Employers’ confederations agree merger

In February 2004, the boards of the Confederation of Finnish Industry and Employers (TT) and the Employers’ Confederation of Service Industries (PT) agreed on a merger to create a new central employers' organisation, Finnish Industries (EK). EK will become operational in autumn 2004 and will represent at least 15,000 companies that together account for over 70% of Finland’s GNP.

Finland’s two main employers’ organisations, the Confederation of Finnish Industry and Employers (Teollisuuden ja Työnantajain Keskusliitto, TT) and the Employers’ Confederation of Service Industries (Palvelutyönantajat, PT), announced in September 2003 that they were looking seriously at the possibility of merging (FI0310201N). On 12 February 2004, the boards of the two organisations gave their final approval to the project. Consequently, a new central organisation, known as Finnish Industries (Elinkeinoelämän keskusliitto, EK), will replace the two organisations. The founding charter of EK is to be signed in spring 2004 after the member associations of TT and PT have declared their positions concerning the new organisation. The activities of EK will begin formally on 1 January 2005, but in practice it will already be functional in autumn 2004, in time for the prospective incomes policy negotiations as the expiry of the current 2003-4 central agreement nears (FI0212103F).

According to representatives of TT and PT, the Finnish business community needs to cooperate more closely in order to safeguard its interests effectively. EK will indeed unify a large number of Finnish companies, some 15,000 in all. Although this represents only about 7% of the total number of companies in the country, out of the firms with at least 50 employees 87% will be represented by the new central organisation. Moreover, member companies of EK will account for over 70% of Finnish GNP and for more than 95% of the country’s exports. The coverage of EK will become even more comprehensive with the expected inclusion of the Federation of Finnish Commerce and Trade (Kaupan Keskusliitto, KKL), the Federation of Finnish Insurance Companies (Suomen Vakuutusyhtiöiden Keskusliitto, SVK) and the Finnish Bankers’ Association (Suomen Pankkiyhdistys), none of which is a member of TT or PT.

The organisational structure of EK has not yet been established but, as stated in a joint press release by TT and PT, certain guidelines have been drawn up. First, the presidium will consist of the chair and three vice-chairs. Second, as a general rule, each member association will have at least one seat on the board. Third, the executive committee is to be as representative of the structure of the organisation as possible. The construction of the new central organisation will take place in the course of a transitional period of two years (ie until the end of 2006). During this period, the seats on both the board and the executive committee will be divided among TT and PT member associations so that two-thirds will go to the former and one-third to the latter. A new organisational structure is expected to result in savings of about 25% by the end of 2007. A managing director for EK is to be appointed in spring 2004.

Consolidation has been an ongoing trend in Finland in recent years, not only among employers’ organisations but also among trade unions (FI0204102N, FI0106189N, FI0101172N and FI0402201N). According to Lauri Ihalainen, the president of the Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK), this process is likely to continue. Commenting in the Kauppalehti newspaper on the merger of PT and TT, he expressed the view that mergers among the trade union confederations are desirable and may take place in the long term.

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