Finland: The role of government and social partners in keeping older workers in the labour market

  • Observatory: EurWORK
  • Topic:
  • Social dialogue,
  • Sustainable work,
  • Working conditions and sustainable work,
  • Inequality,
  • Industrial relations,
  • Collective bargaining,
  • Agreements,
  • Published on: 02 June 2013



About
Country:
Finland
Author:
Pertti Jokivuori
Institution:

Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

As Finland is one of the most rapidly ageing countries in the world towards 2020, the lengthening of people’s careers has been one of the most notable issues on the social partners’ agenda in recent years. The most important existing policy on ageing has been the introduction of a comprehensive pension reform with a flexible retirement scheme that took place in 2005. The reformed pension system includes a flexible retirement age between 63–68 years.

Background

The ageing workforce is a demographic process that can cause problems related to the sustainability of the welfare regimes and more specifically to the maintenance of the pension systems. On the labour market side, the aforementioned process can have damaging implications for the reproduction of skills and for the availability of the necessary workforce with different impacts in the various economic activities. Therefore, a shrinking working age population risks acting as a drag on economic growth through labour and skills shortages. Moreover, the projections of the 2012 Ageing report suggests that there will be a considerable increase in employment rates for older persons across the EU-27 during the next half a century.

In this context the EU has recognised the importance of the ageing challenge for many years and has developed policy in several areas. Active ageing features as part of the flagship policy ‘Europe 2020’.

Active ageing recognises that if people are to work for a longer period of time, then they will need to be in good physical and mental health, with access to more flexible working arrangements, healthy workplaces, lifelong learning and retirement schemes. In this regard, the attention might go beyond the older group of workers including middle age workers, for example. In order to address the abovementioned challenges, policy measures at national level are needed to promote working conditions that can help keeping workers in the labour market for longer in their lifetime. The content and aims of these policies may vary from country to country because of the particular situation of the different EU countries as regards life-expectancy, ageing, economic and sectoral structure and budgetary aspects.

The role of social partners is essential in this context, as they are key actors in shaping and improving working conditions in the various sectors. Some sectors are characterised by more strenuous jobs, adding to the challenge of keeping older workers in employment longer. Moreover, it is important to examine if and how recent changes (increasing statutory retirement age, economic crisis, technological change, and sectoral and production changes) have impacted on the nature of the policies for improving the quality of work of older workers.

In this framework, earlier case study research by Eurofound identified examples of companies with practices intended to develop a sustainable workforce through adequate working conditions that facilitate keeping older workers in employment and at the same time making possible the presence of the necessary skills in companies. However, given the recent socioeconomic changes and lack of updated comparative information, further research is needed in order to map strategies and measures at national level, as well as to assess certain initiatives from governments, social partners and social dialogue with the aim to improve quality of work in order to keep longer workers in the labour market.

National active ageing policies

The participation of older workers in the labour market is strongly conditioned by the national policy environment, in particular by the pension system framework, employment legislation, wage policies, occupational and wider health care provisions, active labour market policies as well as the availability of education and training.

In the recent years most Member States have put policy emphasis on reforming their pension systems and restricting access to early retirement and other early exit routes, which had become popular during the 1970s and 80s as ways to address youth unemployment and challenges of restructuring. As a result of these reforms, leaving the labour market early has become much more costly for individuals.

In addition, many countries are considering – or have already implemented – an increase in the statutory retirement age, partly to take account of the rise in healthy life expectancy and the changing nature of jobs (less physically demanding), but also – and particularly in the current economic climate – to ensure the long-term viability of their public pension systems in the context of increasing pressure on public budgets.

It is also important to note that pre-retirement pensions, which are contra-intuitive to the above outlined EU policy objectives, are still commonly used in a number of EU countries (including also as a result of the crisis), although they have been rendered significantly less attractive to older workers themselves as well as companies. Similarly, the possibilities of part-time career breaks or partial retirement, intended to stimulate workers’ return to a labour market or their retention on a reduced hours basis have in many countries been used as a first step towards early retirement.

