EurWORK European Observatory of Working Life

Restructuring dispute at Finnair continues

About

Country: 
Finland
Author: 
Pertti Jokivuori
Institution: 
Statistics Finland

In September 2008, all employee groups unanimously rejected a proposal by the Finnish national carrier Finnair to cut wages and salaries or freeze previously agreed pay rises, as a new cost-cutting measure by the company. Over the past few years, Finnair has already cut 700 jobs, and recently announced its plan to reduce its workforce by a further 400 employees. Moreover, the company’s decision to replace Finnish crew with Spanish crew on its Asia-bound flights has sparked controversy.

More job cuts announced

Over the past few years, Finland’s national airline Finnair has already shed 700 jobs (FI0611019I and FI0609029I). In the summer of 2008, when the previous mandatory joint consultation was finalised, the airline started a new round of consultations aiming to cut a further 400 jobs. With the consultation on the additional job cuts still ongoing, the company is proposing pay cuts as a new cost-saving measure.

Trade union reaction

The service sector director of the Union of Salaried Employees (Toimihenkilöunioni, TU), Tuovi Orpana, warning of Finnair’s threat to reduce staff by 400 workers, stated: ‘Employees should not be accused for defending their rights’. Ms Orpana described the company’s situation as follows:

Immediately at the beginning of the consultation, the company threatened to cut jobs. Finnair asked its personnel to choose between only bad alternatives. Since the set-up of the consultation was not, even in the very beginning, genuine, it is unjust to accuse the personnel. They are only defending the rights that all wage and salary earners have. Finnair has not suddenly been plunged into a crisis that would justify the drastic measures the company now plans to implement. For example, Finnair proposes that pay rises, due to come into effect in October and next spring, would be frozen for 15 months. Or, as an alternative to that, the company proposes a temporary 5% reduction of wages and salaries.

The Chair of the TU-affiliated Finnish Ground Staff Union (Finnairin Tekniset ry), Mauri Haapanen, stated that the employees could not see any sound reasons for such drastic measures in the current state of affairs at Finnair. According to Mr Haapanen, ‘the company is not obliged to take such measures. Furthermore, we reject the employer’s attempt to pass the buck by imposing the business risks of the company onto employees.’ Mr Haapanen emphasises that salaried employees are not willing to reopen the collective agreements that are presently in force.

In September 2008, all employee groups unanimously rejected Finnair’s proposals to cut wages and salaries or freeze previously agreed pay rises.

Row escalates over cabin crew pay on Asian routes

Finnair and the Finnish Cabin Crew Union (Suomen Lentoemäntä- ja Stuerttiyhdistys, SLSY), affiliated to the Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK), have argued over the pay of Asian flight attendants ever since the airline started taking on temporary workers for its flights to Thailand and China in 2002.

Chinese and Thai flight attendants working on Finnair flights on Asian routes are paid considerably less than other Finnair employees, according to the Chair of SLSY, Mauri Koskenniemi.

According to Mr Koskenniemi, Finnair gave assurances that the Asian cabin crew would be paid the same as Finnish employees when the company applied for work permits for foreign staff. He stated: ‘Their terms of employment also differ from those of the Finns.’

Company position

Finnair’s Chief Executive Officer (CEO), Jukka Hienonen, rejects the criticism of SLSY, arguing that the trade union’s goal is to get rid of all foreign cabin crew. He also highlighted that both local and national prosecutors have declined to act on the trade union’s complaints.

Mr Hienonen emphasised that the Asian flight attendants themselves are satisfied with their terms of employment. He added that the employment contracts of the Asian employees differ structurally from those of the airline’s Finnish staff: ‘It is not even possible to implement the Finnish contract, when the labour legislation of two countries is applied.’

According to Mr Hienonen, safety, and not economics, is the primary reason why Finnair has hired Asian flight attendants: ‘As 75% of the passengers are Asian, it is necessary to serve them in their mother tongue.’

In Finnair’s latest interim report from October 2008, the company complains that conditions for profitable business are becoming increasingly marginal:

In this situation we have sought cost savings by rationalising operations and by examining closely our second largest expense item, personnel costs. Our aim was to achieve flexibility through a temporary salary reduction, but personnel organisations clearly rejected this proposal. Thus, we have had to continue statutory employer-employee negotiations to achieve the savings through job cuts and lay-offs. And if this is not enough, we will make additional cuts in our capacity.

Pertti Jokivuori, Statistics Finland