The representativeness of trade unions and employer associations in the insurance sector - Finland

  • Observatory: EurWORK
  • Topic:
  • Published on: 13 May 2012



About
Country:
Finland
Author:
Pertti Jokivuori
Institution:

The Finnish insurance sector consists of 145 companies employing a total of 10,829 employees in 2009. The sector has remained quite stable during the past ten years. It has just one employer association; the EK-affiliated Federation of Finnish Financial Services (FK). FK and the Union of Insurance Employees in Finland (VVL) have conducted the only collective agreement that has been applied to the sector’s other trade unions; Suora and the Finnish Association of Business School Graduates (SEFE).

1. Sectoral properties

Economic background

Both the number of companies and employment levels have been very stable during the past ten years. The financial sector experienced a strong restructuring process during the economic crisis at the beginning of 1990s, but in the 2000s the sector has been sustainable. However, the numbers of companies has diminished during this period, due to mergers and rationalisation processes.

Development of employment

Table 1: Sectoral properties
  1999 2009
Number of companies in the sector

185

145

Source of company data

Statistics Finland

Statistics Finland

Aggregate employment

11,245

10,829

Male employment

3,847

3,610

Female employment

7,399

7,219

Share of sectoral employment in %

0.5%

0.4%

Source of employment figures

Statistics Finland

Statistics Finland

2. The sector’s trade unions and employer associations

This section includes the following trade unions and employer associations:

(i) trade unions which are party to sector-related collective bargaining (In line with the conceptual remarks outlined in the background information included in the accompanying excel spreadsheet, we understand sector-related collective bargaining as any kind of collective bargaining within the sector, i.e. single-employer bargaining as well as multi-employer bargaining. For the definition of single- and multi-employer bargaining, see 4.2)

(ii) trade unions which are a member of the sector-related European Union Federation (i.e. UNI-Europa – Finance)

(iii) employer associations which are a party to sector-related collective bargaining

(iv) employer associations (business associations) which are a member of the sector-related European Employer/Business Federation (i.e. CEA - European Insurance and Reinsurance Federation, AMICE - Association of Mutual Insurers and Insurance Cooperatives in Europe and BIPAR- The European Federation of Insurance Intermediaries )

2a Data on the trade unions

Table 2: Union Fact sheet: The Union of Insurance Employees in Finland (VVL)
Affiliation to multinational organisations

VVL is a member of UNI-Finance Sector.

Affiliation to European-level organisations

 

Affiliation to national-level organisations

VVL is a member of Nordic Financial Unions NFU.

 

VVL is a member of Finnish Confederation of Salaried Employees (Toimihenkilökeskusjärjestö, STTK)

Engagement in sector-related collective bargaining

VVL has conducted a collective agreement with FK in the insurance sector.

Type of membership

Voluntary

Consultation in sector-related matters

Yes

Union's domain with regard to sector

pls answer all qu. above.

Domain overlap with other unions in sector

VVL is the biggest trade union organising employees particularly in the insurance sector

Domain overlaps occur with the following unions in the sector

VVL’s domain is partly overlapping the members of SEFE and Suora.

 

2009
Table 2: Union Fact sheet: The Union of Insurance Employees in Finland (VVL)
‘Active’ union members total (in employment)

6,838

Union members (incl. non-employed), total

9,663

 

2009
‘Active’ union members in the sector (in employment)

6,838

Union members in the sector, total (incl. non-employed)

7,052

Female membership as a % of total members

81%

Source of sectoral membership figures

Source: Membership-register of VVL, figures based on the union data. Interview with the Chair of VVL, Kirsi Kovanen.

Union density - active members

78%

Sectoral density - active members

78%

Sectoral domain density - active members

78%

Union density - total members

78%

Sectoral density - total members

78%

Sectoral domain density - total members

78%

Description of union's domain with regard to sector

VVL’s domain in same as sector of insurance

Representation of other groups than employees in the sector

VVL is not representing any other occupational groups than those working in the insurance sector

Table 3: Union Fact sheet: The Finnish Association of Business School Graduates (SEFE)
Affiliation to multinational organisations

SEFE is a member of UNI-Finance Sector and ETUC.

Affiliation to European-level organisations  
Affiliation to national-level organisations  

 

SEFE is a member of the Confederation of Unions for Academic Professionals (AKAVA).

