Stockholm, March 26 - The Swedish retail workers union, Handels, was set to call a strike on Monday after the country's top employer organisation blocked a tentative wage deal.
The union said it would announce its plans for a strike, which could hit the traditional pre-Easter shopping rush, at 1400 GMT unless the Confederation of Swedish Enterprise, which scuppered a tentative agreement between Handels and employers, backed down.
Union spokesman Bill Erlandsson said a strike would begin at midnight on April 5, the Thursday before Easter.
"This absurd situation arose despite us being in agreement with our counterpart," Handels Chairman Lars-Anders Haggstrom said in a statement. "Now we are forced to ditch the negotiations and call industrial action."
The shopping period ahead of the Easter is the most important next to Christmas for retailers.
The union said it had agreed what it called "a very good deal" with the Swedish Trade Federation over the weekend.
But the Confederation of Swedish Enterprise, the umbrella organisation for Sweden's employers, made the Trade Federation back out of the deal, the union and the Trade Federation said.
The Trade Federation said its board would be meeting later on Monday to discuss the situation.
"Then we will have to see what happens. We don't know," Trade Federation spokeswoman Margareta Ternell said.
The Confederation of Swedish Enterprise, which can keep individual employer organisations in line through a variety of measures including fines, would not comment.
The deal blocked by the Confederation covered around 120,000 retail sector employees and was for a wage hike of 4.2 percent per year over three years. Employers had made an initial offer of 6.6 percent for the whole period.
The agreement also covered around 30,000 warehouse workers.
Earlier this month, Sweden's industrial workers struck a deal, traditionally seen as setting the benchmark for talks in other sectors, giving them pay increases of 10.2 percent over three years, a level which some economists said could put upward pressure on inflation.
Sweden's central bank is due to deliver its next interest rate announcement on Friday after having hiked rates six times in 2006 and once so far this year.
The bank, which has said it expects inflation to remain benign over the next two years and rate hikes moderate, is widely expected to keep rates on hold at 3.25 percent.
Wage deals covering 80 percent of Sweden's labour force, around 3 million workers, are due to be negotiated this year.