2002 Annual Review for Finland

The agreement also includes a general negotiation clause, a wage development clause and an index clause, meaning that wages must be increased by up to 0.4% if the rise in the consumer prices index from November 2002 to October 2003 exceeds 2.7%.

According to surveys published in summer 2002 by the Confederation of Finnish Industry and Employers (Teollisuuden ja Työnantajain Keskusliitto, TT) and the Employers' Confederation of Service Industries (Palvelutyönantajat, PT), merit pay - defined as variable pay linked to criteria such as company profits or results - has become widespread in Finnish companies, which plan to extend it further (FI0208101F). Trade unions was keen to agree on the 'rules of the game' for merit pay in the 2003-4 incomes policy agreement, but employers rejected this idea

Working time

The 2001-2 national incomes policy agreement provided that Ascension Day would become a national paid public holiday in 2002, for those employees who did not already have a holiday on this day. This did not include shiftworkers. The agreement contained no other concrete provisions on working time issues. However, it set up a working group on working time, on the basis of whose work the social partners issued a joint statement on good working time practices in spring 2002 (FI0205101N). It states that the activities of companies and 'working communities' are being steered increasingly by the expectations of customers and markets. These requirements should be taken into account in questions of working time. At the same time, the individual needs of employees in connection with reconciliation of work and family life must be considered. Additionally, according to the statement, the various aspects of working time protection are important for the health and safety of employees. The purpose of the statement is to stimulate increased discussion between employers and employees concerning potential ways to develop working time. The central social partners put forward their joint view that such dialogue should be part of the normal cooperation at the workplaces, helping to find new working arrangements and to solve possible problems. The statement thus reinforces the trend towards local-level agreements in Finland.

A consensus was reached in the framework of the new 2003-4 central agreement that daily working times of under four hours should not be used if there are no specific grounds for this, or if the employee objects. There was to be further discussion on the subject in the sectoral bargaining to implement the central agreement. Furthermore, a commitment was made to control working hours more effectively. A working group will examine ways of making working time arrangements more flexible in order to meet family needs, and make proposals on the issue. The working group will also examine the use of working time accounts.

Job security

A central goal of the trade unions in the negotiations over the 2003-4 central agreement was to obtain greater financial compensation for employees who are made redundant (FI0209102F), claiming that the cost for employers of making employees redundant in Finland is among the lowest in Europe. They were not successful, but instead it was agreed that an 'employment programme' for workers threatened by redundancy should in future be prepared in cooperation between employers, employees and public authorities. The aim is to ensure that redundant employees will be able to find a job quickly, either with the same or another employer. In addition, the period of increased income-related unemployment benefit will be extended from 130 to 150 days for employees with 20 years’ employment.

Equal opportunities and diversity issues

The 2001-2 central agreement contained an 'equality allowance' of 0.4% to be used at sector level to improve the position of women and lower-paid workers. Similarly, the 2003-4 central agreement contains an 'equality increment' of 0.3% from 1 March 2003, to be used for improving gender wage equality. The agreement also contains a commitment that projects promoting equal pay will be continued and made more effective during the life of the accord. In addition, the central social partner organisations recommend that the gender effects of collective agreements should be evaluated in the forthcoming sector-level negotiations.

The 2003-4 central agreement also provides that the 'partial care' leave scheme - whereby parents of young children may reduce their working hours - will be extended to cover a child's first years at school.

Other issues

The 2003-4 central agreement deals with a range of 'qualitative' issues as well as pay. As well as those examined elsewhere in this review, these include:

• a proposal that a special unit for supervising the employment terms and work permits of foreign workers be established at the Ministry of the Interior by the end of 2003. Furthermore, the resources and rights of labour protection (health and safety) delegates in this area will be increased. By the end of March 2003, the situation as regards criminalising the use of cheap foreign labour will be clarified. The issue of foreign labour was prominent in 2002, especially in merchant shipping (FI0209103N); and

• an agreement between the parties that ongoing negotiations in between central incomes policy rounds should be strengthened.

Legislative developments

A new Occupational Healthcare Act came into force on 1 January 2002. It strengthens employee healthcare services in companies with the aim of enhancing the well-being of employees. (FI0201198F). The reform seeks to deal with changes in working life and the increased stress involved in work. The aim of the Act is to direct employee healthcare measures toward ensuring that the employees can remain longer in working life. The focus will be shifted towards promoting health and the ability to work and addressing issues concerned with working conditions.

Under the new Act, the employer must arrange employee healthcare services and must have a written action plan for them. The employer can provide the services itself or subcontract them. In the preparation of decisions on employee healthcare, the employer must cooperate with the employees or their representatives, who have the right to make proposals concerning the care. The Act also includes provisions on the handling and confidentiality of information. The employer and employee must give to the employee healthcare service any information on the work and workplace that is needed for evaluating and preventing any possible disadvantages caused by the work. The duty of the employee healthcare service is to inform the employer and employees of the dangers involved in the conditions at the workplace, including factors connected with stress at work. Information that should be kept secret cannot be passed on if the person concerned does not give permission for this.

