Government bill extends flexibility provisions to unorganised employers

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In October 1998, the Finnish Government decided to present a bill on extending the provisions in "generally valid" collective agreements which allow flexibility - ie deviations from employment law - to cover employers who do not belong to employers' organisations. Trade unions consider this a serious attack on the prevailing policy of consensus and tripartite cooperation.

Sectoral collective agreements in Finland may contain provisions which are more flexible - ie less advantageous to the employee - than the strict rules stipulated in labour law. However, where an agreement is declared "generally valid" - ie has its legal effect extended to cover all employers in a sector, irrespective of whether or not they are members of the signatory employers' organisations - these flexible provisions may not be applied by the companies which are not members of employers' organisations. This issue has proved controversial, and a tripartite committee examining a reform of the Employment Contracts Act has been unable to agree on the subject (FI9810179F). The main protagonists in the dispute have been the Federation of Finnish Enterprises (Suomen Yrittäjät, SY) - an organisation representing small and medium-sized firms which do not belong to those employers' organisations which have the right to negotiate collective agreements - and the trade unions.

On 22 October 1998, with no agreement reached in the tripartite committee, the Government decided to issue a bill on the subject, which will provide that all employers covered by generally valid collective agreements can utilise any provisions in the agreements which deviate from labour law provisions concerning sick pay, redundancies, annual leave and study leave. The disagreement over this issue had threatened the stability of the coalition Government. The conservative National Coalition Party (Kansallinen Kokoomus) supported SY's demand that flexibility provisions in generally valid collective agreements should be widened to cover unorganised employers, while trade unions rejected this and sought support from the Social Democratic Party (Suomen Sosiaalidemokraattinen Puolue). Unions now fear that their interests have been disregarded.

The Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK) sees the decision on the proposed bill as one-sided and a serious attack on the prevailing policy of consensus and tripartite cooperation. SAK alleges that the decision is the price being paid for the fact that in spring 1998, the previous managing director of SY entered the Government as the new Minister of Justice, representing the conservatives. SAK sees the decision as threatening both the future work of the Employment Contracts Act committee and the balanced development of collective agreements. SAK is appealing to the Members of Parliament to reject the new bill.

According to the vice-chair of the SAK board, Pekka Ahmavaara, the bill will cause a far larger problem than that which the government thinks it will solve: "SAK cannot accept people getting a free ride on contractual rights, with no responsibilities. The agreement that has now been developed spurs employers on to become unorganised. It puts an end to local-level agreements and threatens the labour market stability that Finland so desperately needs in order to achieve success.".

The general secretary of the Finnish Confederation of Salaried Employees (Toimihenkilökeskusjärjestö, STTK), Seppo Junttila, warns that in the worst scenario the decision "may hamper the functionality of the smoothly working incomes policy system. Furthermore, the willingness to sign company level agreements diminishes considerably."

For the Confederation of Unions for Academic Professionals (Akateemisten Toimihenkilöiden Keskusjärjestö, AKAVA), its chair Mikko Viitasalo believes that "this bill will widen the rights of unorganised employers, but will not require any of the responsibilities that apply to organised employers."