TT survey finds that company-level agreements will increase

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The Finnish employers' confederation, TT, conducted a survey in autumn 1998, seeking information on the measures that member companies consider will bring them success in the new millennium. According to the results, a key future development will be an increase in company-level agreements. The actual direction of change will also depend partly on the next government coalition and possible labour market reform.

The Confederation of Finnish Industry and Employers (Teollisuuden ja Työnantajain Keskusliitto, TT) launched a wide-ranging survey in September 1998, aimed at finding out from its member companies in the industrial, building and service sectors what ideas and measures they consider will bring them success in the next millennium. Over 500 companies responded to the survey.

Support for local bargaining

According to the results of the survey (reported in Teollisuustieto 17/98), in the area of collective agreements, one goal of TT members is to achieve framework agreements at sectoral level, which provide increased opportunity to develop company-level agreements (FI9708127N). Another aim is to develop the present system for ensuring labour market peace, in order to make it more watertight/unshakeable than at present. This move towards local bargaining was seen as the correct direction by companies generally, regardless of their size. Compared with previous surveys, the number of managers who hold this opinion is clearly increasing. The companies consider themselves well prepared internally for concluding agreements at company level. Company size did not influence this viewpoint, which can be interpreted as meaning that the companies have increased their resources for local-level agreements as a part of future labour market policy.

According to the managers surveyed, good prerequisites exist for increased local bargaining (FI9803153F). In the estimation of half the managers, other employees also regard company-level agreements positively. However, one-fifth of the respondents in each category of company think that the attitudes of employees are less positive, or even negative. Managers consider that the development of company-specific preparedness for more cooperative management systems should be continued, so that even those employees who have a negative attitude towards local agreements can become convinced of their benefits for companies and for staff. In particular, companies would like to agree locally on working time and wages. Almost 90% of the respondents considered that it would be good from the standpoint of company needs if only the minimum wages and wage structure were agreed on through sectoral collective agreements.

The companies stated that they were already prepared to create company-level wage systems. Smaller enterprises were somewhat less prepared, but some 80% of them felt that their preparedness was good. Of the small and medium-sized enterprises (SME s), 20% felt a need for development in this area, but far fewer of the big companies did so. Personnel are expected by 70% of the respondents to adopt a positive or quite positive attitude toward a result- or performance-related wage structure. Even among the smaller companies, 60% were of this view. Only 10% of the respondents in each company category expected that the personnel would react negatively. Development of a result-related wage system, it was widely believed, would have the strong support of companies and personnel.

General cuts in working time were regarded as completely out of the question (FI9807169N). No necessity was seen for such reductions. Over 90% of the respondents rejected the idea, and none supported it. Only an occasional respondent expressed some degree of understanding of such cuts. Instead, diversification of working time was held to be good both for the companies and the personnel. Nine out of 10 companies felt that working time could be diversified for reasons of change in demand, adaptation, increased operating time and personnel needs.

The influence of possible labour market reform

The questionnaire responses pave the way for the labour market reform proposed by the largest opposition party, the Centre Party (Suomen Keskusta), which was overhauled in autumn 1998 in advance of the coming parliamentary elections in spring 1999 (FI9806165F). The aim of the reform would be to widen the scope for local-level agreements so that only minimum wages would be agreed on through national sectoral collective agreements. Both trade unions and the left-wing political parties have rejected the proposals for radical reform completely.

Crucial to the actual direction of change will be what kind of alignment the conservative National Coalition Party (Kansallinen Kokoomus) - currently part of the governing "rainbow coalition" - will adopt when it woos the votes of the entrepreneurs. The party is in a contradictory position, as it also has strong support among some groups of workers - for instance, in the Confederation of Unions for Academic Professionals in Finland (Akateemisten Toimihenkilöiden Keskusjärjestö, AKAVA). AKAVA has rejected the reform proposal, as have the other main trade union organisations - the Finnish Confederation of Salaried Employees (Toimihenkilökeskusjärjestö, STTK) and the Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK). Among the reasons for their stance, the unions blame local-level agreements in municipalities that have led to lay-offs among teachers (FI9804160N).

If the National Coalition Party follows the line espoused by employers, this could constitute a threat to trade unions after the elections, in the event that the party forms the next government in coalition with the Centre Party. In a September 1998 survey conducted by SAK among its members, 36% considered the present coalition to be their preferred choice for the next Government. Only 6% of the members saw a coalition between the Social Democratic Party (Suomen Sosialidemokraattinen Puolue) and National Coalition Party as the best alternative for wage earners. Only 4% supported the idea of a non-socialist government led by the National Coalition and Centre parties. It appears that SAK members would generally support a continuation of the present government for the next period, because they believe that tripartite cooperation has worked well. SAK has already been trying to motivate its members to go to the polls in the elections. The worst scenario for the organisation would be if a large proportion of its members neglected to vote, in which case its fear of a right-wing government might be realised. Even the present government has provided extended opportunities for the conclusion of local-level agreements (FI9810180N). The extension of these possibilities also to cover employers not organised in employers' organisations has aroused strong opposition in the labour movement (FI9810179F). In the light of this experience, a prognosis can be made as to what a rightward change of coalition might mean for industrial relations.

Commentary

According to the TT survey, a clear goal of management personnel is to increase company-level bargaining, which is seen as a survival strategy for the next millennium. Local-level agreements have become more common during the 1990s (especially in the metalworking industry), and the experiences gained have been positive so far for both bargaining parties. This widening of the scope of local bargaining has proceeded to a considerable degree through the provisions of sectoral collective agreements, without legislative action. However, there is a limit to how far the shift towards the local level can proceed, and it seems that - politically, at least - the talk of this shift antagonises wage earners. Furthermore, it is good to remember that political rhetoric and actual practice are not necessarily the same. What does seem obvious is that now, already, the markets are dictating the direction of the development. (Juha Hietanen, Ministry of Labour)

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