A commission set up by the government with the task of reforming the Equality Act submitted its proposals in November 2002 (FI0212108N). The central goal of the commission's recommendations is to amend and complement the Act so as to bring it into line with EU legislation and European Court of Justice decisions, and to remedy problems and deficiencies in its application. The specific measures proposed include: an obligation on employers to promote equality; a strengthened ban on sexual discrimination; greater protection for employees complaining of discrimination against retaliatory measures by employers; a right for shop stewards to obtain wage information on employees from the equality ombudsman within two months of a request; and stronger enforcement of the obligation to draw up equality plans at the workplace, along with a requirement that such plans should in future include a statement on wages. Trade unions were largely in favour of the proposals, while employers were less enthusiastic

The organisation and role of the social partners

The year's main development in terms of the structure of social partner organisations came in March, when two blue-collar trade unions affiliated to the Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK) - the Chemical Workers' Union (Kemianliitto) and the Textile and Garment Workers' Union (Tekstiili- ja Vaatetustyöväen Liitto, Teva) - signed a letter of intent to merge (FI0204102N). It is planned that the new union will start operations in June 2004. With 51,000 members, it will be SAK's third-largest member union. The two unions plan to negotiate the details of the merger prior to signing an agreement in May 2003. The two unions have announced that, through this merger, they aim to increase their influence at both international and national levels. They intend to eliminate the overlap of functions, thus freeing resources and offering opportunities to make their activities more effective, besides creating space for new functions. The purpose is also to cut costs. The new union will have a new name and new rules, but present collective agreements and bargaining areas will remain in place.

Industrial action

No major strikes took place during 2002.

Employee participation

In the 2003-4 central incomes policy agreement, the social partners agreed to safeguard the career development and professional knowledge of workers’ representatives and labour protection (health and safety) delegates, and to provide them with up-to-date working tools (such as information technology). The minimum compensation for representatives will be increased to EUR 48 a month, and their possibilities for flexible use of time will be improved.

Preparatory talks took place in 2002 on national transposition of the 2002 EU Directive (2002/14/EC) on informing and consulting employees (EU0204207F) and Directive (2001/86/EC) on employee involvement linked to the European Company Statute (ECS) (EU0206202F). It is generally considered that the implementation of the former Directive will not have a significant impact on existing Finnish legislation in this area.

Telework

With regard to the agreement on telework signed in July 2002 by the EU-level central social partners (EU0207204F), which is to be implemented by the national social partners in the Member States (by July 2005), the SAK union confederation has informed its affiliates about the agreement. The general view is that the best way to implement the EU accord is a general bipartite agreement at central level, which can then be applied at sector level. The unions will presented a proposal for negotiations to the employers when all the necessary background discussions have been held. Implementing the EU agreement without legislation will be an innovation in Finland, where all EU employment law Directives have so far been implemented by legislation.

Vocational training

There was no specific response in 2002 by the Finnish social partners to the 'joint framework of actions for the lifelong development of competencies and qualifications ' agreed by the EU-level social partners in March 2002 (EU0204210F). However, training already features in bargaining. The 2001-2 central incomes policy agreement contained a number of provisions relating to training and skills development. It stated that measures would be taken to promote training, and that the government would play a particular part in this, specifically by increasing further education allowances by EUR 13.5 million. The 2003-4 central agreement provides resources to fund a programme to raise the level of 'know-how' among adult employees (FI0203103F). Some 10,000 students a year will be involved from the beginning of 2004. The basic amount of adult training benefit will be increased from EUR 440 to EUR 500 per month. Personnel training will be made more effective. Learning at work will be developed on a tripartite basis, and adult training will be covered by extra financing.

New forms of work

There were no significant legislative or bargaining developments related to new forms of work in 2002.

Other relevant developments

In November 2001, working groups involving the Finnish social partners, pension institutions and government agreed a series of pension and unemployment insurance reforms (FI0112170F). However, the deal left the controversial question of the basis for future retirement pension calculation to be decided by further discussions, with the choice between basing the pension on a person's earnings in their last 10 years at work (as at present), or over their whole employment history. The discussions over the pension calculation method continued in the relevant working group (FI0208103F). The process resulted in September in a compromise agreed by all the main social partner organisations apart from the Confederation of Unions for Academic Professionals (Akateemisten Toimihenkilöiden Keskusjärjestö, AKAVA) (FI0209107N).

Under the compromise, from 1 January 2005 pensions will be calculated on the basis of earnings over a worker's whole career. People who retire before 2012 may have their pension calculated on the basis of the old scheme (ie based on earnings in the last 10 years of employment), if the employment relationship from which they retire was already in place on 1 January 2005, and if the old calculation method is more beneficial to the employee. AKAVA believes that the compromise, whereby pensions will be based on pay over the whole career, does not take sufficient account of differences in careers - especially those of its members, whose pay tends to rise towards retirement. In AKAVA's view, the proposed scheme would affect better educated workers more than other groups. However, the government started to prepare new pensions legislation based on the proposal agreed by the other social partner organisations.

In September, a tripartite working group agreed on the continuation for another five years of the experimental 'job alternation' scheme, which enables employees to take a period of sabbatical leave while being temporarily replaced by an unemployed person (FI0209109N). The agreement increases the compensation for longer-serving workers who take leave, and introduces a requirement of 10 years' prior employment for entitlement to leave.

Finland's national programme for older workers (FI9708125F) - in which the social partners are central players - ended in March 2002 with a seminar to discuss its results (FI0204101F). Research indicates that the labour market position of people aged over 45 has been improved over the five years of the programme: their employment rate has increased and the average retirement age has been raised by a few years. Finland is considered as providing an example to the rest of the EU in terms of policies to deal with the ageing workforce.

Outlook

In general terms, industrial relations was relatively stable during 2002. 2003 is also set to be stable, due to the fact that the new two-year central agreement covers over 90% of wage earners. In political terms, the major issue of 2003 will be the parliamentary elections in the spring. (Juha Hietanen, Ministry of Labour)