Consequently, while the Member States’ policies emphasis has been on foreclosing avenues towards early retirement and raising of the retirement age, The number of governmental initiatives which have been taken to improve quality of work and to assist older workers in retaining a foothold on the labour market seems to be much smaller. Nevertheless, the measures which have been undertaken include among others:

  • Supporting ongoing skills development and validation of existing competences. These measures spring from the recognition that lifelong learning and ongoing skills development are key to supporting sustainable employability not just for older workers, but for the workforce at large (throughout working lives). To make lifelong learning a reality at this scale the current trends demonstrating an under-representation of lower skilled and older workers in continuous learning need to be overcome. Initiatives in this area have been taken both by social partners and national governments. In France, for example, a cross-sectoral social partner agreement from 2006 (later transferred into law), encourages the development of “second half of career interviews”, skills assessments and a better implementation of the individual right to training for workers over 45, while a law from 2005 obliges all companies with more than 300 employees to agree a three-year anticipatory plan on development of competences.
  • Awareness raising measures. These include, for example, financial support for initiatives aimed at making the business case for active age management and retaining older workers in the workplace. These measures also include fighting stereotypes about older workers’ adaptability and willingness to learn, health issues and the level of absenteeism.
  • Member States can also provide support in the development of age management strategies at organisational level (such measures exist in Germany and the Netherlands, among others).
  • Active labour market policies, including:
  1. Advice, counselling, guidance, job matching and vocational training measures to update existing skills and upskill older workers active in sectors facing declining demand;
  2. Subsidies for employers offering employment opportunities for older workers. Such subsidies are often time limited and can be tied to commitments to offer longer term employment or training.
  • Comprehensive approaches, including measures to support work ability and employability. A number of countries provide financial support for “work ability” measures, which take a holistic approach to ensuring an individual’s employability and work ability throughout working life, incorporating training, occupational health and other measures. The most commonly applied approach is the so called “Work ability index” initially developed in Finland.
  • Work organisation related measures, like removing barriers and promoting flexible working. Flexible working time organisation can benefit older workers. Such policies may include regulation developed to promote among older workers flexible work schedules, part-time working, teleworking and easier transition from old (outdated) positions to new tasks, simultaneously improving the employment protection of workers on atypical employment arrangements.

Social partners and active ageing

In recent years awareness of the importance of active age management policies has increased significantly among employers and trade unions in the EU, although the extent to which this has been actively addressed varies.

Just as different countries and regions, also different industry sectors and employers will face divergent age profiles among their staff and therefore varying pressures to take decisive action, although the overall trend towards a declining and ageing workforce is widely recognised as a challenge.

On the whole, social partners’ practices with regard to active ageing can include a number of key elements:

  • Changing attitudes to older workers within organisations (being age positive);
  • Workforce mapping and workforce planning combined with age positive recruitment;
  • Training, development and promotion policies as well as succession management;
  • Health and safety/ergonomics and job design (the two categories above are sometimes referred to as measures to maintain “work ability”);
  • Flexible working practices (temporal, geographical as well as functional, including workplace and work process redesign and redeployment; and
  • Cross cutting policies including inter-generational learning.

It has to be noted that social partner agreements may cover many of the above areas in a holistic approach to modernise industrial relations. For example some social partners organisations in the Netherlands have recently agreed on a social manifesto aiming to create sustainable employment through focus on developing knowledge, improving working conditions, increasing diversity and availability of individual’s choices for all their represented workers including older employees, youth, various education levels, working time arrangements and types of contracts.

Similarly, the social partners in Spain have recently signed a comprehensive active ageing strategy covering the period 2012-2014, which includes elements such as promotion of healthy and secure working conditions through evaluation of risks for older people and corresponding training and information, enhancing companies’ flexibility with regard to working hours to suit older workers needs, re-adapting PES services in improving employability of older workers, fostering experience transfer and fighting age discrimination.

Objectives of the assignment

The main objective of this questionnaire is to describe the strategies/ policies/measures developed by the national governments, as well as social dialogue agreements or individual initiatives of social partners (on national or industry level only) that contribute to improve the quality of work and employment conditions of older workers and to create the working conditions that promote longer working life, and therefore to keep older workers in the labour market.

