, how are careers planned, how is a company safety culture developed and maintained? And crucially: how can the pilot exercise safety authority if a safety decision understood by the company as 'non-cost-effective' could entail the non-renewal of the 6-months work contract? Safety is at stake, too.

The European Union has an instrument designed to protect the employees against this kind of situation, the Directive 2001/23/EC on the protection of employees in the event of a Transfer of Undertakings. It states that "The transfer of the undertaking, business or part of the undertaking or business shall not in itself constitute grounds for dismissal by the transferor or the transferee." And that "following the transfer, the transferee shall continue to observe the terms and conditions agreed in any collective agreement on the same terms applicable to the transferor under that agreement."

The words are clear. But their application is often complex and could probably only be enforced after long litigation. If we do not enforce the employees' rights, any Court decision will come too late to repair the damage. And Sweden's worst practices could become fashionable elsewhere. 'If they can get away with that in Sweden, why shouldn't I try as well?'

European governments must consider the development of a social Europe as a priority. The lack of a truly EU-coordinated social approach is favouring social dumping. The freedom of establishment and the freedom to provide services allow companies to shop for the "best deals" in terms of tax and employment costs reducing the working conditions and representation rights of their employees. We must find solutions, we must act to protect our profession and our livelihoods, and work with our governments to make things change.