Sweden is a highly regulated labour market applying in its own way the Nordic labour model. Employment contracts are governed by extensive mandatory legislation and by many collective agreements. The framework of regulation can be divided into (1) collective bargaining (2) individual employment (3) dispute resolution (4) the working environment and (5) the labour market. Most workplaces have a collective agreement covering wages, working conditions, benefits and insurance. Approximately ninety per cent of workers are covered by these agreements. The model relies upon strong unions and generally supportive employers. Seventy per cent of workers belong to unions.

The regime has for many years been weighted in favour of employee protection. The main principle is that contract terms less beneficial than specified by law are invalid. Recently, there have been moves to shift the balance slightly towards the employer particularly in the sphere of terminations. Nevertheless the global employer must expect a complex regulatory world. In return, there is a productive and generally harmonious working environment.