Finland: Representativeness of the European social partners – Personal services sector

  • Observatory: EurWORK
  • Topic:
  • Published on: 20 Styczeń 2010



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The aim of this representativeness study is to identify the respective national and supranational actors (i.e. trade unions and employer organisations) in the field of industrial relations in the personal services sector in Finland. In order to determine their relative importance in the sector’s industrial relations, this study will, in particular, focus on their representational quality as well as on their role in collective bargaining.

Introduction

The personal services sector in Finland is self-employed-led. In 2006, the number of small companies and firms was 10,840. The aggregate employment was 14,269 including a total number of 2,688 employees. The only trade union in the secor is the Service Union United PAM (Palvelualojen Ammattiliitto PAM) that has a collective agreement with Suomen Hiusyrittäjät ry, the only employer organisation in the sector. The other sectoral association is Suomen Kosmetologien Yhdistys.

1. Sectoral properties

  1995 2006**
Number of employers (companies and firms) 7,368 10,840
Aggregate employment* 12,615 14,269
Male employment* 481 581
Female employment* 12,134 13,688
Aggregate employees 2,077 2,688
Male employees 97 142
Female employees 1,980 2,546
Aggregate sectoral employment as a % of total employment in the economy 0.7% 0.6%
Aggregate sectoral employees as a % of the total number of employees in the economy 0.1% 0.1%

* employees plus self-employed persons and agency workers

** or most recent data

2. The sector’s trade unions and employer associations

This section includes the following trade unions and employer associations:

1. trade unions which are party to sector-related collective bargaining (In line with the conceptual remarks outlined in the accompanying briefing note, we understand sector-related collective bargaining as any kind of collective bargaining within the sector, i.e. single-employer bargaining as well as multi-employer bargaining. For the definition of single- and multi-employer bargaining, see 4.2)

2. trade unions which are a member of the sector-related European Union Federation (i.e. UNI-EUROPA – Hair and Beauty)

3. employer associations which are a party to sector-related collective bargaining

4. employer associations (business associations) which are a member of the sector-related European Business Federation (i.e. COIFFURE EU)

2a Data on the trade unions

The Service Union United PAM (Palvelualojen Ammattiliitto PAM)

2a.1 Type of membership (voluntary vs. compulsory)

Voluntary

2a.2 Formal demarcation of membership domain (e.g. white-collar workers, private-sector workers, personal services employees, etc.)

-

2a.3 Number of union members (i.e. the total number of members of the union as a whole)

211,305

2a.4 Number of union members in the sector

2,400

2a.5 Female union members as a percentage of total union membership

80%

2a.6 Domain density: total number of members of the union in relation to the number of potential members as demarcated by the union domain (see 2a.2)

67%

2a.7 Sectoral density: total number of members of the union in the sector in relation to the number of employees in the sector, as demarcated by the NACE definition2a.8 Sectoral domain density: total number of members of the union in the sector in relation to the number of employees which work in that part of the sector as covered by the union domain

89%

2a.9 Does the union conclude collective agreements?

Yes.

2a.10 For each association, list their affiliation to higher-level national, European and international interest associations (including cross-sectoral associations)

PAM is a memebr of UNI-EUROPA Hair and Beauty; EFFAT (European Federation of Food, Agriculture and Tourism Trade Unions) and IUF (International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers´Association)

2b Data on the employer associations

  • Suomen Hiusyrittäjät ry (SHr)
  • Suomen Kosmetologien Yhdistys (SKY)

2b.1 Type of membership (voluntary vs. compulsory)

  • SHr: Voluntary
  • SKY: Voluntary

2b.2 Formal demarcation of membership domain (e.g. SMEs, small-scale crafts/industry, personal services enterprises, etc.)

  • Suomen Hiusyrittäjät ry is an association for entrepreneurs and self-employed hairdressers.
  • Suomen Kosmetologien Yhdistys in an association whose members are cosmeticians, beauty treatment students, employees in the cosmetician field and importers of cosmetics.

2b.3 Number of member companies (i.e. the total number of members of the association as a whole)

  • SHr: 1,400
  • SKY: 1,100 enterprisers. The total number of members is 3,200 including cosmeticians, beauty treatment students, and employees in the cosmetician field and importers of cosmetics.

2b.4 Number of member companies in the sector

As above.

