Finland’s largest union begins operations

A merger process involving six public sector trade unions affiliated to the SAK confederation came to a close in January 2006 when the new Trade Union for the Public and Welfare Sectors (JHL) became fully functional. JHL is now Finland's largest union, with over 230,000 members. Its foundation was largely a reaction to the outsourcing of public sector jobs to the private sector. JHL represents workers in both these sectors and hopes that this will help it control the privatisation process.

Six public sector trade unions that affiliated to the Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK) began a merger process in spring 2003 (FI0402201N), On 22-23 November 2005, officials of the six unions held an inaugural meeting of the council of the new merged organisation, the Trade Union for the Public and Welfare Sectors (Julkisten ja hyvinvointialojen liitto, JHL), which formally took over the operations of the old unions at the beginning of January 2006. The merging unions were:

• the Trade Union for the Municipal Sector (Kunta-alan ammattiliitto, KTV);

• the Finnish National Union of State Employees and Special Services (Valtion ja erityispalvelujen ammattiliitto, VAL);

• the Organisation of State Employees (Valtion yhteisjärjestö, VTY);

• the Finnish Customs Officers' Union (Tulliliitto);

• the Finnish Prison Officers' Union (Vankilavirkailijoiden liitto); and

• the Coastguard Union (Merivartioliitto).

JHL brings together over 230,000 blue-collar and lower-level white-collar workers, which makes it the largest trade union in Finland. Some 71% of its members are women. The organisational coverage of JHL is roughly a quarter of Finland's employed labour force; it covers the entire municipal sector and the whole of the state sector except for railways, aviation and postal services. Within the private sector, it has members where public services have been contracted out, mainly in welfare services. Overall, JHL is a contracting party to over 100 collective agreements, over half of all the collective agreements in Finland.

Reaction to changes in provision of public services

At its inaugural meeting, the union council of JHL approved a strategy to guide the union’s policy in the coming years. In the strategy, the union sets out as one of its main goals seeking a stronger bargaining position in the private sector. According to Jari Vettenranta, a manager at JHL, this was the principal reason behind the merger itself. The contracting out of public operations, especially social and health services, has been an ongoing trend in Finland in recent years (FI0503202F) and JHL's strategy expects that this will continue in the coming years. Within the privatisation process, the new union aims, according to its official announcements, to achieve the same pay and working conditions for all workers who do the same work, whether they work in the private or in the public sector. In this way, JHL hopes also to eliminate any competitive advantages that private service providers may have over public sector employers as a result of offering worse employment conditions. Such a 'level playing field', JHL hopes, will help curb the flow of jobs to the private sector.

Fragmentation of public sector operations has not only spilled jobs over to the private sector but has also taken place within the public sector itself, between and within the state and the municipal sectors. The old trade union divides have thus become increasingly outdated and a merger was a sensible reaction to these changes, JHL says. According to Tuire Santamäki-Vuori, the chair of JHL, what makes the new union powerful is that it consolidates the power of unions within the demarcation lines set by public spending. The common denominator of all the members of JHL is that their wages derive from tax receipts, irrespective of whether they work at municipalities, state organs, companies or other private organisations. This dependence on taxes means, moreover, that being an active part of the public debate in which the conditions of state and municipal spending are determined is of crucial importance in JHL’s domain. A large union with consolidated power is in a better position to do so than smaller ones, Santamäki-Vuori argues.

Bargaining policy

In its strategy, JHL sets centralised incomes policy agreements as its main priority as regards collective bargaining. It believes that these deals, the latest of which was signed in December 2004 (FI0501203F), ensure the positive development of wages in the public sector and in the female-dominated sectors that predominate within JHL. Furthermore, the union's strategy states that workplace-level bargaining is expected to become ever more common for its membership and that the strength of its affiliated union branches and associations is thus also of great importance. JHL has as many as 850 such member organisations that operate at local, regional and national level. It also has 15 regional offices, which, according to Vettenranta, make JHL well positioned for the increasing decentralisation of bargaining.

In the state sector and at municipalities, an important part of workplace-level bargaining is negotiations over the requirements of each job and over the individual competence of workers within these positions. This is being done as part of a major reform of pay structures in the public sector, which is nearing completion in the state sector (FI0508203F) and mostly forthcoming in the municipalities. Through the reform, pay levels are increasingly made to reflect variations in productivity levels between workplaces and between individual employees. In these circumstances, JHL's strategy states that one of its main challenges is to highlight its members’ competences and job results and thus argue for public sector workers’ productivity.

Commentary

The foundation of JHL is a major step in the consolidation of union strength, which has been an ongoing trend since the early 1990s. Significant changes are currently taking place in the public sector in Finland and a strong single union is in a good position to affect these changes. Perhaps the single greatest issue facing JHL in the coming years will be the reform of the municipal structure that is currently being planned by the government. The aim of the reform is to increase the efficiency of public services; in addition to the combining of municipal services and to mergers of whole municipalities, privatisation is seen as one possible way of achieving cost-efficiency. If JHL chooses to rally against the latter, as did one of its predecessors, KTV, it is in a very strong position to do so. By mobilising its membership, it could effectively freeze not only much of the public sector but also the very parts of the private sector that exist as a result of privatisation. (Aleksi Kuusisto, Labour Institute for Economic Research)