Social partners mainly welcome EU services directive

The new services directive of the European Union opens up the possibility for increased foreign competition among service providers in the Finnish market. So far, the response of Finnish social partner organisations to the directive has been largely positive. Trade union confederations have taken a favourable stance towards the directive, but the Confederation of Finnish Industries has criticised the narrow scope of the directive.

The purpose of the new EU directive on services in the internal market is to promote the exporting of services across the national borders of the EU Member States. Chief Executive Officer (CEO) of the organisation Invest in Finland, Tuomo Airaksinen, says that once the directive takes full effect Finland will gain new service sector entrepreneurs from other countries. Mr Airaksinen sees the building of maintenance services, in particular, as a field that could attract more entrepreneurs from abroad. Moreover, foreign investors have already been buying large amounts of property in Finland.

At a practical level, the directive will have little impact on the activities of foreign companies that are already operating in Finland. In fact, it is already quite easy for companies to set up business in Finland – somewhat easier than in many other EU Member States.

Position of the social partners

The directive applies to a diverse group of professions, from construction workers and tour guides to management consultants and real estate agents. An expert of the Confederation of Finnish Industries (Elinkeinoelämän keskusliitto, EK), Minna Niemivirta, estimates that the work on transposing the directive into national law may take up to three years to complete. While the process will be fairly straightforward in Finland, many other EU countries will have to enact extensive legislative changes. For this reason, Ms Niemivirta does not believe that the impact of the new service rules will be fully evident until 2010.

Employers decry narrow scope of directive

EK believes that the most important implication of the directive is that it will open doors for Finnish businesses in other countries and this will help to stimulate the local Finnish economy. However, the directive does not meet all business expectations. According to EK, healthcare services and temporary agency or contract work should have been included within the scope of the directive: excluding certain sectors relieves Member States from having to review their administrative procedures. EK considers that the job security of temporary agency workers and contract workers could be strengthened if Member States were required to publish their national restrictions to the free movement of services.

Trade unions welcome directive

Trade union confederations have taken a favourable stance regarding the directive, because it means that foreign companies operating in Finland will have to comply with both Finnish legislation and terms and conditions of employment.

According to the Deputy Director of the Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK), Matti Viialainen, the directive is balanced and corresponds to the aims of SAK and the European trade union movement. Mr Viialainen declared: ‘For instance, Estonian and Polish enterprises have to follow Finnish collective agreements if they are offering services in Finland.’ In his opinion, the directive represents a loss for protectionists who are against the open market and for those businesses which tried to use the directive to sideline trade unions, the right to strike, and the terms and conditions of employment of the country in which they operate.

The Finnish Confederation of Salaried Employees (Toimihenkilökeskusjärjestö, STTK) has expressed its satisfaction with the compromise reached. The most important thing, according to STTK, is the fact that Finnish legislation and terms and conditions of employment have to be respected by the foreign enterprises that choose to operate in Finland.

Pertti Jokivuori, Statistics Finland, University of Jyväskylä