Industrial relations

Finland: Latest developments in working life Q3 2019

The start of the autumn round of collective bargaining, a conflict in the postal sector and the government’s employment policy are the main topics of interest in this article. This country update reports on the latest developments in working life in Finland in the third quarter of 2019.

Sectoral collective bargaining round kicks off

A new round of collective bargaining started in Q3 2019, as most collective agreements are due for renewal this autumn and winter. The first sectoral agreements to be negotiated are between the Technology Industries of Finland and the Finnish Industrial Union, and these will cover more than 200,000 blue- and white-collar employees in the technology industry. [1]

The negotiation round is expected to be difficult. One of the main points of disagreement is the annual working time extension of 24 hours without additional compensation, which was included in the 2016 Competitiveness Pact as a way to improve Finnish cost competitiveness. This condition was hard for the employee side to accept. The working time extension entered into force in 2017 and has been implemented in most sectors, but in different ways. While it was ‘spread out’ in some collective agreements as additional daily or weekly working hours – for example, 6 additional minutes per day or 30 per week – in other sectors, the additional hours were used for the development of employees’ competences or workplace recreation. Given that the Finnish economy has recovered, and competitiveness has improved since 2016, unions now want the working time extension to be removed from collective agreements.

Employer organisations, in contrast, see the extra hours as crucial to further improve Finnish competitiveness. In August, the Research Institute of the Finnish Economy (ETLA) – a research organisation with funding from major employer organisations – published a report showing that the 24-hour working time extension, together with other measures in the Competitiveness Pact, has had a major impact on Finnish cost competitiveness and employment. [2] The authors estimate that the working time extension will have contributed to the creation of 8,000–16,000 new jobs by the end of 2022.

Trade unions remain sceptical about this conclusion. While most agree that the Competitiveness Pact has had some level of positive impact on the Finnish economy, organisations such as the Finnish Industrial Union and the peak-level Central Organisation of Finnish Trade Unions (SAK) say that the impact should not be overestimated or exaggerated, and that the Finnish economy cannot rely on unpaid work.[3] According to a survey conducted by SAK, 84% of the confederation’s member shop stewards think that the working time extension has had no impact on the hiring of new employees at their workplaces. [4]

Negotiations in the public sector are also likely to be difficult. The Union of Health and Social Care Professionals in Finland (Tehy) and The Finnish Union of Practical Nurses (SuPer) have demanded higher wage raises in the female-dominated social and healthcare sectors than in the export sector. This is seen as a crucial way to narrow the gender pay gap, and to address labour shortages in the sector. The trade unions also want the state to assist with this, as municipalities have limited options due to strained finances. [5] The employer organisation Local Government Employers (KT) has rejected this demand, saying that municipalities cannot afford such big wage increases. [6]

Postal workers strike over planned pay cuts

A conflict in the postal sector arose when the national mail company Posti announced that it plans to transfer some 700 employees working in sorting to a new collective agreement with lower labour costs. The change will enter into force on 1 November 2019 and effectively lead to wage cuts. [7]

Posti has restructured its organisation several times in recent years, due to a decline in the volume of mail, structural changes in the sector and economic strain. Several rounds of employer–employee negotiations have been initiated, leading to the dismissal of hundreds of employees in 2019. The decision to transfer workers to another collective agreement is part of the company’s aim to increase efficiency and reduce costs by €150–200 million over the next three years.

Finnish Post and Logistics Union (PAU) stated that it could not accept the decision as the transfer to a new collective agreement will entail pay cuts of 30–50% for the workers. According to Posti, the change will introduce bonuses for productivity, quality of work and customer satisfaction.

PAU called for a three-day strike in late August in protest against the plans. The strike began on 2 September, affecting mail delivery across the country. Posti claimed that the strike was illegal.

PAU called off the strike on 3 September, when Minister of Local Government and Ownership Steering Sirpa Paatero called for the collective agreement transfer plans to be put on hold. Negotiations between Service Sector Employers Palta and PAU began in mid-September, but the conflict remained unresolved at the end of Q3 and PAU has threatened more industrial action. [8]

Outlook

The government’s aim to reach a 75% employment rate by the end of 2023 has been one of the main subjects among public debate and social dialogue since the new government entered office in June. In mid-August, seven tripartite working groups were set up, covering themes such as public employment services, pay subsidies and other benefits, the employment of people with the ability to partially work, matching skills and labour market needs, labour migration and integration, and labour law and local collective bargaining. The groups are expected to present proposals on measures to achieve the employment goal. So far, very few concrete measures have been introduced by the government and as economic forecasts show that the economic growth rate is slowing down, several stakeholders have questioned how realistic the employment goal is.


Footnotes

  1. ^ HS (2019), Neuvottelut yli kahden miljoonan palkansaajan työehdoista ja palkoista alkoivat , 29 August.
  2. ^ ETLA (2019), Työaika, työllisyys ja kilpailukyky , 12 August.
  3. ^ MTV (2019), SAK ja Teollisuusliitto kritisoivat Etlan kiky-tutkimusta – ’Työajan palkattoman pidennyksen osuutta liioitellaan surutta’ , 12 August.
  4. ^ SAK (2019), Kiky-sopimuksen mukaisen työajan pidennyksen toteutuminen SAK:laisilla työpaikoilla , 9 September.
  5. ^ Tehy (2019), SuPer ja Tehy: Yhteiskunnalla ei ole varaa olla nostamatta hoitoalan palkkoja , 3 September.
  6. ^ HS (2019), Kuntatyönantajat: Hoitajien palkkavaatimuksista tulisi miljardien lisälasku kunnille , 3 September.
  7. ^ Posti (2019), Posti is rearranging its operations in parcel sorting – the changes will respond to changing customer needs , 29 August.
  8. ^ PAU (2019), Työehtosopimusneuvottelut jatkuivat tänään , 26 September.

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