Paperworkers' Union seeks a separate agreement for the forestry sector

Finland's possible membership of EU Economic and Monetary Union (EMU) is having a major impact on the labour market, with increasing pressures towards decentralisation of decision-making. The current incomes policy is seen as creating difficulties in the resolution of sector-specific problems. The decision in June 1997 by the Paperworkers' Union to seek a separate agreement, rather than be covered by a new overall incomes policy, has highlighted these issues.

The announcement in June 1997 by the Paperworkers' Union of its intention to conclude a separate agreement with the employers in the forestry sector (FI9706119N) has undermined the common approach of Finnish trade unions towards the negotiation of a new broadly-based incomes policy. The Paperworkers' Union is one of the largest unions in Finland and plays a key role in the forestry sector. If the union were to withdraw from a new agreement between the social partners on a new incomes policy, it could undermine the legitimacy of any such agreement.

Despite this decision, Jarmo Lähteenmäki, the chair of the Paperworkers' Union has indicated his general support for the economic policy of Prime Minister Paavo Lipponen's Government, in an interview in Kauppalehti. The union also accepts the importance of ensuring that low inflation and low interest rates continue. Nevertheless, Mr Lähteenmäki has been worried about the high level of unemployment and is dissatisfied with the adverse effects of existing incomes policy on employment levels amongst his members. According to Mr Lähteenmäki, the only sector where the so-called "job-creating" effect of incomes policy has led to more jobs being created in Finland has been the metal industry. He would not be drawn on what his union's pay claim was likely to be later in autumn 1997; the union is being pressured by its members to increase pay in response to the high levels of profitability in the forestry sector.

By seeking a separate agreement with the employers, the Paperworkers' Union is seeking to resolve some of the problems affecting its members which were not dealt with when the current incomes policy agreement was made during the recession in late 1995. Many outstanding problems, apart from pay, remain unresolved.

Companies in the forestry industry have embarked on a major reorganisation of paper mills. The resulting work reorganisation means that problems of collective agreement coverage may result in a haemorrhage of Paperworkers' Union members to join other unions. The union faces the threat of losing as much as a third of its 30,000 employed members.

Mr Lähteenmäki is anxious to resolve issues of working time, employment protection, and personnel funds. The largest forestry companies intend to close down the personnel funds (a form of profit-sharing scheme) which were one of the incentives under the previous incomes policy. The union believes that the advent of EMU will mean that there will be increasing pressure for more decentralised decision-making. Moreover, the union is seeking some form of protection against what it sees as the sensitivity of the paper industry to economic cyclical fluctuations. Although the paperworkers have decided to seek a separate agreement and have undermined the common approach of the trade unions towards a new incomes policy, the Central Organisation of Finnish Trade Unions (SAK) has adopted a sympathetic stance towards the particular problems of this union.

Other unions' opinions on the forthcoming negotiations on a new incomes policy are awaited.