Social partners sign ‘historic’ tripartite framework agreement

Finnish social partners reached agreement in October on a framework accord on pay and conditions that will ensure competitiveness and safeguard employment. In late November the partners concluded that support for the framework agreement was broad enough for it to take effect. The accord covers about 94% of the workforce, or around two million employees. Social partnershave characterised the comprehensive national framework settlement as a historic achievement.

Background

A tripartite framework of a new centralised national agreement on wages and conditions was worked out between social partners in Finland in October 2011. The agreement lasts for 25 months, offering a pay increase of 4.3 % over the period. Furthermore, a lump sum payment of €150 at the beginning of 2012 is also included.

The government promised a number of measures to back up the accord, including easier terms for corporate taxation and compensation for employees who are temporarily laid off. A deadline was set for 24 November for sectoral negotiations on the basis of the framework.

The objective of the central labour market organisations while negotiating the agreementwas to continue their good cooperation with the government on themes that could contribute to economic growth, productivity and employment in Finland. They also wanted to secure the competitiveness of Finnish companies in global markets and strengthen the economic base of Finland’s welfare system.

Broad enough coverage

The majority of trade unions and employer organisations accepted the framework for a newcentralised national agreement on wages and conditions,agreed by the social partners in the autumn, and signed on 28 November.

The 25-month framework accord on pay will cover about 94% or around 2 million employees. The whole public sector has agreed on a new deal on pay and conditions, and the private sector coverage is a little under 90%.Construction and food workers and a third of senior salaried employees remain outside the framework agreement.

The original deadline for trade unions and employer organisations to accept the framework was postponed for a couple of days because of difficult negotiations in the transport and port sector.However the social partners in this sector decided the agreement’s coverage was broad enough and they signed it on 28 November.

Social partners say agreement is historic

‘The framework is sufficiently comprehensive,’said the Managing Director of the Confederation of Finnish Industries (EK), MikkoPulkkinen.He notes that this is the first time in the history of Finnish labour market policy that a solution has been reached that covers industry, services, and the public sector, as well as the whole chain of transport.

EK emphasised that the comprehensive framework agreement prevents wage competition and guarantees corporate competitiveness, and so creates stability and predictability.

According toPresident of the Central Organisation of Finnish Trade Unions (SAK), Lauri Lyly, the framework contract is more extensive than any other national centralised accord in Finnish history. Mr Lyly described the framework agreement as historic and as a victory for labour and employees in Finland. He also emphasised that the comprehensive agreement involving central organisations makes it easier to agree on developing working life than agreements at individual union level.

Prime Minister JyrkiKatainen welcomed the agreement, telling a press conferencethat it adds stability and predictability and reduces risks.He said:

There are a limited number of things that Finland can affect on its own. A pay contract supporting industrial peace and competitiveness, purchasing power and employment is in our hands. Now we have reached the goal. There is reason to be very satisfied.

The prime minister gave special thanks to Labour Minister LauriIhalainen (former President of SAK) for hisefforts in facilitating the agreement.

The government has agreed to complete its side of the bargain, which will involve a 0.5 percentcut in corporation tax and a cancellation of plans to change entitlements to paid sabbatical leave. The right to paternity leave will also be extended by two weeks. Details of a guarantee of at least three days of paid work-related training for employees each year remain to be worked out. Parliament will start processing the government proposal for measures which bears a price tag of €401 million.

PerttiJokivuori, University of Jyväskylä