The debate over whether a company should have a collective bargaining agreement is in full swing in the media. Both Tesla and Klarna are—and have been—in the spotlight and have so far chosen two different paths. But what is actually the right path to take? And who decides what the best solution is for each individual company?

The Swedish model is based on the idea of voluntary agreements, under which companies have the opportunity to shape their commitment in various ways. It is the actual actions—what you do—that matter, rather than whether a company has chosen to enter into a collective agreement or not.

It is essential to emphasize the voluntary nature of any collective bargaining agreement. Without this voluntary nature, it would be akin to forcing a company to follow a specific business strategy rather than merely recommending or offering incentives for it. It would be like claiming that it is now mandatory for a company to adopt this particular strategy.

A key question should be whether entrepreneurs should be able to operate freely and with the flexibility that best suits their own businesses. This in no way implies a deterioration in working conditions for managers and employees.

To illustrate why it is detrimental to impose a collective bargaining agreement on a company, let’s consider this example:

Imagine two companies in the same industry. Company A thrives by offering customized employment terms that attract specialized staff, thereby improving the quality of its products or services. Company B, on the other hand, chooses to enter into a collective bargaining agreement to create uniform working conditions and foster a sense of community among its employees. What creates the best work environment and the most profitable company is not predetermined. Both options can be the best choice.

Benefits and choice

ByHart works with a wide range of clients across nearly as many industries, and every day we see excellent examples of effective and healthy workplaces. But to claim that collective bargaining agreements are always the foundation for this is, of course, incorrect.

However, as an HR partner, we almost always recommend that our clients enter into collective bargaining agreements. To highlight just a few of the overall benefits of such agreements, we can mention:

1. Workplace Health and Safety: Collective bargaining agreements often include provisions that promote a safe and healthy work environment. This can help reduce work-related injuries and sick leave.
2. Gender Equality and Diversity: Collective bargaining agreements may include provisions that promote gender equality and diversity in the workplace. This can help create an inclusive work environment.
3. Working conditions and benefits: Through collective bargaining agreements, companies and employees can agree on common working conditions and benefits. This can foster stability and job satisfaction in the workplace.
4. Dispute Resolution: Collective bargaining agreements often include mechanisms for resolving workplace disputes. This can help prevent protracted conflicts and maintain a positive work environment.

However, if we impose the same collective bargaining agreement on both companies, they lose the ability to tailor their strategies to their unique needs. Company A may lose its competitive advantage by being forced to adapt to standardized terms that do not fit its business model. On the other hand, Company B may lose its competitive edge by no longer being able to offer the customized terms that attract specialized staff.

In our view, it is simply unwise to impose a collective bargaining agreement on a company without taking into account its unique circumstances and strategic needs. Diversity in business models should be encouraged, and companies should have the right to choose their own path based on their specific circumstances.

A healthy business is built on a foundation made up of so many other elements.