Rifts open between government and trade union movement

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In June 2000, the Finnish trade union movement is in a state of agitation over a proposed reform of the Employment Contracts Act, a bill on the liberalisation of opening hours in retail and plans for privatising state-owned companies. The long-lasting cooperation between the "rainbow" coalition government and the trade unions seems to have sustained severe bruises.

Relations between the "rainbow" coalition government (consisting of left- and right-wing parties) and the trade union movement seem to have reached a turning-point in June 2000. So far, during the current economic upswing which has lasted several years, tripartite cooperation has continued without any major conflicts. The economy started to grow remarkably when - after the 1990s depression - the first centralised incomes policy agreement was reached for the years 1995-7, whereupon the GNP and employment rate took a turn for the better, settling into a good growth trend. In the context of this positive economic development, the social partners and the government succeeded in concluding another two-year central incomes policy agreement for 1997-9 (FI9801145F). During the periods covered by centralised agreements, the relations between the government and the social partners functioned quite straightforwardly. The Prime Minister, Paavo Lipponen, tried to obtain a third central agreement in autumn 1999 - but a few powerful trade unions (such as those in the paper and chemicals sectors) thwarted this intention, a little surprisingly, by opting instead for sectoral bargaining to deal with specific sectoral problems (FI9910124N). In the subsequent sectoral bargaining round, some of these unions went on strike in pursuit of their demands (FI0004142F). 2000's spring of strikes opened the door to an airing of issues of disagreement between the unions and the government. Currently, relations between the government and the trade union movement seem to have become increasingly tense over issues such as proposals to amend the provisions concerning the "general validity" of collective agreements in the Employment Contracts Act (FI0006151F), the liberalisation of opening hours in retail (FI0005148F) and privatisation of state-owned companies.

Dispute over Employment Contracts Act

If some unions struggled to deal sector-specific problems during the centralised incomes policy agreements, "sector-specific" problems can also be said to exist within the government. Within the coalition, the right-wing National Coalition Party (Kansallinen Kokoomus) has, throughout the government's term of office, experienced a need to get across its conservative views more strongly. The most pointed example of this may be the reform of the Employment Contracts Act. The work of a tripartite committee examining this issue proved a long, difficult process, which was brought to a conclusion at last in spring 2000 with the agreement of a compromise proposal (FI0003138F). After many years, the social partners were finally able to agree on the matter and decided to submit their proposal to the government. However, the issue of general validity - ie making a collective agreement binding on all employers and employees in a sector, and not just members of the signatory organisations - arose as a bone of contention, and this has now been politicised into a battle between the government and the trade union movement. At present, a sectoral agreement is considered generally valid if its coverage is nationwide and it is generally applicable to the sector concerned, in that about half the employees in that sector work for an employer which is a member of an organisation signing the agreement. In the committee's compromise proposal, a formulation was approved which also took into consideration the employees' level of union membership in assessing whether an agreement is generally applicable, besides the level of employers' organisation.

The Employers' Confederation of Service Industries (Palvelutyönantajat, PT) and the Federation of Finnish Enterprises (Suomen Yrittäjät, SY) submitted their differing views in the committee's report. SY, which represents enterprises which are not members of employers' organisations, did not approve the committee proposal as regards the new formulation of the general validity rule. SY wanted to change the proposal, and thus anatagonised the trade union confederations, which demanded that the proposal should remain as the committee had presented it. The differing views on the formulation have now caused relations between the government (within which the National Coalition Party has many supporters among the entrepreneurs represented by SY) and, especially, the Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK) to become inflamed.

Heated debate on opening hours in retail

The government's bill on extending shop opening hours is also causing friction in between the government and the unions. According to the bill, grocer's shops - ie shops whose sales consist mainly of food supplies - with a floor area of up to 400 square metres would be allowed to open on Sundays between 12.00 and 21.00. Other retail shops could open on Sundays in May and November, in addition to June, July, August and December as currently permitted. The trade unions in the retail sector consider the proposal to be unnecessary and have opposed it. The left-wing parties in the government and parliament have started a heated debate on the issue, which will also be reflected in relations between the government and trade union movement.

Privatisation of state-owned companies

The latest dispute between the government and SAK arose in June 2000, when the Ministerial Committee for Economic Policy decided to approve a proposal from the Ministry of Trade and Commerce regarding an increased "supplementary authority" to privatise state-owned companies. The new privatisations would affect state-owned enterprises forming a part of Finland's basic industry, in metals, energy and chemicals. It is also proposed that the proportion of state ownership in many companies should be reduced to below 50%, in which case the government would also lose its control of these firms. SAK and its affiliated Metalworkers' Union (Metalli) fear a loss of jobs, and both have announced that they oppose the government plans. SAK has clearly stated its stand against privatisation: "SAK believes that in the arrangements concerning state companies, the brakes should be used instead of the accelerator." According to the union confederation, "the state companies have had an important role in Finnish industrialisation. State ownership is significant in the sense that business activities which are important to Finland's success and employment situation should remain to an adequate extent within the field of national decision-making." SAK recalls that there have been recent, bitter experiences of profitable business activities being terminated for the sole reason that the foreign owner has considered it important to locate production elsewhere (FI0002136F).

SAK demands a wider debate of principle, and clarification of how the proposed ownership arrangements will function in practice. It believes that only after a wider societal debate should new decisions be made. The organisation wants the preparations for decision-making to be made in good cooperation with the state-owned companies.

According to the Metalworkers' Union, "the proposition should be put on ice within the government, and an open, thoroughgoing debate should be started in parliament, in the government and in industry as to what is the role of state companies in safeguarding Finnish industry." The organisation is also worried about employment: "In these processes of change, the position of the personnel has always been left in the background. After listing on the stock exchange, the resolutions passed by parliament concerning, for example, safeguarding of the position of the personnel, also appear to have been forgotten." The stands taken by the trade union movement have had the effect that the government has decided to postpone the decision on an extension of supplementary authority until autumn 2000.

Commentary

The rainbow government is a consensus coalition between left- and right-wing parties, within which the borders have become blurred. In the activities of the government as regards working life issues, a political vacuum seems to have been left, which the social partners are trying to fill. The pressure from market forces has steadily been growing stronger, requiring flexibility and change in companies, which are at the mercy of the markets. At the same time, as competition becomes more intense and markets are liberalised, activities must be improved and made more effective, both in domestic and export companies. In the ever more open economy, the challenge for the labour movement is whether it is able to adapt to the new, global operational environment. The employers' organisations aim to do away with rigidities, so that companies can better respond to the requirements of the markets.

In Finland, the social partners have traditionally had considerable power, and they have often influenced crucial decisions of the government and parliament. The present situation is problematic, because opposing interests meet in the coalition government. The conclusion to be drawn from the events of spring 2000 is that relations between the trade union movement and the government have clearly become more tense. The action of the government will have a crucial influence on whether or not a new centralised incomes policy agreement can be concluded in autumn 2000 - which has been the goal of at least the Social Democrat Prime Minister, Paavo Lipponen. (Juha Hietanen, Ministry of Labour)