Slow progress in negotiations on new collective agreements

Negotiations for new collective agreements have progressed slowly, with industrial action arising in a number of sectors. During sectoral-level collective bargaining, the main labour market confederations focused on economic policy seeking to promote employment. However, the Confederation of Finnish Industries announced that it had broken off negotiations on a framework for pay increases after the confederation-level negotiations were made public.

Three-day strike in financial services

Trade unions in Finland’s financial services sector arranged a three-day strike in mid-December 2009. The industrial action followed the trade unions’ rejection of a compromise proposal to resolve a dispute over salaries and terms of employment. The rejected proposal would have given bank employees pay increases of 1.69%, on average, over a period of almost two years.

The trade unions turned down a proposal put forward by the national conciliator, Esa Lonka, stating that they were not satisfied with the proposed pay increases. The trade unions involved were: the Financial Sector Union (Suomen Rahoitus- ja Erityisalojen Ammattiliitto, Suora), affiliated to the Finnish Confederation of Salaried Employees (Toimihenkilökeskusjärjestö, STTK), which represents workers in the financial services, insurance, gaming and beverage sectors; Rahoitusleijonat, which represents Sampo Bank employees; and the Federation of Professional and Managerial Staff (Ylemmät Toimihenkilöt, YTN), affiliated to the Confederation of Unions for Academic Professionals (Akateemisten Toimihenkilöiden Keskusjärjestö, AKAVA). Some 30,000 workers in the financial services sector participated in the industrial action, including supervisors, specialists and professional staff.

The President of Suora, Tarja Lankila, highlighted that:

We wanted to apply the regular sectoral collective bargaining based on the specific needs and pay capabilities in the branch. Our target is to get a pay increase which is fair to employees in a situation where banks are showing favourable business results.

Representing employers at the bargaining table, the Federation of Finnish Financial Services (Finanssialan Keskusliitto, FK), affiliated to the Confederation of Finnish Industries (Elinkeinoelämän keskusliitto, EK), was prepared to accept the pay increase offer. The Chair of FK’s Labour Market Board, Heikki Vitie, stated that he was disappointed by the outcome of the negotiations.

We hoped the labour representatives would have evinced their responsibilities in these difficult economic circumstances. The offer was the most reasonable from every point of view, and would have allowed us to safeguard industrial peace in the sector.

Although no teller services were available at bank counters, cash dispensers, essential online services and card transactions continued to function quite normally. Salaries, pensions and social support payments were also deposited into customers’ accounts as usual. The negotiations have been continuing under the guidance of the national conciliator, Mr Lonka (FI0906029I).

Industrial action in aviation sector

Dispute over pilots’ terms of employment

A two-day pilots’ strike, held in mid-November, finally ended when the national carrier Finnair and the Finnish Airline Pilots’ Association (Suomen Liikennelentäjäliitto, SLL) reached agreement on a proposal by the national conciliator Mr Lonka. Some 730 flights were cancelled due to the strike, affecting the journeys of about 47,000 travellers. The strike also disrupted mail deliveries. Finnair has estimated that it lost between €3 million and €5 million a day during the strike. The strike was a continuation of a long-lasting dispute concerning, in particular, the use of external labour and pilots’ retirement age in the company (FI0903039I).

Following the agreement, the pilots immediately cancelled the strike and Finnair services returned to normal. The deal reduces pilots’ wages by 5% and introduces other cost-saving plans. For instance, the retirement age for new pilots will rise to 63 years of age. Through these measures, the company will save about €20 million, the SLL estimates.

Both sides gave in on the contentious issue of outsourcing. Under the agreement, Finnair can outsource, for example, two planes to its domestic partner airline Finncomm. However, the planes will not operate as Finnair flights. The Chair of SLL, Kristian Rintala, stated that:

It makes a big difference to us whether Finnair planes are flown by outsourced pilots or if the planes are leased to an outside company.