2b.5 Number of employees working in member companies (i.e. the total number of the association as a whole)

  • SHr: 2,300
  • SKY: 200

2b.6 Number of employees working in member companies in the sector

  • SHr: 2,300
  • SKY: 200

2b.7 Domain density in terms of companies: total number of member companies of the association in relation to the number of potential member companies as demarcated by the association’s domain (see 2b.2)

  • SHr: 15%. Self-employed hairdressers often are not organised. A total number of 800 self-employed hairdressers are members. The density amongst those who have employees is 75% (about 600 of 750 employing companies are members of).
  • SKY: About 70%

2b.8 Sectoral density in terms of companies: total number of member companies of the association in the sector in relation to the number of companies in the sector, as demarcated by the NACE definition

  • SHr: 13%
  • SKY: 10%

2b.9 Sectoral domain density in terms of companies: total number of member companies of the association in the sector in relation to the number of companies which operate in that part of the sector as covered by the association’s domain

2b.10 Domain density in terms of employees represented: total number of employees working in the association’s member companies in relation to the number of employees working in potential member companies, as demarcated by the association’s domain (see 2b.2)

-

2b.11 Sectoral density in terms of employees represented: total number of employees working in the association’s member companies in the sector in relation to the number of employees in the sector, as demarcated by the NACE definition

  • SHr: 86%
  • SKY: 7%

2b.12 Sectoral domain density in terms of employees represented: total number of employees working in the association’s member companies in the sector in relation to the number of employees working in companies which operate in that part of the sector as covered by the association’s domain

As above.

2b.13 Does the employer association conclude collective agreements?

  • SHr: Yes
  • SKY: No

2b.14 For each association, list their affiliation to higher-level national, European and international interest associations (including the cross-sectoral associations).

  • Suomen Hiusyrittäjät is a member in the Federation of Finnish Enterprises (Suomen Yrittäjät, SY); COIFFURE EU and OMC (Organisation Mondiale Coiffure)
  • Suomen Kosmetologien Yhdistys has not any higher-level memberships.

3. Inter-associational relationships

3.1. Please list all trade unions covered by this study whose domains overlap.

The Service Union United PAM (Palvelualojen Ammattiliitto PAM)

3.2. Do rivalries and competition exist among the trade unions, concerning the right to conclude collective agreements and to be consulted in public policy formulation and implementation?

No, there is only one union in this sector.

3.3. If yes, are certain trade unions excluded from these rights?3.4. Same question for employer associations as 3.1.

Suomen Hiusyrittäjät ry

Suomen Kosmetologien Yhdistys

3.5. Same question for employer associations as 3.2.

Suomen Hiusyrittäjät is an hairdressers’ association and Suomen Kosmetologien Yhdistys is for cosmeticians. Suomen Kosmetologien Yhdistys does not have a collective agreement. The employees in the beauty treatment field are covered by the coleective agreement concluded with PAM and Suomen Hiusyrittäjät, and employees working in beauty salons are covered by PAM’s collective agreement.

3.6. Same question for employer associations as 3.3.

-

3.7. Are there large companies or employer associations which refuse to recognise the trade unions and refuse to enter collective bargaining?-

4. The system of collective bargaining

4.1. Estimate the sector’s rate of collective bargaining coverage (i.e. the ratio of the number of employees covered by any kind of collective agreement to the total number of employees in the sector).

The rate of collective bargaining coverage is 100%.

4.2. Estimate the relative importance of multi-employer agreements and of single-employer agreements as a percentage of the total number of employees covered. (Multi-employer bargaining is defined as being conducted by an employer association on behalf of the employer side. In the case of single-employer bargaining, it is the company or its subunit(s) which is the party to the agreement. This includes the cases where two or more companies jointly negotiate an agreement.)

The rate of multi-employer and single-employer agreements coverage is 100%.

4.2.1. Is there a practice of extending multi-employer agreements to employers who are not affiliated to the signatory employer associations?

The collective agreements have a generally/universally binding nature. Since 1971, there has been a principle of general applicability of collective agreements in effect in Finland. Consequently, unorganised employers also have to comply with the national agreements that concern the line of business they are in. The generally binding character of a collective agreement depends on various factors, especially the organising rate of employers and employees in the line of business concerned. A public authority (Commission) formally decides whether collective agreements are generally binding. The decision of this Commission may be appealed at the Labour Court, the decision of which is final. The decision regarding the general validity will be published in the Regulations Collection maintained by the authorities, and agreements confirmed as generally binding are available free of charge on Internet in a list of generally binding collective agreements. In 2001, the so-called confirmation procedure of universally binding collective agreements was introduced, in which a special commission confirms the general applicability. An agreement is generally applicable, if it can be considered representative of the field in question. The criteria for representativeness are evaluated based on statistics that measure the general applicability of collective agreements, the established practices of agreements in the field, and the organisation level of the negotiating parties. The aim of the system of general applicability to guarantee minimum conditions is also taken into consideration.

4.2.2. If there is a practice of extending collective agreements, is this practice pervasive or rather limited and exceptional?

The employer who is bound to the collective agreement, based on membership of the employer association or as a party to the collective agreement, , is, pursuant to the Collective Agreements Act, obliged to comply with the agreement as the employees’ minimum terms of employment. (According to section 1 of the Collectuve Agreement Act, a party to the collective agreement can be one or more employers or registered employer association and, on the employee side, a registered employee association.) This covers approximately three-quarters of the Finnish labour market.

