Hillar from Estonia was recruited to work as a painter for Kattegatts Måleri & Bygg, a Swedish paint- and construction company based in Gothenburg. But he was soon sent back home. As it happens, Hillar had refused to sign a contract stipulating a great number of penalty fines that he could be forced to pay – to the employer!

After having worked for Kattegatts Måleri & Bygg for ten days, Hillar* asked for an employment contract. But instead he was handed another document – a  “penalty contract” which he must sign before any discussing or even mentioning of an employment contract would be possible. For example, if Hillar made mistakes on the job, he should fix it for free, and also pay 1,000 Swedish kronor (SEK) in fines. “Laziness” on the job would cost him 2,000 SEK, etc. Bad attitude towards the boss would give a fine on 4, 000 SEK. And these are just a few examples (out of two full pages) of the workers’ penalty rules.  To see the full list, click here!

Labor Exploitation
On May 30 last year, Living for Tomorrow, an Estonian organization working against human trafficking, received a call from Hillar.
“He had refused to sign the penalty contract, because it violated both Swedish labor laws and basic human rights”, says Sirle Blumberg, CEO of Living for Tomorrow.
Hillar was simply sent home. But only with 1,300 of the 12,000 Swedish crowns he had been promised for ten days’ work. Nor did he receive any compensation for using his own car for work.

No leave
Not only did he not receive his salary. On several points, the employer violated laws and agreements.
“He was a victim of labor exploitation”, Sirle continues. This case is about illegal employment, withholding of wages and salaries, the imposing of fines, and working without leave, as well as failure to follow safety regulations within the workplace, and psychological abuse by the employer.

The Swedish Work Environment Authority
Living for Tomorrow advised Hillar to report Kattegatts Måleri & Bygg to the Swedish Work Environment Authority. In their answer they referred to the Painters’ Union, since they considered the matter to be primarily of a financial nature. Click here to see the full response from the authority.
“We do not agree with the Work Environment Authority´s assessment. This is not only a money matter”, says Sirle Blumberg.
Living for Tomorrow has been in contact with the Swedish Painters’ Union, section 3 in Gothenburg. The union has tried to get in touch with the owner of Kattegatts Måleri & Bygg in the intention of signing work agreements.
“We have called. We have emailed, and we have sent registered letters, which has been returned. The next step is service of process. And if they do not sign a collective labor agreement, they will be blockaded”, says Paul Weis from the Painters’ Union.

 No collective labor agreement
Kattegatts Måleri & Bygg is the black sheep of the Swedish paint industry, and can be compared with the now notorious Swedish forestry company Skogsnicke – with one significant difference.
“Skogsnicke had a collective labor agreement. Kattegatts Måleri has not. Furthermore, we have no members working with the company.”
Even if the Painters’ Union manages to set up a collective labor agreement with Kattegatts Måleri & Bygg, there is probably very little hope of getting Hillar his salary.

Trafficking
Living for Tomorrow has been up and running for fifteen years now, but it has been an uphill struggle.
“Estonia is a country with 1.5 million inhabitants, and like many other European countries Estonia was affected by the financial crisis. Many people found themselves in vulnerable situations after losing their job. Our concern is to provide correct assistance in cases where existing legislation and regulations have been abused by “clever” employers. Most of our clients who work abroad are not members of any trade union and cannot benefit from their services. Employers also often try to avoid paying the proper tax, which sometimes lead to workers facing tax evasion charges or losing their social security benefits. We are convinced that all parties would benefit if existing legislation was successfully implemented by all employers. It is not the responsibility of the worker to make sure that the employer pays tax! It is also desirable that organizations and authorities know WHERE to turn in cases like this in order to avoid sending applications to numerous different institutions. ”

“The Workers Must Know Of the Consequences”

The owner of Kattegatts Måleri & Bygg, Frederick Andvién, explains why his employees must sign a penalty contract.

“The purpose of the penalty contract is not that we should punish everything, but to regulate the workplace. The workers should know what the consequences are if they do something wrong. We have had bad experiences with some of the workers drinking alcohol at work and even cases of drunken-driving”, says Fredrik Andvién.