Engagement in sector-related collective bargaining

SEFE is following a collective agreement conducted with VVL and FK in the insurance sector.

Type of membership

Voluntary

Consultation in sector-related matters

Seldom

Union's domain with regard to sector

pls answer all qu. above.

Domain overlap with other unions in sector

SEFE is a central organization for graduates and students in economics and business administration employees. Some members are working in the insurance sector

Domain overlaps occur with the following unions in the sector

SEFE’s domain is partly overlapping the members of VVL and Suora.

Table 3: Union Fact sheet: The Finnish Association of Business School Graduates (SEFE)

 

2009
‘Active’ union members total (in employment)

32,000

Union members (incl. non-employed), total

47,000

 

2009
‘Active’ union members in the sector (in employment)

720

Union members in the sector, total (incl. non-employed)

750

Female membership as a % of total members

52%

.

Source of sectoral membership figures Interview with the Chair of VVL, Kirsi Kovanen

Source: Membership-register of SEFE, figures based on the union data. Interview with the authorized reprentative of SEFE, Johanna Lähteenmäki.

Union density - active members

70%

Sectoral density - active members

37%

Sectoral domain density - active members

40%

Union density - total members

70%

Sectoral density - total members

55%

Sectoral domain density - total members

70%

Description of union's domain with regard to sector

The insurance sector is a small part of union’s domain

Representation of other groups than employees in the sector

SEFE is representing economists mainly in the finance sector.

Table 4: Union Fact sheet: The Trade Union Suora (Suora)
Affiliation to multinational organisations  
Affiliation to European-level organisations

Suora is a member of the Nordiska Finansanställdas Union (NFU) and the Union Network International (UNI).

Affiliation to national-level organisations

Suora is a member of Finnish Confederation of Salaried Employees (Toimihenkilökeskusjärjestö, STTK)

Engagement in sector-related collective bargaining

Suora is following a collective agreement conducted with VVL and FK in the insurance sector.

Type of membership

Voluntary

Consultation in sector-related matters

Seldom

Union's domain with regard to sector

pls answer all qu. above.

Domain overlap with other unions in sector

Yes

Domain overlaps occur with the following unions in the sector

Suora’s domain is partly overlapping the members of VVL and SEFE.

 

2009

‘Active’ union members total (in employment)

30,700

   
Union members (incl. non-employed), total

25,300

   

 

2009

‘Active’ union members in the sector (in employment)

310

   
Union members in the sector, total (incl. non-employed)

310

   
Female membership as a % of total members

88%

Source of sectoral membership figures

Membership-register of Suora. Interview with the Expert on Research and Statistics of Suora, Seppo Siika-aho.

Union density - active members

75%

   
Sectoral density - active members

70%

   
Sectoral domain density - active members

50%

   
Union density - total members

75%

   
Sectoral density - total members

70%

   
Sectoral domain density - total members

70%

   
Description of union's domain with regard to sector  
Representation of other groups than employees in the sector

The Trade Union Suora is an interest group for people working in the finance and insurance sectors as well as in the gaming business and alcohol trade. Only a small amount of members work in the insurance sector, due to the fact that banks used to have financial and insurance activities. The Trade Union Suora merged on 1 Jan 2011 with the Union of Salaried Employed (TU) forming a Trade Union Pro (Ammattiliitto Pro).

2b Data on the employer associations

Table 5: Employers’ organisation: The Federation of Finnish Financial Services (FK)
Affiliation to multinational organisations

FK is a member association of the the Confederation of Finnish Industries (Elinkeinoelämän keskusliitto, EK), and FK has a membership in CEA.

Affiliation to European-level organisations  
Affiliation to national-level organisations  
Engagement in sectoral-related collective bargaining

FK has conducted a collective agreement with VVL in the insurance sector.

Consultation in sector-related matters

Yes

Type of membership

Voluntary

Organisation's domain with regard to sector

pls answer all qu. above

Domain overlap with other organisations in sector

FK is a trade body that represents its member companies who engage in the financial services industry.

Domain overlaps occur with the following organisations

n.g.

 

2009
Number of member companies, total

470

   
Number of employees in member companies, total

43,000

   

 

2009
Number of member companies in sector

110

   
Number of employees in member companies in sector

11,000

   
Source of membership figures

Data register of FK. Interview with the Director of FK, Jorma Kontio.