Five-day walkout by ground staff

At the beginning of December, a five-day walkout was organised by the Finnish Aviation Union (Ilmailualan Unioni, IAU), affiliated to the Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK). The strike was held in protest against the sale of the ground-handling services to the staff services company Barona. The latter company bought the luggage handling and terminal level services of Finnair’s ground handling subsidiary Northport between November and December. In the deal, a total of 500 Northport employees were transferred to Barona. The employees feared that their job security, and terms and conditions of employment could be weakened. The luggage handlers on strike were demanding better protection against dismissal.

However, IAU and Barona eventually reached agreement in the dispute. The agreement stipulates that employees transferred to Barona will be guaranteed the same rights and benefits as when they worked for Finnair. However, IAU announced that it is still sceptical, fearing for the workers’ job security.

Overtime ban and strikes in technology industry

In the technology industry, a dispute is continuing between the STTK-affiliated Union of Salaried Employees (Toimihenkilöunioni, TU) and the EK-affiliated Federation of Finnish Technology Industries (Teknologiateollisuus). The dispute arose over the coverage of the collective agreement and the division of duties between salaried personnel and higher management. TU objects to the wording of the compromise proposal presented by the national conciliator Mr Lonka. According to the trade union, the compromise proposal would have increased confusion over whom the collective agreement should be applied to.

As a result, the President of TU, Antti Rinne, confirmed that an overtime ban among 30,000 trade union members would continue. Furthermore, a week-long strike was held by 2,000 members, affecting operations at Nokia, ABB, Rautaruukki and STX Finland.

TU is planning further strike action to highlight contract demands, but has not yet announced details. According to Mr Rinne, it may be several weeks before any further strike action is taken, as the trade union first wants to see if the overtime ban influences talks. At the time of writing, negotiations between TU and the Federation of Finnish Technology had been suspended, with no date for resumption scheduled.

Strike at DNA mobile phone operator

TU also initiated a strike at all DNA mobile telephone operator facilities and subsidiaries. The strike resulted in the temporary closure of all of the company’s shops, although it did not affect customer service operations as these were outsourced.

TU insisted that the strike would continue until DNA signed a new personnel policy agreement. The term of the current agreement was due to conclude at the end of 2009, and TU claimed that the company was unwilling to sign a new one.

According to TU’s Chief Steward at DNA, Mika Oja, employees are most concerned about severance pay, the use of non-contract and temporary workers, along with outsourcing procedures. The trade union is pressing for job security guarantees for its members in cases of outsourcing or the sale of company operations.

TU estimates that about 1,000 members have been taking part in the strike. Some 500 of these are employed by DNA, 350 work in DNA shops and 150 in the company’s contact centre.

Confederation-level talks on framework for pay increases

In the course of sectoral-level collective bargaining, the main labour market confederations have also been holding negotiations on collective agreements on economic policy seeking to promote employment. The aim of the talks was to reach a common agreement on the framework for possible pay increases. Specific pay rises were to be decided in negotiations with individual trade unions and employer organisations, based on a framework agreed on by the central organisations. However, in mid-December, EK announced that is had broken off negotiations on a framework for pay increases in the new collective agreements after the confederation-level negotiations were made public.

The main employer confederation EK has therefore been involved in confederation-level pay increase negotiations, although the centralised bargaining model was renounced at its insistence (FI0806029I). The official reason for the unscheduled situation has been the recent ‘faltering of labour peace’. EK’s Director, Eeva-Liisa Inkeroinen, stated that ‘the boundary disputes and oversized salary requirements demanded by certain trade unions are inappropriate in the current economic situation that is the worst on record’.

Commentary

EK’s withdrawal from the confederation-level negotiations, which were taking place out of the public eye, shows that the main employer organisation has been in a difficult situation. On the one hand, EK has announced the end of the centralised tripartite bargaining structure. On the other hand, however, it has demanded pay coordination and a so-called ‘anchor model’ that would set an upper limit to pay increases during the ongoing bargaining round (FI0911019I).

Pertti Jokivuori, Statistics Finland