Paper industry dispute leads to debate on labour market peace

In September 1997, the Finnish Paperworkers' Union was fined by the Labour Court for taking illegal industrial action in a dispute related to a strike by workers at Nokia Paper Ltd. The case has initiated a debate on the effectiveness of Finland's system of "labour market peace".

Subcontracted maintenance personnel working at Nokia Paper Ltd took lawful industrial action from 4-15 September 1997 in a dispute over the claimed unilateral decision of their employer, ABB Service, to amend its interpretation of the sectoral collective agreement, without local bargaining over the changes. The Paperworkers' Union organised wider industrial action which it claimed was in support of the Nokia/ABB strike (FI9709132F). However, the sectoral employers' organisation, the Finnish Forest Industries Federation, brought a case in the Labour Court, claiming that the Paperworkers' Union's action was not lawful support action, but in fact concerned the clause in the sectoral collective agreement governing the use of outside labour. Under Finnish law, as long as a collective agreement is in force, any industrial action over its provisions is illegal. Violation of this "peace obligation" is punishable by fines. In disputes over the interpretation of an agreement, the issue is to be addressed in the first instance by local-level negotiations.

During the dispute in September, the Labour Court (made up of equal numbers of representatives of central trade union and employers' organisations and neutrals) ruled in favour of the employers' case, and imposed a fine on the Paperworker's Union amounting to several hundred thousand FIM. In spite of this, the union decided to continue its strike action and the legal proceedings will now continue in the Labour Court. According to the estimates of the employers, the industrial action has caused the paper mills losses amounting to FIM 200 million.

The Central Organisation of Finnish Trade Unions (SAK) defends the strikes called by the Paperworkers' Union, arguing that, in its opinion, ABB Service had not been willing to negotiate with its own personnel who were about to go out on strike, and only after the union held solidarity strikes and threatened massive action was the employer willing to start negotiations.

SAK can see no reason for tightening up the existing peace obligation, stating that when this kind of event occurs, the situation in the labour market is bound to become strained. It believes that the Nokia Paper strike has raised a number of questions about the role and limits of local bargaining in disputes over an agreement's interpretation. SAK asks whether the purpose of local bargaining is to let the employer dictate the decisions - as it claims occurred in the ABB case - or to unite the efforts of the two parties in order to reach a common solution.

As a result of the strike the social partners and the Government have started public discussions about the system of labour market peace. The level of strike penalties and the overall legislation are now under evaluation.

The Confederation of Finnish Industry and Employers (TT) believes that the legislation in this area should be amended urgently, making it possible to prevent illegal strikes and strike threats. TT considers that the preconditions for centralised incomes policy agreements are generally weakened by illegal disputes. According to TT, the penalties imposed on the Paperworkers' Union by the Labour Court were too low compared with the damage the strike has caused. The employers have also proposed that illegal labour disputes should be prohibited by means such as a decision of the law courts or the Council of State, and that such disputes should be solved by means of compulsory conciliation.

According to Kirsti Palanko-Laaka, a head of department at SAK, the level of the strike penalties should not be raised, as they are already a sufficiently severe sanction. On the other hand, the Labour Court could be given the right to order a temporary ban on industrial action, which should also stop any action by employers concerning the dispute (quoted in the Pohjois-Karjala newspaper on 18 September).

Prime Minister Paavo Lipponen has stated that the Government is pondering all possible means to hinder strikes disturbing social peace in society, and does not exclude raising penalty levels. Liisa Jaakonsaari, the Minister of Labour, is not in favour of raising the penalties, but admits that last time the levels were raised, the number of illegal labour disputes fell (both quoted in Helsingin Sanomat on 19 September).