Local bargaining on flexible hours increasing

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Local agreements on working time are on the increase in Finland, as market forces put severe pressure on the social partners to decentralise the negotiation mechanism. This article reviews the situation in early 1998.

Drastic changes in the Finnish economy have forced the social partners to find new approaches in order to meet market needs, and working time arrangements are one of the central issues in achieving flexibility in production. In recent times, the social partners have started to conclude local agreements on various issues (FI9708127N), a mechanism which makes it to a large extent possible to agree on working time arrangements "tailored" to individual workplaces. Two examples of such local agreements on working time are provided by Fujitsu ICL Computers and GWS Plast

Production at the Fujitsu ICL Computers factory needs to adapt flexibly to the sudden and unexpected variations of computer markets. According to the local agreement on working time flexibility, it is possible to vary daily and weekly working time during a reference period. Weekly production can be increased by 25% when needed, by moving to 10-hour working days and/or by working on Saturdays. It is also possible to switch to shorter weekly hours, when the employees work only three days a week. Furthermore, Fujitsu uses temporary workers in order to meet production peaks. The reference period during which working hours must be within the maximum working time quota is six months. The Fujitsu local working time agreements are in force until further notice.

GWS Plast is a company producing plastic packaging for the food, drink and oil industries. Under a local agreement one part of the workforce works periodically only at weekends. The employees receive from two 12-hour weekend shifts the same pay as their colleagues who work on normal shifts.

Social partner views

Flexible working time is seen not not only an employers' objective but as having benefits for employees. The deputy general manager of the Confederation of Finnish Industry and Employers (Teollisuuden ja Työnantajain Keskusliitto, TT), Tapani Kahri, justifies the change to more local bargaining by stating that new solutions have increased production and improved competitiveness. Small and medium-sized enterprises (SME s) which function as subcontractors or in the service sector especially need flexibility, says the director of the Federation of Finnish Enterprises (Suomen Yrittäjät, SY), Kimmo Kemppainen, and Finnish entrepreneurs are of the view that parties who are not familiar with company life should not interfere through regulations from outside.

Matti Kopperi, vice head of department at the Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK) also welcomes flexibility when the starting point is meeting of the personnel needs and if collective agreements are followed. Heli Ahokas-Kelotie, a lawyer at the Finnish Confederation of Salaried Employees (Toimihenkilökeskusjärjestö, STTK) does not see any problems with local agreements as long as the schemes suit both parties (quoted in the Taloussanomat newspaper, 25 February 1998).

On the other hand, a survey of shop stewards conducted in 1997 by SAK showed that the majority of those interviewed were sceptical about local agreements, because they had experienced attempts by employers to make practices at the workplace more disadvantageous to the workers. The situation is most problematic in small service companies (eg small restaurants or cleaning companies), where shop stewards feel that they have been left on the sidelines. The negotiating climate is best in large-scale industry, which has a long tradition of agreements and a strong labour movement culture.

Local agreements

Even though the Finnish bargaining system is heavily centralised, it is entirely possible to agree on flexible working time arrangements under the present regulations, though these contractual opportunities have not been fully used so far. The majority of local agreements which have been concluded concern working time and pay. The problem in many cases is that employer and employee needs are not compatible.

At the beginning of the 1990s, regulations making local agreements possible became part of some sectoral collective agreements - the metalworking industry especially favours this option. The food industry, however, has been unwilling to accept the development, while in the paper industry, local agreements can be concluded but not without the Paperworkers' Union's (Suomen Paperiliitto) control. Even companies which do not belong to employers' associations have the right to use local arrangements, providing that the sectoral collective agreements covering the branches in which they operate are generally valid (ie binding on all employers) across the sector. The current Working Hours Act (which came into force in 1996), has widened the possibility of agreeing locally on working time to cover companies in branches covered by such agreements with general validity. However, in the service sector, there are several companies that are not covered by generally valid collective agreements, and these companies are problematic for the labour movement.


Local agreements on working time are becoming more widespread. This development will not necessarily proceed without problems. Market forces require flexibility, especially in businesses where fluctuations in demand can be very steep. As liberalisation proceeds, there is a threat that it will lead to undesired developments that may cause tension in industrial relations. This kind of development may occur in the branches where high qualification criteria for the workforce are not essential. Controlling agreements at workplaces is problematic, particularly in the smallest enterprises. As a result of the difficult employment situation, some employees may find themselves "skating on thin ice". (Juha Hietanen, Ministry of Labour)

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