Labour Research April 2016

European news

Deal is reluctantly agreed in Finland

Finnish unions have reached an agreement with the employers which involves a 12-month pay freeze, higher employee contributions towards pensions and unemployment insurance and an additional 24 hours’ work a year without a corresponding pay increase.

As well as this, public sector workers will see their holiday bonuses cut by 30% between 2017 and 2019 and there will be new arrangements to encourage local bargaining. These are to make it possible to reduce wages below the agreed rates, where the employer faces financial difficulties which could result in job losses. 

Finland’s union confederations, SAK, STTK and Akava accept that the deal will worsen members’ conditions. But head of SAK Lauri Lyly said that “the alternative is even worse than what we have offered”. 

The government had intended to cut spending and increase taxes as well as imposing changes on Finland’s bargaining system. As result of the deal, these plans have now been abandoned.

However, four of SAK’s 22 affiliates, including the largest, the services union PAM, have said they will not be bound by the agreement. Together they make up 40% of SAK’s membership.

This is potentially significant as the deal, known as the Competitiveness Pact, will not take effect if the coverage of industry-level agreements implementing it is deemed to be insufficient when the unions and employers at national level review it in May.