Finland’s situation continues to be difficult


Paikallisen sopimisen edistäminen

The Finnish Government continues to prepare legislation to improve competitiveness, or so-called repressive legislation, regardless of trade union movement representatives and many legal scholars having expressed concern that the measures are unconstitutional and breach EU legislation.
In parallel to the Government’s preparation, the trade union organisations are conducting their own negotiations on pay solutions and other labour market measures that could replace possible legislation.

The employee side acknowledges the seriousness of the economic situation and is ready to participate in measures to bring about economic recovery through mutually agreed means. However, the negotiations are making sluggish progress, above all due to the passive attitude of the employers.
One of the Government’s own proposals for legislation is to reduce earnings-related unemployment security by reducing its duration by a hundred days. The change would become effective on 1 January 2017.

A report on local pay bargaining systems was completed in mid-October. It advocates a significant increase in their use. Local pay bargaining is based either on negotiation or legislation. From the employees’ perspective there is a high risk that new laws bypass wage agreements and employment conditions agreed through collective bargaining and undercut the minimum levels set by them. The Government is considering its own measures with respect to the report until the end of November.
The Government’s preparatory legislative package (repressive laws) is aimed at cost-saving in numerous ways. Legislation on immovable holidays (Twelfth Day and Ascension Day) would be changed, the first sick day made unpaid and the following eight days paid at only 80% of full pay, while it currently is 100 per cent. Other plans include the cutting of holiday pay and a maximum limit of six weeks set for annual holidays.

The Government faces the risk of repressive legislation leading to social unrest and a governmental crisis. It would also present a problem if the repressive legislation proved to contravene the Finnish constitution and international agreements.