Domain density - companies

70%

   
Sectoral density - companies

75%

   
Sectoral domain density - companies

75%

   
Domain density - employees

90%

   
Sectoral density - employees

Appr. 100%

   
Sectoral domain density - employees

Appr. 100%

   
Description of organisation's domain with regard to sector

The insurance sector is a part of FK’s domain which is the financial market sector.

Representation of particular subgroups of enterprises

The Finnish financial market is made up of deposits, insurance products, fund investments, lending products and employee pension assets.Moreover, authorised pension insurers and workers compensation insurers, are also members of FK. The Federation of Finnish Financial Services was formed at the start of 2007 through a merger between the Finnish Bankers’ Association; the Federation of Finnish Insurance Companies; theFinnish Finance Houses Association, and the Employers’ Association of Finnish Financial Institutions. At the start of 2009, the federation was joined by the Finnish Association of Securities Dealers.

Table 6: Employers’ organisation: Finnish Insurance Brokers' Association (SVAM)
Affiliation to multinational organisations

.

Affiliation to European-level organisations

European Federation of Insurance Intermediaries (Bipar)

Affiliation to national-level organisations

Federation of Finnish Enterprises (Suomen Yrittäjät)

Engagement in sectoral-related collective bargaining

no

Consultation in sector-related matters

yes

Type of membership

voluntary

Organisation's domain with regard to sector

sectionalism

Domain overlap with other organisations in sector

no

Domain overlaps occur with the following organisations

n.g.

 

pls select year
Number of member companies, total

20

 

 
Number of employees in member companies, total

250

   

 

pls select year
Number of member companies in sector

20

   
Number of employees in member companies in sector

250

   
Source of membership figures

Own calculation

Domain density - companies

Rough estimate:

   
Sectoral density - companies

Rough estimate:

   
Sectoral domain density - companies

33,0%

   
Domain density - employees

Rough estimate:

   
Sectoral density - employees

78,0%

   
Sectoral domain density - employees

78,0%

   
Description of organisation's domain with regard to sector

Finnish Insurance Brokers' Association SVAM representing insurance brokers.

3. Inter-associational relationships

3a Inter-union relationships

3a.1 Please list all trade unions covered by this study whose domains overlap.

The Union of Insurance Employees in Finland (VVL)

The Finnish Association of Business School Graduates (SEFE)

The Trade Union Suora

3a.2 Do rivalries and competition exist among the trade unions, concerning the right to conclude collective agreements and to be consulted in public policy formulation and implementation?

VVL is the most important trade union in the sector, and it has conducted a collective agreement with FK that other unions follow. There is no competition or rivalry concerning the right to conclude collective agreements in the insurance sector.

3a.3 If yes, are certain trade unions excluded from these rights?

3b Inter-employer association relationships

3b.1 Please list all employer associations covered by this study whose domains overlap.

The Federation of Finnish Financial Services (FK)

3b.2 Do rivalries and competition exist among the employer associations, concerning the right to conclude collective agreements and to be consulted in public policy formulation and implementation?

No, because FK is the only employer association in the sector.

3b3 If yes, are certain employer associations excluded from these rights?

3b.4 Are there large companies or employer associations which refuse to recognise the trade unions and refuse to enter collective bargaining?

No.

4. The system of collective bargaining

4.1. Estimate the sector’s rate of collective bargaining coverage (i.e. the ratio of the number of employees covered by any kind of collective agreement to the total number of employees in the sector).

100%

4.2. Estimate the relative importance of multi-employer agreements and of single-employer agreements as a percentage of the total number of employees covered. (Multi-employer bargaining is defined as being conducted by an employer association on behalf of the employer side. In the case of single-employer bargaining, it is the company or its subunit(s) which is the party to the agreement. This includes the cases where two or more companies jointly negotiate an agreement.)

The rate of collective bargaining coverage is 100%.

4.2.1. Is there a practice of extending multi-employer agreements to employers who are not affiliated to the signatory employer associations?

The collective agreements have a generally or universally binding nature. Since 1971, a principle of general applicability of collective agreements has been in effect in Finland. According to this principle, employers that are not organised in terms of collective bargaining have to comply with the national agreements that concern their field of economic activity. The generally binding nature of a collective agreement depends on various factors, especially the organising rate of the employers and employees in the sector concerned. Since 2001, a public authority (Commission of the Ministry of Labour) formally decides whether collective agreements are generally binding. The decision of this commission may be appealed at the Labour Court, the decision of which is final.

