Finnish trade unions launch collective bargaining based on a new Competitiveness Pact

The Central Organisation of Finnish Trade Unions (SAK) is prepared to present a new labour market Competitiveness Pact to its affiliates for a fresh round of collective bargaining.
07.03.2016 14:51
SAK
SAK Executive Board

The contentious decision to forward the Pact for negotiation by sectoral trade unions and employers’ federations was supported at a meeting of the SAK Executive Board on Monday by a 14-5 majority of votes cast with one abstention.

The SAK decision requires the Finnish government to comply with the Competitiveness Pact by cancelling 1.5 billion euros in expenditure cuts and tax hikes, and reducing income taxes.

“We now expect businesses to shoulder the responsibility of investing, with support from the government to get things moving. Finland needs employment and public investment that encourages investment in the private sector as well. The business community and the government are responsible for making this happen,” stresses SAK President Lauri Lyly.

The national labour and employer confederations reached a negotiated settlement on a general labour market agreement or Competitiveness Pact on 29 February. The new Pact was already approved a week ago by Finland’s other national confederations, gaining support from the Confederation of Unions for Professional and Managerial Staff in Finland (Akava) and the Finnish Confederation of Professionals (STTK) representing employees, and from the Confederation of Finnish Industries (EK) and the Commission for Local Authority Employers (KT) on the employers’ side.

Coverage of the Pact to be assessed in June

Unions and employers in various sectors have now been given until the end of May to conclude the amendments to their collective agreements that the new Pact requires.

The national labour and employer confederations will assess the coverage of the new Pact on 1 June. The outcome of this assessment will depend on the share of industries and employees that have aligned with the Pact following collective bargaining by individual trade unions and employer organisations.

The SAK Executive Board will in turn assess the government’s practical response to the Pact in June.

The coverage assessment and the June decision of the SAK Executive Board will determine whether the Pact finally enters into force at that time.

Negotiations launched at the behest of national government

Negotiations on a labour market pact were initiated in spring of last year following a demand by the Finnish government enjoining the national labour and employer confederations to conclude a social contract that would cut unit labour costs and thereby improve Finland’s relative economic competitiveness.

The confederations accordingly held several negotiating meetings last year. The government then announced in the autumn that it would enforce a cut in terms and conditions of employment through mandatory legislation if no labour market settlement could be reached.

Negotiations were restarted at the end of January and the question of enlarging the scope of local collective bargaining was also then included at the request of SAK. This request sought to discourage the government from legislating to introduce such measures as enabling collective bargaining at individual workplaces leading to lower wage rates than those guaranteed in the national collective agreement.

The Competitiveness Pact in brief