Government postpone cuts in unemployment benefits

Discussion on the so-called social contract is becoming ever more heated in Finland. The new Government wants to squeeze an agreement out of the labour market organisations before the end of August this year. The Trade Union Confederations wish to delay the deadline for a conclusion to these negotiations to the autumn of 2016. The trade union movement has stated very clearly that they will first negotiate on the optional third year of the national pact for employment and growth. This centralised agreement sets pay rises to an almost zero level in order to help the Finnish economy.

If the Government seeks to push its planned austerity measures through at the same time, negotiations surrounding the pact will become very difficult if not impossible, the trade union confederations said. The level of unemployment benefits is a part of the original pact. Now the Government has announced it will postpone plans to cut 200 million euros from unemployment benefits.

According to the Government announcement the proposals will be prepared ”in accordance with the Government Programme and in conjunction with the social partners” this autumn. The cuts will be implemented from January 2017. The reason for this move is obviously to ensure a quick result in the on-going negotiations on the national pact for salaries. However, it seems highly likely that the Government will in any event forge ahead with its plans to weaken or water down existing labour legislation, and at the same time introduce a number of new austerity measures. It is worth noting that neither in the Government announcement nor in the Government Programme is there any mention of tripartite negotiations.

This is in clear contrast to the well-established Finnish system of tripartite negotiations when the Government, the Trade Union Confederations and the Employers’ Confederation all played a central role.

Real negotiations take time

Even though Prime Minister Juha Sipilä’s Government has not yet officially published its finalised version of the social contract, it is evident that the main thrust will be to ensure that Finns work longer hours. The 100 hours extra unpaid work per year suggested by PM Sipilä would be to the detriment of workers and benefit employers.

The Trade union Confederations Akava, SAK and STTK are willing to negotiate on the social contract but want to delay the deadline, by one year, until autumn 2016. The board of Akava said it is ready to negotiate on the social contract, but it insists on even-handedness. The employers’ financial responsibility for redundancies has to be broader, Akava says. SAK chairperson Lauri Lyly also wants to see a more balanced agreement. ”We want evidence that the employers are fully engaged in the project and are willing to take responsibility. Right now it seems like that wage and salary earners are expected to shoulder the whole burden”, Lyly says. STTK chairperson Antti Palola takes the view that the schedule set by the Government is too tight and unrealistic. ”There are major issues on the negotiation table and it seems there are not too many delicacies on offer for wage and salary earners.” STTK also wants to see an agreement that compels employers to accept and take their share of responsibilities.



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