EurWORK European Observatory of Working Life

Strike at Finnair over restructuring is settled by conciliation

About

Country: 
Finland
Author: 
Pertti Juhani Jokivuori
Institution: 
Statistics Finland

A dispute has been ongoing for the past few months at Finnish national airline, Finnair, over the company’s restructuring plans. On 19 November 2006, Finnair cabin crew members decided to take strike action when a proposal by a national conciliator to postpone the start of the strike was rejected by the Finnish Cabin Crew Union. A draft settlement was subsequently reached on 20 November to stop the two-day strike. Both sides in the dispute accepted a draft settlement put forward by the national conciliator, Juhani Salonius. Mr Salonius did not submit a settlement proposal, as the dispute involved different interpretations of the existing collective agreement.

On the morning of 19 November 2006, cabin crew members of the Finnish national airline, Finnair, decided to take strike action when a proposal by the national conciliator, Juhani Salonius, to postpone the start of the strike was rejected by the trade unions. The dispute began when Finnair announced its intention to hire 500 new cabin crew members for its Asian routes through its associated Estonian company, Aero Airlines, which pays its cabin crew staff about 30% less than Finnair (FI0609029I). Finnair’s Chief Executive Officer (CEO), Jukka Hienonen, stated that the company aims to reduce its labour costs to the same level as its domestic competitors. To achieve this, Finnair wants to hire its new employees according to the employment terms of Aero Airlines. Mr Hienonen stated that Finnair needs new staff to cover its expanding Asian services and European connections. Moreover, he predicts that by 2011, Finnair’s Asian services could lead to the creation of 2,000 new jobs.

Proposal to settle dispute

On 20 November 2006, a settlement was reached that brought to an end the two-day strike by Finnair’s cabin crew. Both sides in the dispute accepted a draft settlement by the national conciliator Juhani Salonius. Mr Salonius did not submit a settlement proposal as the dispute involved diverging interpretations of the existing collective agreement.

Director Peter Forsström of the Association of Support Service Industries (Palvelualojen Toimialaliitto, ASSI), affiliated to the Confederation of Finnish Industries (Elinkeinoelämän keskusliitto, EK), stated that the draft settlement means that new cabin crew would be hired under Finnair’s internal agreement rather than under national agreement. Mr Forsström added that the higher cost may affect the number of flight attendants Finnair recruits. Moreover, Mauri Koskenniemi, the Chair of Finnish Cabin Crew Union (Suomen Lentoemäntä- ja Stuerttiyhdistys, SLSY), affiliated to the Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK), considered that the settlement restored the situation that prevailed prior to Finnair’s recruitment announcement. He added that ‘both new and fixed-term employees will be paid according to Finnair’s existing agreement’. Moreover, he believed that the company would still recruit around 500 new flight attendants.

The settlement came a day after members of the SAK-affiliated Transport Workers’ Union (Auto- ja Kuljetusalan Työntekijäliitto, AKT) – with which SLSY is negotiating a merger – stopped refuelling aircrafts owned or chartered by Finnair. In addition, other unions, including the SAK-affiliated Finnish Aviation Union (Ilmailualan Unioni, IAU), had pledged their support for SLSY’s call for strike action.

Fines imposed on both sides

The strike and the alleged breaches of contract were subsequently assessed by the Labour Court (Työtuomioistuin) with the result that both sides were ordered to pay fines for violating the collective agreement. SLSY was ordered to pay a fine of €8,000 for violating the ongoing collective agreement by organising a strike. Finnair was ordered to pay a fine of €4,500 for putting pressure on the employee side, despite the fact that a collective agreement was already in force. The ASSI employer organisation was also fined €3,000 for neglecting its duty to monitor the activities of its member company, Finnair.

Commentary

It is quite obvious that the settlement in this dispute only represents a short-term truce and that the issue will emerge again at least when the ongoing national incomes policy agreement period expires in the autumn of 2007.

Pertti Juhani Jokivuori, Statistics Finland