Local agreements on pay in the technology industry

Helsinki (04.03.2021 – Heikki Jokinen)

The question of so called local agreements seems now to be centre stage of the Finnish labour market debate. The problem is that it is not clear exactly what people mean when they speak about local agreements.

In general, the trade union side focuses on flexibility in issues like organising work shifts, fixing holidays, and introducing working hour accounts.

From the employers side, local agreements seem to mean the possibility to cut pay below collective agreements and make working hours longer than agreed. Also, an opportunity to sidetrack unions and shop stewards in this process would appear to be important.

Basically, the question of local agreements is about the broader possibility to apply branch level collective agreements at individual company level. In many practical situations, flexibility is needed.

Most of the collective agreements now already include several areas around which it is possible to agree on something at a local level in a different way than that written into the sector collective agreement.

For instance, one of the major collective agreements is the one covering the technology industry. It covers nearly 70 points that can be agreed locally in a different way than in the agreement. It even allows for part of the pay rise to be agreed at company level.

According to information released by the Industrial Union in February, in the second year of the agreement 53 per cent of employees in the technology industry came under local agreements with respect to pay rises. These findings stem from answers to a questionnaire for shop stewards, the same people from the union side who can make these local agreements.

The results of the local agreements vary, as one might expect. The national level collective agreement gave a two per cent pay rise for the second year of the agreement. The use of this pay rise can be negotiated locally. Should there be no local agreement, then there will be a 1.4 per cent pay rise for all. The employer can decide on how to use 0.6 per cent of the pay rise in accordance with the guidelines agreed to by the negotiation parties.

The questionnaire reveals that for 83 per cent of the employees salaries were raised by a full two per cent. And a more than two per cent pay rise was agreed for 10 per cent of employees and less than two per cent for 7 per cent. Only in 0.2 per cent of workplaces was it agreed that there will be no pay rise at all.

Jyrki Virtanen, Head of the Technology Sector in the Union, says in Tekijä magazine that the local agreement is obviously functioning, as local agreements are a fact of life at so many workplaces.

“We cannot expect that everyone wants to make a local agreement on salaries”, Virtanen says. “Several companies are telling us that they expect solutions to come from the labour market parties.”



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