STOCKHOLM (AP) -- The Swedish industrial workers' union IF Metall said Monday it will agree to pay cuts for its members to avoid further layoffs as a result of the international economic crisis.
The union said it has signed an unusual contract with employer organizations under which businesses can put redundant employees into training on 80 percent of their previous salary, including overtime compensation. Alternatively, they can take employees out of work for a period of time with the same compensation.
"This is an extreme situation and a temporary deal. Several of our members will not have to go on the dole," IF Metall spokesman Veli-Pekka Saikkala said in a statement. "You get time off, but get to keep your job and your compensation is better than the dole."
Unemployment compensation in Sweden is 80 percent of the average salary for the first 200 days of unemployment, but has an upper limit of around 15,000 kronor ($1,660) a month.
In January, the country's unemployment rate jumped almost a full percentage point to 7.3 percent as companies cut jobs amid the economic crisis. The industrial sector, including struggling automakers Saab and Volvo, have been the hardest hit.
Anders Narvinger, chief executive of the Association of Swedish Engineering Industries, said the deal was a way to reduce the need for layoffs while also cutting costs for businesses.
Under the new deal, "businesses are also given the possibility to act offensively when the market conditions are improving," he said.