Bank service fees dispute averted

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Recently-announced plans by banks to levy service charges on the accounts into which employees' salaries and wages are paid, have resulted in trade union protests and the dropping of the proposals.

Salaries and wages in Finland are traditionally paid directly into employees' bank accounts, and the banks recently unveiled plans to start charging a service fee on these accounts. TheCentral Organisations of Finnish Trade Unions (SAK) strongly opposed the proposal, claiming that the banks' agreement with the Government on the main principles of the reform of service fees could in no way justify a policy change which infringes the public's sense of justice. SAK claimed that the proposed service fee would be used to offset other costs arising from bank business, and referred to calculations by the Finnish Bank Union, which indicate that banks are transferring the costs from reduced interest margins to borrowers in the form of service fees.

SAK threatened a protest campaign involving:

• the withdrawal of trade union representatives from the banks' administrative bodies;
• forcing banks to compete with each other for strike funds and union membership fees;
• a one-day protest in which employees would demand payment in cash;
• asking employers' organisations to pay union members' wages through personnel service offices; and
• looking for a retailing chain which would be prepared to enter the banking business and pay members' wages directly to them.

The campaign would have involved large sums of money: it is estimated that the total amount of wages and salaries to be paid out to SAK members this year is around FIM 100 billion.

The Confederation of Finnish Industry and Employers stated that there was no formal agreement between employer and employee organisations that requires wages and salaries to be paid into bank accounts. The Contract of Employment Act, dating from the 1970s, merely states that this is an option.

Following negotiations with SAK, the banks agreed to the principle that basic services on employees' pay accounts should be free of charge, and that possible future increases of service fees should be discussed in advance with SAK. SAK also requires that banks will not levy service fees when improving automatic banking machines.

According to the Contract of Employment Act, wages should be available on pay-day, and the employer is responsible for the costs arising from the method of payment. SAK will discuss with employers' organisations the extent to which employers would be responsible, should fees in future be levied on employees' pay accounts.