Swedish ‘Fin-Tech’ Company Agrees Union Recognition As Dispute With Tesla Escalates

Swedish ‘fintech’ company Klarna, which employs 5000 workers, has averted an all out strike by its workforce and agreed to union recognition and a collective bargaining agreement with Swedish unions.

The internet finance platform which provides financial services for online stores and post-purchase payments is popular with  millennials and Generation Z who are switching to ‘buy now, pay later’ as their preferred method of payment due to high interest rates.

The Klarna Collective Bargaining Agreement (CBA) could prove a watershed for Swedish unions organising in tech firms and is seen as a major breakthough in the sector.

Unions hope that it will lead to similar deals in tech companies notably at the music streaming and podcast platform Spotify.

Swedish unions were in discussions with Spotify and were hopeful of securing a deal until  the company pulled out of the talks in August saying that a Collective Bargaining Agreement did not fit in with their business model.

In Sweden nine out of ten employees are covered by a collective bargaining agreements but they are less common in in startup and tech companies. Globally tech companies have a history of avoiding unonisation and collective bargaining.

The Klarna CBA now recognises three unions, Finansförbundet (which is part of Unionen), Engineers of Sweden, and Akavia.

Unions who accused Klarna of repeatedly cancelling and postponing meetings, called for strike action due to take place on November 7th.

Sen Kanner, president of Unionen, said: “I hope that this will show tech companies that they have a place in the Swedish model and there are only benefits to unionising and working alongside your employees. I really hope this will be the start of a new trend for tech companies in Sweden and globally.”

Klarna CEO Sebastian Siemiatkowski said: “I am pleased that we have reached an agreement that combines Klarna’s agility with the clarity of the Swedish model. Our focus in the negotiations has been to secure operational freedom, to continue to make quick decisions and to continue to cultivate our unique and successful culture.”

Unions Fight To Defend ‘The Swedish Model’ At Tesla.

The Swedish IF Mettal union is also currently in dispute with US e-vehicle maker Tesla over union recognition and collective bargaining. Tesla refuse to agree to union recogntion and collective bargaing for  130 mechanics who maintain and repair vehicles. They are are now on strike and are being supported by other unions including dock workers who are refusing to unload Tesla vehicles being imported into the country; the painters union who are refusing to service Tesla’s and the Service and Communications Employees, who said it will halt shipments to Tesla on November 20th.

Serice union president Gabriella Lavecchia, said Tesla is “refusing to comply with the rules of the game here in Sweden. The fight that IF Metall is now taking on is important for the entire Swedish collective agreement model.”

Sweden is highly unionised, has highly regulated employment laws and sector wide collective bargaining which has the support of the public and which stops the ‘race to the bottom’.

Decent wages and working conditions apply across the economy and there is a settled concensus between employers, government and unions on the value of the Swedish model while tech company’s and businesses like Tesla see the Swedish model as damaging ‘flexibility’ as well unfettered profits and the wealth of CEOs and executives.