Outrage over collective redundancies at TeliaSonera

TeliaSonera Finland, the country’s leading telecom company, announced in February 2005 that it is to cut its workforce by up to 650 employees in order to increase its competitiveness. YTN and TU have condemned the measure on grounds that the company is highly profitability and as such it has no right to carry out large-scale collective redundancies on economic grounds.

On 11 February 2005, TeliaSonera Finland announced a set of measures to restructure its operations. The company aims at ameliorating its market position by reducing its annual costs by over EUR 100 million. Out of this sum one third are to accrue from savings in personnel expenses. To achieve this, it will begin negotiations with employee representatives on the termination of about 650 jobs on financial and production-related grounds. TeliaSonera Finland currently employs about 6,800 people in the country. It is part of the multinational TeliaSonera consortium, which has a total of 29,000 employees, mostly in the Nordic states. Its head office is located in Sweden.

Two unions representing TeliaSonera Finland’s white-collar employees, Union of Salaried Employees (Toimihenkilöunioni, TU) and the Federation of Professional and Managerial Staff (Ylempien Toimihenkilöiden Neuvottelujärjestö, YTN), reacted with condemning statements to the announcement of job cuts at TeliaSonera Finland. Furthermore, the regional unions of TU organized a half-day work stoppage at the Helsinki and Oulu offices of the company. The unions’ denounced the company’s right to effectuate large scale redundancies on financial and production-related grounds due to its high profitability. On the same day that the plans on job cuts were made public, the TeliaSonera consortium announced that it had achieved a record net income of EUR 1.43 billion in 2004 and that it proposes EUR 620 million of this to be paid out as dividends. TU believes that such a strong result combined with collective redundancies is not only unethical but may also be illegal. It announced that it plans to sue TeliaSonera on this account. According to TU, profitable companies are more and more often dismissing employees for economic reasons based on their right to do so as specified in the Employment Contracts Act. Legal action is needed to establish a more just interpretation of the act, it argues. The Employment Contracts Act stipulates that dismissals on financial and production-related grounds must be made 'on substantive grounds and for good reasons' and that following the dismissals work must decrease considerably and permanently.

In addition to denouncing the collective redundancies themselves, TU and YTN also criticise the Finnish government’s role in permitting them. The government holds a seat at the board of the TeliaSonera consortium and is its second largest owner after the Swedish government. Having this role, the unions insist that it should step in and put a stop to what they consider to be unethical business practices. The Minister of Trade and Industry, Mauri Pekkarinen, responded to these demands by arguing that the government is not in a position to affect the situation.

Another joint concern of TU and YTN is that Finland based employees of the consortium are subject to much weaker redundancy protection than those based in Sweden. The redundancy period of the former is the statutory 14 days to six months whereas the latter are entitled to collectively bargained rights such as the entitlement to hold their jobs and receive full pay for a maximum of three years after the announcement of their dismissal. Finnish trade unions have sought improvements to workers’ redundancy protection for several years (FI0311203T) (FI0209102F). They have maintained that it is too cheap to cut jobs in Finland compared with most other EU countries and that this leads multinational companies to allocate their job cuts in Finland when they need to save labour costs. In the recent incomes policy agreement for the years 2005-7 unions achieved many of their objectives on improving the position of workers made redundant for economic reasons (FI0501203F). Legislation that is in accordance with the agreed measures is expected to be put into force by July 2005.

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