SAK gives priority to strengthening general validity of agreements

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In June 1999, Finland's SAK trade union confederation outlined the trade union movement's shared objective of strengthening the principle of the general validity of collective agreements - their applicability to all employers and employees in a sector, and not just members of the signatory organisations - in the next incomes policy round. This can be interpreted especially as a signal to the Federation of Finnish Enterprises, which wishes to become a negotiating party in the incomes policy talks, despite its previous aim of abolishing general validity. SAK's demand is creating some tension between left- and right-wing parties within the "rainbow" coalition government.

In June 1999, the chair of the Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK), Lauri Ihalainen, outlined a set of objectives for the upcoming incomes policy bargaining round (FI9905104F), which will occur prior to the expiry of the current national agreement in early 2000. In a speech delivered at the centenary celebration meeting of the Metalworkers' Union (Metallityöväen Liitto), Mr Ihalainen stated that the unions' most central qualitative goal for the incomes policy round was to ensure at least the minimum level of working conditions for all workers (FI9905105N). According to Mr Ihalainen, this will require further development of the principle of general validity of collective agreements, whereby agreements apply to all employers and employees in a sector, and not just members of the signatory organisations. "In the event that no satisfactory solution can be achieved in this matter, the basis for the centralised agreement will break down", he stated.

For the SAK chair, the most severe problem of the present system is that the level of employer organisation membership establishes whether general validity applies - the employers' organisation which signed an agreement must represent at least half the sector's employers for this to happen. Mr Ihalainen made the further criticisms that the statistics establishing general validity are unsound, that administrative decision-making on the issue is dependent on the views of individual civil servants, and that, in disputes that concern whether a particular collective agreement should apply or not, there is a lack of legal security and protection from both the employer's and the employee's point of view. In such cases, the parties must await decisions on pay and holidays from various courts, and this can take years, he said.

In order to solve the perceived problem, Mr Ihalainen presented proposals for the strengthening of the general validity system:

  1. the collective agreement with the widest coverage in each sector should be generally valid, and the Employment Contracts Act (FI9810179F) should be amended to this effect;
  2. statistics should be improved and updated;
  3. disputes concerning general validity should be removed from the jurisdiction of lower courts, and handled by one expert institution - the labour court; and
  4. a special committee with an independent chair should be established jointly by the social partners. This body should make statements as to which agreement is generally valid in a sector, and any disputes should be processed in the labour court.

SAK's demand has already been rejected by the National Coalition Party (Kansallinen Kokoomus), which is in the governing coalition and has supporters among small business. The Social Democratic Party (Suomen Sosiaalidemokraattinen Puolue, SDP) and the Left Wing Alliance (Vasemmistoliitto), which are in close contact with the trade union movement, have to seek a balance between SAK's demands and the necessity for government cooperation on this issue. Mr Ihalainen's speech can also be held as a clear signal to the Federation of Finnish Enterprises (Suomen Yrittäjät, SY), the body largely representing small and medium-sized enterprises, which has recently announced that it wishes to become a negotiating party in the incomes policy talks, despite its previous aim of abolishing the general validity system (FI9906108F). SY has many members which do not belong to employers' organisations having the right to conclude collective agreements - which adds to the complication and lack of clarity of the current definition of general validity.

In the event that the demand for strengthening general validity remains firm, some fencing between the government parties may be seen as early as autumn 1999 when the preliminary discussions on incomes policy start. The Confederation of Finnish Industry and Employers (Teollisuuden ja Työnantajain Keskusliitto, TT) and the Employers' Confederation of Service Industries (Palvelutyönantajat, PT), which are currently the employers' negotiating parties at the incomes policy table, have kept a low profile on the issue and will take their stands later on.

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