According to an explicit provision included in the Employment Contracts Act, the collective agreement drawn up pursuant to the Collective Agreements Act takes precedence at all times when one of the contracting parties to the collective agreement is a national trade union. Thus, a collective agreement signed by a single employer with a national trade union always takes precedence over other contracts.

4.3. List all sector-related multi-employer wage agreements* valid in 2006 (or most recent data), including for each agreement information on the signatory parties and the purview of the agreement in terms of branches, types of employees and territory covered.

* Only wage agreements which are (re)negotiated on a reiterated basis.

Sector-related multi employer wage agreements
Bargaining parties Purview of the sector-related multi-employer wage agreements
  Sectoral Type of employees Territorial
Suomen Hiusyrittäjät ry and the Service Union United PAM Collective agreement of the hairdresser 1.6.2008 – 31.10.2010 Hairdressers Generally binding, national

4.4. List the sector’s four most important collective agreements (single-employer or multi-employer agreements) valid in 2006 (or most recent data), including for each agreement information on the signatory parties and the purview of the agreement in terms of branches, types of employees and territory covered. Importance is measured in terms of employees covered.

Four most important agreements in terms of employees covered
Bargaining parties Purview of the agreements
  Sectoral Type of employees Territorial
Suomen Hiusyrittäjät ry and the Service Union United PAM Collective agreement of the hairdresser 1.6.2008 – 31.10.2010 Hairdressers Generally binding, national

5. Formulation and implementation of sector-specific public policies

5.1. Are the sector’s employer associations and trade unions usually consulted by the authorities in sector-specific matters? If yes, which associations?

Suomen Hiusyrittäjät ry and Service Union United PAM

5.2. Do tripartite bodies dealing with sector-specific issues exist? If yes, please indicate their domain of activity (for instance, health and safety, equal opportunities, labour market, social security and pensions etc.), their origin (agreement/statutory) and the interest organisations having representatives in them:

Sector-specific public policies*
Name of the body and scope of activity Bipartite/tripartite Origin: agreement/statutory Trade unions having representatives (reps) Employer associations having reps.
The reform balancing out the costs arising from the traditionally high concentration of parental leave schemes, mainly in the female-dominated services sector Bipartite Agreement Service Union United PAM Suomen Hiusyrittäjät ry
The VAT-discount experimentation Bipartite Agreement Service Union United PAM Suomen Hiusyrittäjät ry
Elimination of grey economy Bipartite Agreement Service Union United PAM Suomen Hiusyrittäjät ry
Cooperation of education (accountable to the Finnish National Board of Education) Tripartite Agreement Service Union United PAM Suomen Hiusyrittäjät ry Suomen Kosmetologien Yhdistys

* Sector-specific policies specifically target and affect the sector under consideration.

6. Statutory regulations of representativeness

6.1. In the case of the trade unions, do statutory regulations exist which establish criteria of representativeness which a union must meet, so as to be entitled to conclude collective agreements? If yes, please briefly illustrate these rules and list the organisations which meet them.

In Finland, the central principles of collective bargaining have been recorded in the Collective Agreements Act: ‘The employer party may be one or more employers or a registered association of employers. The employee party must be a registered employee association. The term employer association refers to an association whose main purpose is to look after the employers’ interests in employment relationships. The term employee association, on the other hand, refers to an association whose main purpose is to look after the employees’ interests in employment relationships.’

6.2. In the case of the trade unions, do statutory regulations exist which establish criteria of representativeness which a union must meet, so as to be entitled to be consulted in matters of public policy and to participate in tripartite bodies? If yes, please briefly illustrate these rules and list the organisations which meet them.

There are no statutory regulations.

6.3. Are elections for a certain representational body (e.g. works councils) established as criteria for trade union representativeness? If yes, please report the most recent electoral outcome for the sector.

No.

6.4. Same question for employer associations as 6.1.

See the answer to 6.1.

6.5. Same question for employer associations as 6.2.

There are no statutory regulations.

6.6. Are elections for a certain representational body established as criteria for the representativeness of employer associations? If yes, please report the most recent outcome for the sector.

No.

7. Commentary

Please give your views on the issue of representativeness in the sector, especially on jurisdictional disputes and recognition problems, and indicate any specificities or other problems which refer to representativeness in this sector in your country.In recent years sectoral activities have been subject to subcontracting and outsourcing. The workload has been divided between employees and independent contractors. The difference between an employer and an independent contractor isn’t always clear. There is evidence of a reduction in the workforce and an increasing use of subcontractors.

Pertti Jokivuori, Statistics Finland, University of Jyväskylä

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