But it is illegal to impose fines on people!
“We never use it in that way. You could say that it is a matter of “adapted” work ethics. It was applied to a few of my workers in a chaotic situation. They were sitting at home, playing cards and games, and did not show up for work. They turned their mobiles off, so that they could not be reached, and sat drinking during work hours.”

I looked at your website. It says that you have professional staff. Do you have professional staff or are they all drunks?
“Professional, of course! But sometimes … you cannot always get the same staff. During 2012 we expanded quite a lot and we had to hire new personnel. With some employees we have had problems, but this is not something I’m trying to hide in any way.”

You have a rule saying that if an employee has a bad attitude towards management, he will be fined 4,000 SEK.
“Well, you know… Actually, we do not use those rules.”

But why then post them, and why do you ask the workers to sign the contract?
“The idea is that there should be some rules and that the workers should not drink alcohol or cheat with the working hours.”

Do you think that the contract meets basic human rights?
“Absolutely!  It is not right, the way single laborers behave towards their employers.”

So based on isolated cases, you have written a full two-page list of fines?
“Not all workers need to sign the contract. Most of the people who come to me are former employees who have been here since 2011. They are not required to sign the contract every time. These employees are reliable. I know what they are doing, and I trust them.”

How do you think the Swedes will react to this list of penalty fines? Kattegatts Måleri is the black sheep of the paint industry. This method is pure 1930ies! I have never seen such a thing before, and I have examined companies for four years!
“Yes, I would also prefer not to have this list. But, this is a list for the newcomers who tend to get into trouble.”

Frederick Andvién says that the company mostly employs workers from Estonia. In 2012, the company had 12 employees working with the company for 10 months. The workers’ salaries varies, but according to Andvién the normal salary amount is 100 SEK per hour and includes free accommodation, free driving, and more. Kattegatts Måleri & Bygg has the right to make ROT-deductions, i.e. work-related deductions for home-renovations, and their customers are mostly homeowners. The company has no collective agreement, but plans to sign one in 2013, when the company has grown bigger.

Today you pay 100 SEK per hour – is that in line with collective agreement standards?
“No, but they get free accommodation and lunch money. But of course, we also offer low prices in order to get into the job market.  Over time and as more of our customers learn about the quality of the work we do, we will also be able to raise wages.”

We also have the case where a person worked 10 days for you. I think you know it? The case has been a matter for the Swedish Work Environment Authority.
“I know which case you are referring to. A couple of employees made some complaints about him. He was tampering with the work hours as well as drinking alcohol on the job, and while driving. When they caught him drunk at work, he was fired.”

According to Living for Tomorrow Hillar got 1,300 SEK for 10 days of work. Fredrik Andvién says that this is not true.
“I can produce accurate data on whether he was working or not, for how many hours, and with whom he worked. I can also leave the phone number to the people who worked with him, and who filed the complaint. I can produce all the paperwork.”

Anna-Lena Norberg
Translation: C-line Productions

* Hillar is an invented name. 

The above article was sent to Fredrik Andvién who after reading wanted to make the following comments:
“We do not and have never had such a thing as a “penalty contract” for our employees. What we have is a regulation. We have now removed the penalty clause completely, and not a single person has been fined during all these years. And as I said, the reason for the regulation is not to penalize people, but to instill a system with Swedish work ethics with the workers. For example, that driving and drinking alcohol is totally unacceptable in Sweden.  I want to emphasize that all of our employees are, and always have been, professionals. The problems we have had with some persons have been related to alcohol abuse and drinking on the job and while driving, which is inadmissible in Sweden and with Swedish companies. Due to poor coverage during our phone conversations, I misinterpreted or misunderstood your question “Do you think that the penalty contract corresponds with basic human rights” with “Do you think the termination notice corresponds with humanism?”    And I think it does, for the same reasons that led to the person being sent home.  But again, we never fine anyone. I hope that the article will be passably corrected according to this email.”