1. National background and policy context – the main issues encouraging or preventing the extension of working life in your country

Because Finland is one of the most rapidly ageing countries in the world towards 2020, the age issue has long been highly relevant. The lengthening of people’s careers has been one of the most notable issues on the social partners’ agenda in recent years.

Finland has a long tradition of social dialogue and there has been a strong tendency to seek consensus on major societal issues like wages, pensions and education. Social partners have had a long tradition of negotiating income policy agreements that are covering not only wages but also quality aspects of working life like employment and labour market policies and other social policy issues such as balanced work and family life; promoting gender equality, social welfare and pension schemes; extending working careers; promoting innovations and workability at workplaces; and promoting life-long learning as well as agreeing on taxation policies which support these initiatives.

In 2009, a goal was set by social partners that the pension expectancy age for 25 years old would be 62.4 years in 2025. The goal was set to increase the real pension age by three years compared to the year 2008, when the pension expectancy age was 58.6 years.

In 2009, the Finnish government appointed two tripartite working groups (called Rantala-group and Ahtela-group, according to head of groups) to draft proposals for pension system reforms, with the aim of persuading unions and employers to agree on ways of lengthening employees’ careers and working lives. (FI1002019I)

The task of the so called ‘Rantala-group’ was to draft a proposal on raising the pension age and the task of the ‘Ahtela-group’ was to draft proposals on reforming working life ‘from the inside’, trying to promote structures within companies and the workplaces suitable to help extend working lives, i.e. on extending working careers, preventing work disability and early retirement and how to develop the occupational health system and workability.

Rantala-group failed to generate clear results, but Ahtela-group, ‘the soft-measure group’, was more successful and its suggestions were more positively regarded especially among the trade unions. This group made concrete proposals in three policy fields:

  1. measures to be taken for improving workability;
  2. measures for improving well-being at work;
  3. measures to lengthen the early phases of careers (by making transitions from basic education to secondary education and to higher education faster and more effective) and improve employability throughout working life.

The measures included actions aimed at more preventive and effective occupational health services and enhancing the availability of good quality occupational health services as well as earlier intervention with work related disabilities. A reform in the second field was the establishment of new ‘centres for well-being at work’ to provide individual workplaces with practical examples of good practice in addressing age-issues in workplaces. Proposals concerning the third topic were mainly about ensuring flexible transitions between different levels of education, smoother progress of studies, and linking education more closely with working life.

1.1 What are the main barriers in your country for the extension of working life?

  • Pension systems which continue to encourage, or fail to provide appropriate incentives to delay retirement (including the ongoing use of early retirement systems);
  • Taxation systems which make it difficult to combine the receipt of a wage with that of a (partial) pension;
  • Unemployment benefit systems which do not require older workers to be actively seeking work or which restrict their access to active labour market policy measures;
  • particularly large sectors (of national importance) that have predominantly outdated skills or predominantly employ older workers who are shortly expected to leave the labour market;
  • poor quality of working/employment conditions or prospects of personal development in sectors of national importance that force older workers out of employment (sooner);
  • any discrimination or stereotypes regarding older workers that hinder their employment or their re-employment;
  • provision in employment protection legislation which discourage the recruitment (or retention) of older workers;
  • any other contextual factors constituting barriers to longer and better quality working lives.

The main barriers for the extension of working life in Finland are not linked the matters like system of pension, taxation or unemployment benefit, nor any discrimination, but the fact that the well-being at work and workability of older workers is a key question.

The legislation or “systems” do not create barriers. So, the improving the quality of working life and workability calls for a better mobilisation of the total resources addressing these issues: a new level of cooperation between the social partners, employment officials, occupational health institutions, management and organisational innovation developers.

Disagreement over increasing the retirement age delayed the accomplishment of Rantala’s working group. It was dealing with a number of particularly difficult issues. The most contentious of these are calls for an increase in the retirement age, and the elimination of the so-called ‘unemployment tunnel’, whereby older unemployed persons (58 years or older) have an extra-long period of income-related unemployment benefit. In this way, they can transfer from unemployment to their pension.

