Finland: Latest working life developments – Q2 2017

New measures to help the unemployed find work and greater support for working families against a backdrop of governmental crisis, and the merger of industrial trade unions are the main topics of interest in this article. This country update reports on the latest developments in working life in Finland in the second quarter of 2017.

Government agrees on employment measures

In April, the Government of Prime Minister Juha Sipilä decided in its mid-term review session on a number of employment policy measures. These include:

  • relating unemployment benefit more directly to the efforts of the unemployed to find work
  • increased support for long-distance commuters
  • legislation regulating zero-hour contracts (including the right to sickness and unemployment benefit)
  • measures to facilitate entrepreneurship and self-employment (including a law on personal bankruptcy)
  • improved sickness and unemployment security, and recruitment support to micro entrepreneurs
  • lowering fees of children’s day-care for low and middle-income families.

The most debated reform is the proposal that the unemployed should be obliged to apply for a minimum of 12 jobs within a period of three months or face losing their unemployment benefit. Opposition parties, trade unions, and some employer organisations say this will lead the unemployed to flood employers with random and haphazard applications, thus causing fewer employers to publicly announce vacancies.

The social partners were also disappointed by the government’s failure to agree on a reform of types of family leave. All the social partners and most political parties support legislation ensuring a more even distribution of types of family leave between parents. However, preserving the families’ freedom of choice regarding childcare was a key question for the government’s junior partner, the populist Finns Party. Policy reforms are being prepared against the backdrop of the brief, despite an intense government crisis in mid-June triggered by the change of chair and vice-chairs in the Finns Party.

All four newly elected leaders are controversial, with two having been convicted for hate speech. The coalition government partners, the Centre Party of PM Sipilä and the centre-right National Coalition Party said it was impossible to continue governing with the new leadership, and the Government almost resigned. However, the Finns Party subsequently split into two factions and the runaway members who opposed the new party leadership were welcomed back to government. This provided the government with a relatively narrow, and potentially shaky, majority of 105 out of 200 members of parliament.

Major trade unions merge as an employer organisation loses a member

The merger of three industrial trade unions, the Finnish Metalworkers’ Union (Metalli), Industrial Union (TEAM) and the Woodworkers’ Union (Puuliitto) was signed in mid-May. The merger has been implemented by Metalli changing its name to the Finnish Industrial Union (Teollisuusliitto) with immediate effect, and TEAM and Puuliitto disbanding and merging in the new union at the end of 2017. The chair of Metalli, Riku Aalto, was elected chair of the new union. Teollisuusliitto will have a total of 226,000 members and will represent some 75% of all export industry employees. Other industrial unions will still be welcome to join, including the Paper Workers’ Union, which withdrew from the merger in December 2016. Teollisuusliitto said it was looking forward to negotiating wage rises in the sectoral collective bargaining round in autumn 2017. However, employer organisations and the Minister of Finance, Petteri Orpo, criticised this idea, because of the country’s slow economic improvement.

On the employer side, the Employers’ Federation of Road Transport (ALT) decided in late April to quit its peak-level organisation the Confederation of Finnish Industries (EK) in January 2018. ALT states that since EK no longer participates in collective bargaining, membership does not benefit ALT, which manages its own interest advocacy. ALT has approximately 700 member companies with 24,000 employees. After the secession, EK will have 24 member organisations representing 16,000 companies with 900,000 employees. In 2016, EK was deserted by another member organisation, the Finnish Forest Industries Federation (Metsäteollisuus), which claimed to want better targeted interest promotion.

Commentary

Important developments are expected in autumn 2017. Most sectoral collective agreements will expire in late 2017 to early 2018, and the negotiations for new agreements may turn out to be difficult due to tense relations between social partners. At the same time, the weakened government will try to push through reforms, not only on employment policy, but the major health, social services and regional government reform, which was rejected in June by the parliamentary Constitutional Law Committee. The rejected model, obliging regional governments to corporatise social and health services, was considered to be unable to guarantee equal access to social care and healthcare for all citizens.

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