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In September 2000, the Finnish social partners and government started preparations for the forthcoming bargaining round, which may take place at central level. Trade unions have made a number of "qualitative" demands, such as a cut in working time and a pay indexation clause to guarantee purchasing power in the event that inflation is higher than estimated. The employers take a negative view of the growing weight given to qualitative issues and do not see an indexation clause as appropriate to the era of Economic and Monetary Union.
In September 2000, after the dispute over new legal rules on the "general validity" of collective agreements had been resolved (FI0009161F), the Finnish social partners and government started preparations for a wide-ranging collective bargaining, or "incomes policy" round (FI0009157F). After the sectoral bargaining round in spring 2000 (FI0004142F), there are chances of a return to a more coordinated approach for 2001 and beyond. However, the Paper Workers' Union (Paperiliitto) has announced that it will hold to the wage bargaining timetable laid down in the paper sector's current three-year collective agreement, concluded in April 2000 (FI0004145N). This means sector-level bargaining over pay increases for 2001 and 2002 in January 2001 (FI0010162N).
Trade union demands
The trade union confederations - the Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK), the Finnish Confederation of Salaried Employees (Toimihenkilökeskusjärjestö, STTK) and the Confederation of Unions for Academic Professionals (Akateemisten Toimihenkilöiden Keskusjärjestö, AKAVA) - have set "qualitative" reforms as a goal in the bargaining round, in addition to wage increases. Unions consider it important that the current positive growth in employment will be improved further. To support this aim, and in an effort to highlight issues concerning lifelong learning, SAK advocates a so-called "employment and training package". The goal is to implement the third phase of the training guarantee scheme - which aims to provide funding for people in employment to undertake vocational training courses on their own initiative (FI0002134N) - by increasing the resources for adult training.
SAK and STTK aim also to improve workers' ability to "cope" at work (FI9911127F). This could be supported by better workplace-level management-union cooperation. Further, they would like to improve the operational capabilities of shop stewards. Another trade union objective is that the "job rotation" sabbatical leave scheme (FI9704110F) should be made permanent. SAK would like to promote the reconciliation of work and family life, while STTK wants a 30-day period of leave for fathers, in addition to the present 18 days .
In order to help those workers caught in a continuing spiral of fixed-term contracts, SAK recommends that such contracts be further regulated and that rules be laid down as to the minimum working hours. SAK also wants to guarantee the right of temporary workers to annual leave. A common wish of the unions is that the control of overtime work should be made more effective. Furthermore, working time should be cut by making the Saturday of Ascension Day week a paid holiday. STTK would like to solve the problem of overtime work by means of working time accounts.
At this stage, the unions are not putting forward any concrete demands for wage increases. SAK is seeking, in addition to an across-the-board flat-rate increase, additional increases at sector level and an "equality increment". STTK also wants an across-the-board flat-rate increase, sectoral rises and a specific increment for women. Both advocate an indexation clause which would guarantee an increase in purchasing power in the event that inflation is higher than estimated (FI0010165F). SAK aims to reach an agreement on the rules for collective bonuses linked to company results and profits. STTK hopes for an increase in personnel funds (a form of profit-sharing scheme). SAK is seeking a two-year agreement and STTK a three-year deal.
AKAVA is seeking percentage wage increases with an indexation clause, a separate increment for education and training purposes, equitable tax cuts, and measures to promote the ability to cope at work. This organisation is in fact advocating a completely new form of agreement. A basic wage increase would first be decided on at the central level in a framework agreement, in terms of a percentage of the total paybill of all sectors. It would then be possible, through sector-level negotiations, to determine exactly how this total increase would be shared between and within the various sectors. However, in the event that the sectoral negotiations yielded no result, the basic percentage increase would be applied to all. On the qualitative side, the AKAVA list of demands includes a continuation of the job rotation scheme and a working time account, as well as the reconciliation of work and family life. Further, the organisation supports the implementation of the third phase of the training guarantee scheme. It believes that a new agreement could run until autumn 2003.
Employers' goals
The employers are seeking a long-lasting, moderate agreement which would be appropriate to the Economic and Monetary Union (EMU) era and would bring predictability to the economy. Their aim is that agreement on qualitative issues should be reached more at the workplace level. The Confederation of Finnish Industry and Employers (Teollisuuden ja Työnantajain Keskusliitto, TT) wants to achieve the kind of agreement that would guarantee an adaptation of Finnish labour costs to the same level as those in other EMU countries. The agreement should last several years, making it possible to lower taxes, and should cover the whole labour market. What the organisation fears most is wage inflation caused by domestic factors. According to TT, a return to the world of indexation clauses (common in past agreements) would be a completely wrong basis for agreement.
The Employers' Confederation of Service Industries (Palvelutyönantajat, PT) aims for an agreement of almost three years' duration, that would take into account the unexpected changes of the past year. The organisation also hopes for larger tax cuts than promised in the current government programme. In addition, PT wants to decrease employers' costs in the name of creating employment. As for wages, PT assumes that the differences in productivity between sectors would be taken into account, and that room should be allowed for a workplace-level wage policy. The organisation rejects the idea of separate pay increments or commitments, as these would lead to a wage development that would weaken the profitability of various sectors. Management should retain the right to decide on company-specific result- and profit-related bonuses. Concerning the overall development of working life, PT seeks a continuous negotiating procedure. The organisation would like to guarantee resources for education and training at all levels. Annual working time should not be cut.
The Commission for Local Authority Employers (Kunnallinen Työmarkkinalaitos, KT) aims for a moderate incomes policy agreement lasting several years, which would help promote a positive economic development in municipalities and, at the same time, safeguard the necessary welfare services and help in recruiting the new personnel needed for their provision.
Commentary
Judging from the demands presented so far, it can be concluded that the incomes policy negotiations will not be easy. The employer side is rejecting a qualitative development of working life to be implemented through agreements at the central level, and is trying to shift this activity to the workplace level. In previous incomes policy rounds (FI9801145F), such qualitative developments have been "buried" in working groups, whose results have not exactly been earthshattering. In this round, working time arrangements, ability to cope at work and education and training issues are likely to come to the forefront. The trade unions will endeavour to achieve generous pay increases while economic growth is still rapid. It is estimated in some quarters that the level of annual increase will be around 2%-3%.
The unions' common goal of obtaining an indexation clause as a precaution against unexpectedly high inflation, in order to guarantee purchasing power, may prove to be a complicated bargaining issue during this round. According to the present schedule, the new agreement is due to be negotiated in November. (Juha Hietanen, Ministry of Labour)