The Confederation of Finnish Industries (EK) has called for the abolition of the unemployment tunnel, which allows for a smooth transition to retirement for older unemployed persons. However, the trade union side wants to keep the existing system. Employers and trade union representatives failed to bridge the gap on increasing the statutory age of retirement by three years. The unions have rejected any increase, while the employers want people to retire later than the current average retirement age of 63 years.

Employers have also wanted to remove income-related unemployment benefit for people made redundant at the age of 58 years or over. As noted, this benefit has enabled employees to take a form of early retirement before reaching the statutory retirement age and eligibility for a full pension at the age of 63 years. The trade unions have argued that employers themselves are to blame for this situation by dismissing older workers first.

Because the Rantala-group could not reach an agreement, it was discontinued in 2011. However, the tripartite working group was launched again from the beginning of 2012. A real barrier for rapid extension of older workers’ working life career is the fact that the current government has promised that during the ongoing government term, there will be no raise of retirement age. So, there will not be any statutory raise of retirement age until 2015.

1.2 In general, what are the main existing policies and other contextual elements contributing to the extension of working life?

Working conditions related aspects

Social and labour market aspects

  • Flexible pension systems which significantly reward extending working lives;
  • Taxation systems which encourage working longer (for example in combination with a partial pension)
  • Well-developed care systems (for child or elder care) which limit demand on older workers to take up such roles;
  • Active labour market policy measures which effectively encourage the recruitment of older workers (including subsidies).
  • Any other contextual factors constituting contributing to longer and better quality working lives.

The definitely most important existing policy on ageing and longer careers, with a clear impact, has been the introduction of a comprehensive pension reform with a flexible retirement scheme that took a place in 2005. The reformed pension system includes a flexible retirement age between 63–68 years, with clear incentives for staying longer in work through a stepwise increasing pension accrual rate (pension accrual rate is 1.5 % until the age of 53, during 53-62 it is 1.9% and between 63–68 4.5%). By cutting the relative amount of paid pensions by the life expectancy coefficient (the longer the life-expectancy of each cohort at the age of 62, the lower the pension will be in relation to the full pension), one of its core aims was to encourage people to go on working in order to obtain full pension entitlements. Two more core elements included reforming the unemployment pension (by abolishing the unemployment pension entitlement from those born in 1950 onwards and giving them instead an extension of the unemployment benefit until 65) and the reform of the part-time pension.

Although the present pension system allows employees to retire between the ages of 63 and 68, the actual average retirement age has been much lower because of the large number of workers who have stopped work on grounds of ill-health and claimed disability allowance. In 2011, the average retirement age was 60.5, up from 59.6 in 2010. The most important consequence of the flexible retirement scheme is the fact that real average retirement age has been ascending.

New initiatives have also been in preparation, but most of them are still waiting for realization, and some of them, like raising the statutory pension age, have become a political deadlock.

2. Policies promoting prolongation of working life through the improvement of quality of work

Prime Minister Jyrki Katainen’s government platform (FI1106021I) includes an agreement on the intended increase of the average pension age to at least 62.4 years by the year 2025. The labour market organisations approved this goal already in spring 2009. The joint objective of social partners is the central focus of the reform of the earnings-related pension scheme. The reform must take care to ensure the financing of the earnings-related pension scheme, sufficient pension security and inter-generational justice.

Age management has been addressed in several ways, and by several actors. Continuing the work already completed under the National Programme for Ageing Workers (1998-2002), the Finnish Institute of Occupational Health has been very active in promoting and disseminating good practices on well-being at work and age management.

In March 2012 three trade union confederations (SAK, STTK and Akava) released a joint agreement concerning the extension of work careers.

