Social partners in labour market talks

The Confederation of Finnish Industries has said it is willing to start negotiations for a centralised national accord in the labour market. It says, however, that the economic situation is so bad that workers should be willing to accept a two-year pay freeze. Trade unions have welcomed EK’s proposal for an accord, but rejected the pay freeze proposals. After exploratory talks, the boards of three trade union confederations say they are willing to continue negotiations.

Employers’ negotiation offer

Finland’s leading business organisation, the Confederation of Finnish Industries (EK), has opened the way for a national accord on jobs and employment in the country. It says it is willing to take part in tripartite negotiations with unions, but wants workers to consider a two-year pay freeze.

EK says it is worried about the state of Finland’s economy. It believes a pay freeze, together with tax reductions and a reduction in employer’s contributions, will help to create jobs and increase purchasing power.

Meanwhile, Employment Minister Lauri Ihalainen says he wants to move wage talks between unions and employers, scheduled for the autumn, forward to this spring. In a TV interview, Minister Ihalainen stated that he would like to see information on a framework on wage development when the government reviews budget plans in mid-March.

Ihalainen is a former President of the Central Organisation of Finnish Trade Unions (SAK), which represents the interests of more than a million workers and 21 affiliated trade unions.

On Monday 11 March, SAK announced that if exploratory talks with employers continued, they could progress directly into full negotiations for a centralised settlement.

However, SAK and two other large trade union confederations, the Finnish Confederation of Professionals (STTK) and the Confederation of Unions for Professional and Managerial Staff in Finland (AKAVA), have rejected EK’s pay freeze idea. SAK has also set the condition that lowering pension contributions will not be used to boost purchasing power.

SAK President Lauri Lyly said the organisation would not accept any financing of employee purchasing power based solely on tax breaks or reduced contributions to earnings-related pension schemes. The SAK Executive Board particularly wants to see measures taken to curb unemployment, and to ensure that any accord includes qualitative improvements in working conditions.

The board of STTK, meanwhile, announced its readiness to go into negotiations with employers on a centralised national labour market accord. However, the STTK has also set conditions, including pay rises that will boost purchasing power.

The board of AKAVA made a similar announced.

Obstacle to cooperation resolved

At the beginning of March 2013, one notable obstacle to tripartite cooperation was removed. In the autumn of 2012, a dispute over the right of Finnish workers to three days of training per year strained relations between employers and trade unions. This annual three days of training was included in the previous framework agreement, but its implementation became an on-going problem.

The trade unions announced that the dispute meant that all other working life quality issues had been left unresolved and on the table until this particular issue was settled (FI1210011I).

Finally, in March, social partners announced that the dispute has been resolved, and that the clearing up of the problem was opening doors to continuation of negotiations on other topics. After coming to an agreement the issue, SAK President Lyly stated that ‘relations are starting to get better’.

Commentary

The EK seems to consider the level of bargaining as crucial. In 2008, EK announced the end of the centralised tripartite bargaining structure (FI0806029I), but after a period of sectoral collective agreements the organisation returned to the tripartite framework agreement in autumn 2011 (FI1111011I).

However, one of the causes of a recent reshuffle at EK was a dispute over centralised bargaining among EK-affiliated associations. It led to major boardroom changes at EK (FI1212011I). The result seems to be that the major employer organisation is now willing to make a centralised accord in an effort to tackle a situation where jobs are disappearing in Finland and the economic climate is exceptionally poor.

EK would only allow pay increases through local bargaining in those companies that showed growth in competitiveness. Trade unions, on the other hand, have said they will not accept a centralised or framework agreement that does not include general pay increases.

However, there is a strong willingness on the union side to have a centralised accord which will include some agreements aimed at improving the quality of members’ working lives. So it seems likely that the era of the tripartite centralised bargaining structure will continue with a new accord which will include very moderate pay increases.

Pertti Jokivuori, University of Jyväskylä

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