Unions hold day of action against redundancies

On 12 December 2003, Finland's three trade union confederations - SAK, STTK and AKAVA - organised a joint day of action to express their concerns about the large-scale redundancies that have recently taken place in Finnish companies. The action included 15-minute work stoppages, street events and the collection of signatures on an appeal to the government and employers.

The large number of collective redundancies announced during 2003 (FI0311203T) have raised worries and anger among Finnish employees. The reasons behind the job losses vary. During the past few years of slow economic growth, firms avoided workforce reductions and some 'labour hoarding' took place while firms were waiting for the economic recovery. However, as economic growth has remained slower than expected, it has finally led to redundancies and lay-offs. Economic globalisation and the so-called 'China phenomenon' have also led to reductions of production and staff in Finland, with firms moving production abroad to countries where costs are lower (FI0311202F).

The trade unions admit that globalisation is a process which cannot be stopped, but they call for greater social responsibility by firms. There are also concerns, especially among the unions, that some firms use staff cuts to signal increasing efficiency to investors, with the final aim being a rise in the company's share value. There is thus some disagreement among the social partners about the real necessity for the recent job losses. The announcement by the telecommunications operating company Elisa in October 2003 that it was to cut 900 jobs (FI0311201N) was the 'last straw', which drew much criticism and started a process which led to a joint trade union day of action in December (see below). The redundancies themselves have not been the only problem, with the unions also criticising the way in which they have been announced and implemented. The unions demand improvements in workplace negotiation practices, better information for staff in the early stage of restructuring and workforce reductions, and alternatives to redundancies and lay-offs. These alternatives could include retraining, transfers within companies etc.

The Act on Cooperation within Undertakings lays down strict rules for the information process and negotiations between employers and employees when staff cuts are planned (FI0311203T) as well as in many other situations. However, it is widely thought that the law has not been working as planned and it has been criticised by both social partners. Trade unions feel that it has been used only as a law on dismissals, and that no real cooperation has emerged. They would like to have more to say in company decisions, whereas the firms feel that such questions are strategic business issues and are solely the company management's prerogative. Firms feel that it is impossible to involve staff in strategic decision-making in the modern world, where situations change fast and market reactions are strong. Even the information process required by the legislation is seen as too time-consuming and bureaucratic.

New type of protest

The initiative for a day of action in protest against the recent wave of redundancies came from the Finnish Confederation of Salaried Employees (Toimihenkilökeskusjärjestö, STTK), with the Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK) and the Confederation of Unions for Academic Professionals (AKAVA) soon deciding to join it. As one of the aims was to achieve a better negotiation culture at workplaces, 'soft' measures were preferred to a full strike. In practice, the day of action on 12 December involved street events, discussions between workplace union representatives and employers, 15-minute work stoppages, and the collection of signatures to an appeal that was later given to the employers and the minister of finance. Many offices, banks and, for example, the Alko liquor stores were closed during the protests for security reasons. A so-called 'Japanese strike'- ie a silent demonstration - was used by some healthcare staff. They wore a question mark in their clothes, but continued working. There were even walk-outs for the rest of the day following stoppages in some metalworking industry companies. It was estimated that hundreds of thousands of people participated in the various actions, making this the largest trade union demonstration since the early 1990s.

Employers’ views

The employers saw the work stoppages and walk-outs as illegal strikes. They also criticise the trade unions for resisting labour market reforms. Wage rigidity especially is seen as one reason for Finland's current problems. Employers also criticised the government for not doing enough to lower taxation, which leads firms to search for cheaper production environments. They also noted that, despite the recent redundancies, the unemployment rate has not risen, which means that new jobs have been created.

Effects on industrial relations

It seems that the day of action is likely to bring about (or to speed up) some reforms in labour legislation. The problems with the Law on Cooperation within Undertakings (FI0309203T) have already been recognised for some years, as the legislation has been criticised by both the employers and the unions. A working group - known as the 'Wallin group' after its chair, Markku Wallin of the Ministry of Labour - is preparing changes to the law and will make its final proposal in mid-February 2004. A tripartite committee has also started work on the reform, which is the largest labour legislation project of the current government's term of office.

The redundancies and the day of action have clearly worsened relations between the social partners at least temporarily. The next collective wage bargaining round will take place in a year's time, and recent developments might make it more difficult to reach a centralised wage agreement when the current two-year deal expires (FI0212103F). Among employees, the day of action was praised as a modern way of expressing workers’ opinions, but also criticised for being too soft, and there were some calls for full strikes instead.

The aim of the action was to raise discussion in public and at workplaces on the issue of redundancies and on the communication and bargaining practices between employees and employers, especially at firm level. The protests received much publicity and prompted discussion in the media. In that sense, they achieved their aim. The effect on firm-level practices and on the dialogue between corporate managers and employees will be seen only in the longer terms.

Commentary

Globalisation may have affected the Finnish economy even faster and more strongly than was estimated just 10 years ago. It has turned out that capital is much more mobile than labour, which has given firms an 'exit alternative' and a new kind of negotiating power. It is also more complicated than before to define the negotiation partners, as many firms are owned by international investors. Industrial relations seem to be undergoing a process where new practices are gradually under consideration. (Seija Parviainen, Labour Institute for Economic Research)

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