2.1 Developing skills (Training, lifelong learning)

Examples:

  • Measures / policies / agreements to improve in-work training provision.
  • Measures / policies / agreements to validate existing competencies and skills.
  • Other relevant measures (i.e. promotion of intergenerational skills exchange)
  • Others related to this area (i.e. a general initiative in this area)

In the current framework agreement of the social partners signed in November 2011 (FI1110011I), there is a special chapter devoted to the development of working life. On this basis, work is presently going on in several working groups (including the Ahtela and Rantala tripartite working groups) addressing the following topics:

  • extending working careers (age programmes in organisations addressing working hours, education and health check-ups for senior workers);
  • developing the labour markets for people with diminished working capacity (based on a special report addressing diminished working capacity, an action programme is being prepared on developing labour markets for part-time work);
  • development of personnel planning (flexible working time, reconciliation of work and family life, telework, temporary work, employment of people with diminished working capacity and skills development);
  • making new tripartite initiatives by end of 2012 on laws on labour protection addressing workload effects of working time on workability and working careers;
  • further development of the so called ‘Change Security’ measures in redundancy situations; promoting dissemination of good practices in personnel skills development; forming an educational fund which accrue on an ‘individual training account’ and can be used by the individual for upgrading skills;
  • tax initiatives to encourage companies to invest in personnel education.

As a method for increasing the participation in vocational training, Finland has pursued a coherent and more integrated career counseling system. The Ministry of Education and Culture has set up a task force on the strategy of lifelong guidance in order to create a national strategy for lifelong career guidance. In its memo the task force set five goals for the further development of the guidance system in Finland including ensuring the availability of the guidance services for citizens, improving citizens’ career planning skills as well as reinforcing the coordination and collaboration among the different guidance systems at national, regional, and local level.

2.2 Health and safety and health promotion

Examples:

  • Measures / policies / agreements to improve health and safety in the workplace (which go beyond basic legislative requirements)
  • Measures / policies / agreements to assist in the adaptation of workplaces for (older) workers with limited physical or psychological work capacity, including rehabilitation after incapacity/sickness and integration in the workplace for older workers.
  • Measures / policies /agreements aimed at overall health promotion in the workplace
  • Other relevant measures (i.e. a general initiative in this area)

The tripartite Ahtela-group made some concrete proposals in three policy fields:

  1. measures to be taken for improving workability;
  2. measures for improving well-being at work;
  3. measures to lengthen the early phases of careers (by making transitions from basic education to secondary education and to higher education faster and more effective) and improve employability throughout working life.

Firstly, the measures included actions aimed at more preventive and effective occupational health services and enhancing the availability of good quality occupational health services as well as earlier intervention with work related disabilities. A reform in the second field was the establishment of new ‘centres for well-being at work’ to provide individual work places with practical examples of good practice in addressing age-issues in workplaces. Proposals in relation to the third topic were mainly about ensuring flexible transitions between different levels of education, smoother progress of studies, and linking education more closely with working life.

The ‘maintenance of work ability’ (MWA) is a Finnish concept more or less similar to the internationally better known term of ‘workplace health promotion’. According to the Finnish Institute of Occupational Health (FIOH), MWA refers to “joint measures taken by employers, employees and workplace organisations in order to promote and support the work ability and functioning capabilities of all workers at every stage of their careers.

2.3 Work organisation related measures: flexible working time, career development and horizontal mobility

Examples:

  • Measures / policies / agreements to support temporal working time flexibility (flexible work schedules, part-time / reduced hours working in the run up retirement, time banks, etc.).
  • Measures / policies / agreements to support geographical flexibility (home working or teleworking policies).
  • Measures / policies / agreements to support functional flexibility (to achieve greater flexibility in who does what and how – for example to enable workers no longer able to do their former job to adapt to carry out new tasks). This could also mean mobility between companies.
  • Measures / policies / agreements to support career development beyond 50+
  • Other relevant measures related to work organisation (i.e. a general initiative in this area)

Local bargaining or company-level agreements have sometimes offered innovative solutions to the well-being of older workers at the workplace-level. Different kinds of flexible working time arrangements have been a key element in trying to find solutions to older workers’ well-being at work and workability.

One of the most interesting examples related to older workers’ working hour arrangements and well-being at work is so-called four-shift working hour arrangement which has been in use at the Fazer bakery Oululainen in Lahti. The four-shift system is designed for senior employees (over 50-year-olds). The idea of the four-shift working hour system is that aged employees work for three weeks and then have one week off. The employees having the week off (so-called fourth week) constitute a reservoir of labour. During peak demand periods the employer can recall them to work.

