Compare and contrast the labor relations systems in Germany and Sweden

Last Updated: 06 Jul 2020
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Labor relation systems in Germany and Sweden differ in a number of ways. In Germany, all matters that directly affect workers for example the maximum number of work hours per day, the pay system, and breaks are under German law for all organizations who have more than five employees in their premises. Implementation of various labor rules is carried out by a highly operational management headed by the labor director, whose powers are equal to that of the managers of organizations. The decision of the labor director is very relevant to the matters that affect employees. In Germany, the collective bargaining system is to a great extent centralized by industry. Collective bargaining in Germany is a national wide system and constitutes of factors such as work rules and wages in addition to work hours. Representation of employees in Germany occurs at three levels and is regulated by German law. In addition to representation of German workers to the unions, a parallel form of representation is offered to employees through Co-determination. Co-determination is a beneficial feature of German labor relations because it allows for participation of German workers at a variety of levels including the shop floor level, the works council level, and also at the highest level of management, where workers elect their representatives to Workers Union Board of Supervisors. Workers from both blue and white collar ranks are represented equally in the unions. The responsibility of the supervisory board is to appoint top managers in addition to regulation of the performance of managers. German companies have work councils that act as a medium of connection at the shop floor level for workers to take part in making of decisions. Disputes that may arise between the management and council over a variety of labor issues are solved in German labor court. Unions base their bargains on industrial factors (Anon, n.d).

            Contrary to Germany, bargaining in Sweden is centralized. However, the centralized bargaining seems to be experiencing a variety of hurdles bringing about negative outcomes. Centralized bargaining, in Sweden, focuses on a variety of macroeconomic issues such as narrowing wage differentials, a factor that differs from the German labor relations. As a result, the frequency of fragmented bargaining is on the rise in Sweden. Trade unions in Sweden have long shown great concern for macroeconomic matters in addition to the welfare of their members. The Swedish government strongly supports social and economic policy, an aspect that has been borrowed by the rest of the world. Global competitiveness has however resulted in deterioration of the coordination of government, unions, and companies. This has subsequently led to a change in the industrial structure of the Swedish economy. Union solidarity has also been replaced by intense union rivalry (Anon, n.d).

The labor relations system, in Germany, grants labor greater economic decision-making power, both at the national and shop floor level, contrary to Sweden. Whereas in Sweden labor unions have been fighting for flexibility of wages, as employers demand for elimination of rigidities imposed by the unions, German labor unions have been fighting for employment flexibility as well as reduction of daily and weekly working hours both at national and plant level. At the beginning of the 1980s, the German labor was compelled to agree to the terms of a conservative government proposing deregulation of the labor market. German workers decided not to fight over centralized bargaining, an aspect that resulted in increased stability of the bargaining system (Anon, n.d).

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Anon, (n.d.). Comparative Labor Relations, retrieved on July 28, 2010 from

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