Incomes policy negotiations begin amid discord

Finland's central social partner organisations started talks over a new national incomes policy agreement in early November 2004. Differences between employers and trade unions are considered especially serious on this occasion - the nature of pay policy, the level of pay increases and 'qualitative' measures such as redundancy protection and contractor responsibility are all contested.

Negotiations on a new central incomes policy agreement started on 2 November 2004, as the current two-year agreement (FI0212103F) is nearing its end. All three of the trade union confederations had already expressed their willingness to negotiate by the beginning of October. The employers’ central organisation, Finnish Industries (Elinkeinoelämän keskusliitto, EK), however, refused to launch negotiations, arguing that the objectives set by the union confederations were too radical. In the following weeks the social partners held informal talks and some rapprochement was reported to have taken place, but the essential goals of neither the union confederations nor EK changed during this period. Nonetheless, at the end of October, EK changed its position and decided that negotiations could start. The aim of the social partners is to conclude the talks by the end of November.

Both EK and the union confederations agree that differences of opinion are especially sharp in this round of negotiations. The nature of pay policy is perhaps the most fundamental of the contentious issues (FI0408202F). The Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK) and the Finnish Confederation of Salaried Employees (Toimihenkilökeskusjärjestö, STTK) argue that wages should continue to be set in a 'solidaristic' manner, so that a general pay rise would constitute a major part of wage increases. Moreover, SAK would add a provision to the agreement granting higher rises for low-wage sectors and STTK a similar provision for female-dominated sectors. EK and the Confederation of Unions for Academic Professionals in Finland (AKAVA) oppose both of these ideas and insist that wages should mainly be set at sectoral or workplace level, not centrally through general pay increases. According to EK, the general wage rise should be very modest while the rest of pay increases needs to be 'company-specific'. Meanwhile, AKAVA argues that the level of wage increases should be determined centrally but that the decisions concerning the distribution of the rises should be taken at sectoral level.

The social partners also disagree as to the level of pay increases. EK has hinted that the government's recent proposal (FI0410201N) of major income tax cuts combined with pay increases averaging 0.7% per year is reasonable. SAK and STTK do not agree; they argue that disposable incomes should mainly be raised by wage increases, not tax cuts. The social partner organisations will set their official pay increase targets in the course of the negotiations, after dealing with the so-called qualitative issues first.

SAK and STTK have formulated their three main qualitative objectives in close cooperation with each other for this round of negotiations. They announced these on the eve of the talks. The first is reinforced redundancy protection, which was a central goal of SAK and STTK in the last incomes policy negotiations in 2002 (FI0209102F), but which they failed to achieve. This time around they are demanding that special 'employability' programmes should be drawn up for each individual worker who is made redundant, and the employer in question should bear the costs for doing so. Additionally, all employers would have to contribute to a fund from which redundant workers would be given direct financial support.

The second main objective of SAK and STTK is to increase 'contractor responsibility'. This would entail making the purchaser of subcontracting services accountable for compliance with collective agreements and legislation. To achieve this, they insist, unions should be granted the right to bring court cases independently of their members, because individual workers sometimes do not dare to do so.

The third common goal of SAK and STTK is to improve the position of shop stewards (workplace trade union representatives). To this end they propose, for example, that shop stewards' training opportunities and access to company information should be increased. Moreover, the unions want shop stewards in all companies, including small and medium-sized enterprises, to be entitled to the same set of basic rights.

EK has expressed its opposition to all three of these qualitative demands made by SAK and STTK. Its aim in the negotiations is to make collective bargaining in Finland increasingly flexible and workplace-oriented, and it believes that the measures proposed by the two union confederations would be steps in the wrong direction.

AKAVA has set similar qualitative objectives to those of SAK and STTK in terms of redundancy protection and the position of shop stewards. In addition, it argues for restricting the use of fixed-term contracts and for increasing the monitoring of actual working time.