The employees at the Fazer bakery Oululainen have been very happy with the four-shift arrangement, because it allows them to have a week’s holiday in every month. The employer admits that the system is more expensive than the conventional three-shift work, but the work motivation has increased notably, the number of days of illness has decreased, and by means of the system employees are able to work until the age of retirement. The system is based on trust, being a very good example of local-level social capital in co-operation and negotiation relations. In the food industry, flexibility cannot be achieved by extending the working day, because employees simply cannot work more than eight hours per day.

According to the national framework agreement signed in 2011, the labour market parties shall draft a common model for the initiation of programmes for ageing workers to be applicable in all workplaces.

The workplaces can ensure the application of the programmes on the individual level in the form of, for example, individualised career plans.

Social partners are currently drafting a general model for the programmes for ageing workers. The elements of the workplace model include, among other things, flexible working hour arrangements, health examination programmes and training activities aimed at senior employees. The programme for ageing workers will touch upon all age groups.

In addition to the programme for ageing workers, a personal appraisal interview will be held with each ageing employee (upon reaching the age of 58-60 as a minimum) in order to determine the actions that will support the lengthening of that individual’s work career. The outcome of the discussion will serve as the foundation for an individualised model for progression (e.g. career plan). The plan would take into consideration, for example, the development needs related to the specific job (work organisation, working hours, etc.), the ability to continue in one’s career, and possible knowledge transfer.

2.4 Initiatives related to socio-cultural change

Examples:

  • Measures / policies / agreements to change “early exit culture”
  • Measures / policies / agreements to promote the value of older workers in terms of performance, competencies and experience
  • Other policies related to promoting changes of attitudes in the society and or in an specific sec tor about the value of older workers
  • Other (i.e. a general initiative in this area)

Until the mid-1990s, the main policy pursued was encouraging early retirement instead of extending careers or increasing the pension age.

A clear socio-cultural turning point happened in Finland in mid-1990s with the imminent great retirement of the post-war (baby-boom) generations, and with a major upswing of the economy in the latter half of the 1990s. Since then, there has been a continuation of policies and measures of longer careers. In 1996 a change in government policies was crystallized in the tripartite committee report named The Aged in Working Life. The report in fact, set the agenda of reforms for the next 15 years and continues to do so.

As a first major milestone initiative, the committee proposed that a special National Programme for Aged Workers should be launched, together with a special programme aimed at raising the educational level of the aged work-force. The programme was launched and ran between 1998-2002, with the aim of addressing a very comprehensive set of issues including early retirement, the employment rate, weak reemployment of ageing workers, weakening working capacity and the low educational level of ageing workers and lack of information in society on ageing and combatting ageism (age discrimination).

The primary target group of the programme consisted of employed and unemployed people aged 45-64. Other target groups included occupational health care and occupational safety staff, labour administration staff, education administration staff, employers and workplace communities, for whom the programme provided research, training and information.

The programme was been evaluated as a success in an independent evaluation and amongst social partners, and since then work has continued on the issues identified in the committee of 1996 and the programme, and successive government platforms.

Recently, lengthening the active working life of Finnish employees has been one of the most challenging issues facing its labour market. Pension policy and retirement age questions have dominated Finnish social policy debate.

In the Finnish society, there is ongoing real cultural change in encouraging employees to stay longer in working life. The ageing of the labour force, in general, and particularly amongst employees in the local government sector where a third is retiring in next ten years, has forced the Finnish policy makers to find means of increasing the well-being of older workers and of lengthening their work careers. These means have been quite successful, because the proportion of municipal employees who have postponed their exit from work has notably increased since the pension reform in 2005. Almost a quarter of those who retired on an old-age pension in 2007 had delayed their exit from the labour market, and each year some 3,000 local government sector workers are still working even after retirement.

2.5 Returning to work for unemployed older people

Examples:

  • Policies to improve access to the labour market, especially when 50+ workers are unemployed.
  • Others (i.e. a general initiative in this area)

The employment rate of the ageing has risen significantly during the last two decades but is still clearly lower than the average. Many studies have shown that unemployed persons over 55 years are much less willing to return to working life than the younger unemployed. Entitlement to additional days of earnings-related unemployment allowance appears to decrease the willingness to work of 60-year-old unemployed persons. Two years is a critical point in unemployment for the unemployed persons. After that the working capacity decreases sharply.

