Unions gear up for decentralised approach to pay bargaining

Following the announcement by the Federation of Finnish Technology Industries that it would follow a decentralised approach in this year’s bargaining round on incomes, the central social partner organisations are getting ready for the upcoming talks at sector and union level. Meanwhile, Prime Minister Matti Vanhanen has stated that the government would base its tax decisions on the upcoming pay agreements.

At the end of April 2007, the influential Federation of Finnish Technology Industries (Teknologiateollisuus) announced that it would be taking a decentralised approach to the upcoming round of bargaining on the national incomes policy agreement. The announcement came just a day before Prime Minister, Matti Vanhanen, met with the social partners to discuss the issue. Mr Vanhanen has been arguing that the preconditions are not in place to allow a centralised agreement to be reached.

Following on from this, the social partners are preparing for talks on the new agreement at sector and union level. The trade unions have accused the employers of being responsible for the failure of centralised negotiations on the country’s future incomes policy. The national conciliator, Juhani Salonius, stated that neither the government nor the employers were responsible for the fact that no centralised talks would take place in this year’s bargaining round; he believes that the conditions for such talks were absent.

Following a meeting on 7 May 2007, the Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK) indicated that all its member unions were ready to cooperate closely in the forthcoming union-level bargaining round. During the meeting, SAK agreed on the form of cooperation and a set of common objectives following Teknologiateollisuus’ announcement in April that it would not participate in the tripartite national incomes negotiations. The President of SAK, Lauri Ihalainen, stressed that the central union organisation did not intend to leave its trade union affiliates to fend for themselves during the union-level talks.

Central organisations involved in union-level negotiations

The central trade union confederations – SAK, the Finnish Confederation of Salaried Employees (Toimihenkilökeskusjärjestö, STTK) and the Confederation of Unions for Academic Professionals (Akateemisten Toimihenkilöiden Keskusjärjestö, AKAVA) – will be involved in the union-level negotiations. The setting of joint goals for the upcoming union-level negotiations started as soon as the basis for centralised national incomes policy agreement had broken down. The confederations are collating the most important issues in relation to working life; this information will be put forward at the union-level negotiations. The confederations will also be making sure that their member unions conclude agreements of the same duration, so that it will be possible to revert to centralised negotiations once the term of this year’s agreements is over: STTK recommends agreements covering a period of two years. According to the President of STTK, Mikko Mäenpää, the most important common goals of STTK-affiliated trade unions are equality, the position of trade union representatives, fixed-term contracts and the conditions of hired work. Mr Mäenpää claimed that the employers side wishes only to address pay-related issues in the new agreements and do not want to focus on issues concerning quality of working life.

Government to base tax decisions on pay agreements

Prime Minister Matti Vanhanen has stated that the government would base its decisions concerning tax levels on the outcome of future pay agreements and general economic developments. The chairs of the central labour-market organisations admitted that harmonising the various pay deals in the forthcoming union-level bargaining round represents a challenge. SAK’s President Lauri Ihalainen indicated, however, that he was confident about the unions’ ability to keep pay increases within reasonable limits.

Mr Vanhanen declared that he expected sustainability, stability, predictability and the promotion of competitiveness from the union-level negotiations. Following a meeting with various labour market leaders, he warned that: ‘We are undergoing a period of economic prosperity and, under such conditions, it is easy to make mistakes that have inflationary effects.’

Pertti Juhani Jokivuori, Statistics Finland