Negotiations on retirement age equality postponed

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Government plans to amend Finnish legislation to bring it into line with EU equality law have recently proved controversial with the Finnish Confederation of Salaried Employees (STTK). Following negotiations, further discussion of the issue has been postponed to autumn 1997.

The Ministry of Social Affairs and Health recently announced its intention to amend the 1987 Act on Equality between Women and Men to bring Finnish legislation into line with the numerous rulings by the European Court of Justice (ECJ) on equal treatment in occupational social security schemes and the subsequent amendment of the Directive on this issue.

On 17 May 1990, the ECJ ruled in the case of Barber v. GRE that pensions were part of pay and that any inequality in retirement ages between the sexes would amount to sex discrimination. This point was confirmed and clarified by subsequent rulings, and the 1986 Directive (86/378/EEC) on equal treatment for men and women in social security schemes was amended accordingly in 1996.

Different pension arrangements for men and women were permitted in Finland until the 1987 equality Act made such a practice illegal for new employees. Under the previously-existing schemes, it is common for women to have the opportunity to retire earlier than men. When Finland acceded to the European Economic Area and subsequently to the European Union, its equality legislation was out of line with the Barber judgment and thus EU law. However, the Ministry of Social Affairs and Health's proposed amendment of the 1987 Act would have had an adverse effect on the pension entitlements of many employees -mostly women - whose pension arrangements had been made before 1987. Their pensions would have been postponed, in some cases for years. STTK resisted the amendment by threatening strike action, which would have involved between 60,000 and 70,000 union members, unless the proposed amendment was withdrawn. Following this threat, the Ministry agreed to reword the amendment to accommodate some of the concerns of the trade unions.

The social partners, however, then agreed on a joint proposal for the amendment of the legislation. This would entitle most of the employees covered by occupational social security schemes with different retirement ages for men and women to choose between the two ages. The threatened strike was called off by STTK on 17 April 1997, following this agreement. Negotiations then continued between the Ministry and the social partners, with the result being that no proposal will be put before parliament at this stage. Further negotiations will be held in autumn 1997. This dispute can be seen as a reminder of the possible contradictions between Finnish and EU employment legislation, which may lead to serious conflicts in the labour market.