The decision regarding the general validity is published in the Regulations Collection maintained by the authorities, and agreements confirmed as generally binding are available free of charge on the internet. An agreement is generally applicable if it can be considered representative of the field in question. The criteria for representativeness are evaluated based on:

  • statistics that measure the general applicability of collective agreements;
  • the established practices of agreements in the field;
  • the organisation rate of the negotiating parties.

The aim of the system of general applicability to guarantee minimum conditions is also taken into consideration.

4.2.2. If there is a practice of extending collective agreements, is this practice pervasive or rather limited and exceptional?

Pervasive.

4.3. List all sector-related multi-employer wage agreements* valid in 2008 (or most recent data), including for each agreement information on the signatory parties and the purview of the agreement in terms of branches, types of employees and territory covered.

* Only wage agreements which are (re)negotiated on a reiterated basis.

Table 7: Sector-related multi employer wage agreements

Bargaining parties

Purview of the sector-related multi-employer wage agreements

  Sectoral Type of employees Territorial

FK and VVL

Insurance sector

Insurance officials

General binding, national

4.4. List the sector’s four most important collective agreements (single-employer or multi-employer agreements) valid in 2008 (or most recent data), including for each agreement information on the signatory parties and the purview of the agreement in terms of branches, types of employees and territory covered. Importance is measured in terms of employees covered.

Table 8: Four most important agreements in terms of employees covered

Bargaining parties

Purview of the agreements

  Sectoral Type of employees Territorial

FK and VVL

Insurance sector

Insurance officials

General binding, national

5. Formulation and implementation of sector-specific public policies

5.1. Are the sector’s employer associations and trade unions usually consulted by the authorities in sector-specific matters? If yes, which associations?

FK and, from the trade unions’ side, VVL.

5.2. Do tripartite bodies dealing with sector-specific issues exist? If yes, please indicate their domain of activity (for instance, health and safety, equal opportunities, labour market, social security and pensions etc.), their origin (agreement/statutory) and the interest organisations having representatives in them:

There are no sector-specific tripartite bodies in the insurance sector.

6. Statutory regulations of representativeness

6a Statutory regulations of representativeness for trade unions

6a.1 In the case of the trade unions, do statutory regulations exist which establish criteria of representativeness which a union must meet, so as to be entitled to conclude collective agreements? If yes, please briefly illustrate these rules and list the organisations which meet them.

In Finland, the central principles of collective bargaining have been recorded in the Collective Agreements Act:

The employer party may be one or more employers or a registered association of employers. The employee party must be a registered employee association. The term employer association refers to an association whose main purpose is to look after the employers’ interests in employment relationships. The term employee association, on the other hand, refers to an association whose main purpose is to look after the employees’ interests in employment relationships.

6a.2 In the case of the trade unions, do statutory regulations exist which establish criteria of representativeness which a union must meet, so as to be entitled to be consulted in matters of public policy and to participate in tripartite bodies? If yes, please briefly illustrate these rules and list the organisations which meet them.

No statutory regulations exist.

6a.3 Are elections for a certain representational body (e.g. works councils) established as criteria for trade union representativeness? If yes, please report the most recent electoral outcome for the sector.

No.

6b Statutory regulations of representativeness for employer organisations

6b.1 In the case of the employer organisations, do statutory regulations exist which establish criteria of representativeness which an organisation must meet, so as to be entitled to conclude collective agreements? If yes, please briefly illustrate these rules and list the organisations which meet them.

See the answer 6a.1.

6b.2 In the case of the employer organisations, do statutory regulations exist which establish criteria of representativeness which an organisation must meet, so as to be entitled to be consulted in matters of public policy and to participate in tripartite bodies? If yes, please briefly illustrate these rules and list the organisations which meet them.

No statutory regulations exist.

6b.3 Are elections for a certain representational body established as criteria for the representativeness of employer associations? If yes, please report the most recent outcome for the sector.

No.

7. Commentary

Due to fact that only one employer association (FK) and only one union (VVL) are, in practice, operating in the field, the insurance sector is very stable concerning the representativeness in the sector.

Pertti Jokivuori, University of Jyväskylä

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