Deadlock in paper industry bargaining

By the beginning of April 2005, collective bargaining negotiations had been successfully concluded in all the major sectors that had remained outside the scope of the recent centralised agreement. The only exception was the paper industry where the social partners have thus far hardly found any common ground.

A 2½-year centralised agreement covering about 90% of Finnish workers was concluded in December 2004 (FI0501203F). Thereafter, negotiations have taken place in those sectors where social partner organisations decided not to adopt the deal. Construction was the largest of these sectors with 83,000 blue-collar workers having remained outside the scope of the agreement. The negotiation process moved forward rather smoothly in the nine construction sub-sectors and by the end of March 2005 agreements had been reached in all of them. Most of these were concluded between the Finnish Construction Trade Union (Rakennusliitto) and the Confederation of Finnish Construction Industries (Rakennusteollisuus, RT) and came to have a validity of three years. During that period, wages were agreed to be raised by a total of 6.8%. In comparison, the central agreement included wage provisions of 4.6% over the 2½ years of its validity. It was also agreed, among other things, that the piecework system will be more widely adopted and the use of foreign labour will be subject to new regulations and increased scrutiny. The aim of the latter measures is mainly to tackle undeclared work, an issue which RT and Rakennusliitto have already addressed in the past (FI0406202F).

Following difficult negotiations, an agreement was also reached between the Federation of Professional and Managerial Staff (Ylempien Toimihenkilöiden Neuvottelujärjestö, YTN) and the Technology Industries of Finland (Teknologiateollisuus) over the contract of higher salaried employees in metalworking and electrical industries. The new agreement covers 57,000 employees, one third of who work for the Finnish multinational Nokia. The validity period is the same as for the central agreement and pay rises are slightly lower. YTN deemed the result a success as it achieved better compensations for overtime work and for job related travelling in free time and because improvements were made to the position of shop stewards. Meanwhile, Teknologiateollisuus expressed its satisfaction with the agreed decision to promote workplace level bargaining.

Besides the two large sectors of construction and metalworking and electrical industries, bargaining has been successfully completed in various smaller sectors. Agreements have in general quite closely followed the pay increases and the validity period of the central agreement while adopted qualitative measures have been more sector-specific. Recourses to industrial action have been very limited.

The only sector that employs workers in the tens of thousands and in which new agreements were not concluded by the beginning of April 2005 is the paper industry. Moreover, the prior agreements of the sector have already expired. The Finnish Forest Industries Federation (Metsäteollisuus), the organisation representing paper industry employers, already decided in November 2004 that the issues confronting the sector cannot be resolved in central negotiations. Thus both waged and salaried workers of the sector remained outside the scope of the deal. The former are represented by the Finnish Paper Workers’ Union (Paperiliitto) and the latter by the Union of Salaried Employees (Toimihenkilöunioni, TU). The total number of affected workers is over 30,000. The fundamental disagreement the unions have with Metsäteollisuus is over the economic circumstances facing the paper industry. Metsäteollisuus argues that profitability is now worse than for a long time following secularly declining paper prices and rising real wages. Therefore, it insists that it is vital to remove the barriers to productivity growth that exist in its collective agreements with the two unions. To achieve this, Metsäteollisuus demands for example that workplace level bargaining should be dramatically extended at the expense of general increases, production stoppages during holiday periods should be scrapped, fines for illegal strikes should be raised, wages should not be paid during the first two days of sick leave, and summer holidays should be split in half. Paperiliitto and TU have been astonished by Metsäliitto’s demands and they strongly disagree on the need to cut workers’ benefits. Their objective is instead to improve pay and working conditions in various ways. Paperiliitto points out that Finnish paper workers are estimated to have been the most productive in the world in 2002 and even after that productivity has grown at least as fast as in competing nations. Growth in real wages, however, has lagged behind according to Paperiliitto, whose aim is to secure a one-year agreement with 3.1% wage increases.

In March 2005, Paperiliitto formally ended the negotiation with Metsäliitto arguing that no advances had been made until then and that the employer was not ready at all to even negotiate on its objectives unless it would first yield to all of Metsäliitto’s demands. Paperiliitto also set an overtime ban for blue-collar paper workers which started on 30 March. The industrial action received support from the Swedish Paper Workers' Union (Pappersindustriarbetareförbundet) which announced that it would not allow any production to be moved from Finland to Sweden because of the overtime ban or because of a possible future strike. TU and Metsäliitto continue to be in talks with each other but progress has according to TU been very limited.

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