The Ministry of Social Affairs and Health launched the Masto project for the years 2008-2011 as a way to promote practices to increase wellness at work, to prevent the onset of depression, to provide good treatment and rehabilitation to help those suffering from depression to cope at work and return to work, and to reduce cases of work disability based on depression.

The trade union confederations have suggested that the following provisional content will be included in the Act on the Public Employment Service (1295/2002): Unemployed jobseekers who are aged 60 or older have the right, prior to the end of the maximum period of earnings-related unemployment allowance, to be placed in supported work or other active measure arranged by the employment authorities until such a time as the condition regarding previous employment has again been met. In these cases, the daily allowance is determined on the basis of the wages from an earlier employment.

2.6 Comprehensive programmes

Examples:

  • Initiatives covering various aspects for the improvement of quality of work in order to contribute to longer working lives.
  • Programmes combining working conditions, labour market and welfare aspects.

Aforesaid MWA project is a good example of comprehensive programmes in order to promote and support the work ability and functioning capabilities of all workers at every stage of their careers

The trade union confederations proposed in 2009 that collective agreements should contain a statute that special age programmes should be devised in all organisations. No consensus was reached on this but instead an agreement that a model of good practice on an age programme for companies will be developed during 2012 between the social partners in a special tripartite working group. Along these lines, employers and trade unions in the metalworking (technology) industry has launched a joint initiative, a special pilot programme, comprising 100 companies, where a very comprehensive approach to age management has been piloted and developed. This work will probably act as a trailblazer for the age programmes in companies. A name of the pilot project is “Hyvä Työ - Pidempi Työura” which means “Good Work - Longer Career”.

3. Views of Social Partners on the role of working conditions for keeping older workers in the labour market

The lengthening of careers is the joint target, and both employer side and trade union side agree that the improvement and development of working conditions for keeping older workers longer in the labour market has a key role in this target.

EK has emphasized that, to extend careers, three strategies are needed for an efficient package. The package should involve a quicker transition from education to the labour market, promote well-being at work and reform the pension scheme in its entirety.

The trade union side has been skeptical that an automatic increase of the retirement age based on legislation is not a right solution, nor an accurate method to lengthen careers. (FI0911029I)

The retirement age issue – to raise the statutory retirement age - has proved to be a matter of political controversy and deadlock from 2009 to February 2012. The remarkable chance inthis deadlock happened in February 2012 when the Central Organisation of Finnish Trade Unions (SAK) mandated its President, Lauri Lyly, to take part in talks on raising the retirement age. The Confederation of Finnish Industries (EK) has greeted SAK’s new approach that promises a real possibility of pension reform. (FI1203011I). Trying to find new solutions to longer careers is happening on the tripartite basis.

4. Commentary

Despite the strong mutual understanding of a need of longer careers, there has been a long-lasted tension concerning the means how to achieve this joint target. The employer side has been favouring the rise of statutory minimum age of retirement by reform of legislation, whereas trade union side has been trying to find softer ways. In 2009, the Confederation of Finnish Industries (EK) proposed that the standard age of retirement should be raised from 63 to 67 years. Then the proposal sparked anger among trade unions, which were warning that Finland could face a ‘pension war’ if employers try to raise the retirement age. After this dispute, social partners have tried to find solutions to lengthen career together in special tripartite working groups. It seems obvious that there will not be any rapid changes, but the average age of retirement is step by step raising. Employment rates of older workers have improved considerably during the last 15 years.

The contradiction can also be found between the more and more demanding and encumbered working life and employees’ physical and psychological workability. The average age for disability pensions is as low as 52 years, and the problems behind this are really difficult and complex, ranging from physically demanding work in industries and construction, to psychologically precarious and demanding jobs. In 2009, the disability pension was granted to a total of 2.612 less than 30-year-old or young adults. Of these, 1,954 (75%) received a disability pension on the basis of mental disorder.

Pertti Jokivuori, University of Jyväskylä

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