Accord on incomes policy reached in Finland

Trade unions have two weeks to apply settlement in industry collective agreements

An accord was reached in negotiations for a comprehensive incomes policy settlement in Finland at about 9:00 on Monday morning. The final dispute over how the agreed wage increases would be represented in salary scales and wage guidelines was resolved over the weekend.

The Executive Boards of all three employee confederations - SAK, STTK and Akava have now approved the deal as an incomes policy settlement covering all sectors of the economy for the next two years.

The next stage will be for individual trade unions to meet their corresponding employer federations with a view to applying the new settlement in nationally binding collective agreements for each industry. These negotiations are scheduled for completion by the end of November. If the incomes policy settlement is respected in the terms of employment agreed for a sufficiently large number of negotiating sectors, then the comprehensive incomes policy settlement can be signed and will take effect.

The new settlement incorporates a reasonable outcome in terms of employee purchasing power and a package of qualitative measures with noticeably greater impact than in previous settlements.

The wage settlement

The average overall cost impact of the wage settlement will be 2.9 per cent in 2003 and 2.2 per cent in 2004. The wage rises are due to take effect across the board on 1 March in each of these years.

The overall approach of the wage settlement shows a reasonable degree of solidarity. The agreed general increase will follow a practice known as the mixed line, with a rise of x euros, but of no less than y per cent monthly (1 March 2003: 17 cents per hour or 28.39 euros per month, minimum 1.8%; 1 March 2004: 16 cents per hour or 26.72 euros per month, minimum 1.7%).

The settlement includes a union-specific element, to be 0.8 per cent in the first year and 0.5 per cent in the second. The wage settlement for the first year also includes an equality item of 0.3 per cent, payable according to the gender balance in various industries with a view to eliminating pay differentials between men and women.

Improved status for workers' representatives and labour protection delegates

A further point in the settlement ensures that workers' representatives and labour protection delegates will have access to modern facilities for their work, including computer hardware and software, Internet and e-mail connections. The financial compensation payable to workers representatives will also increase and labour protection delegates will have greater freedom in the use of their time.

Improved supervision of foreign worker employment terms

It is proposed that a special unit be established at the Ministry of the Interior to take charge of supervising the work permits and employment terms of foreign workers. The powers and resources of the labour protection authorities will also be increased in this area.

One further ambition is to examine the feasibility of criminalising the use of foreign cheap labour by the end of March. An accord was also reached on establishing a special working group to consider the status of foreign workers. Such a working group would be asked to examine such issues as whether trade unions could be authorised to initiate civil proceedings against the employer on behalf of a foreign employee following infringements of legally binding employment norms.

Minimum working hours, welfare at work and harmonisation of work and family life

The comprehensive incomes policy settlement also includes a provision on minimum working hours. Working shifts of less than four hours must not occur without a special justification or the expressed wish of the employee concerned.

The employee confederations were partially successful in their efforts to improve employee job security. The employer, employee and public authorities will in future have to prepare a joint "employment programme" for workers at risk of redundancy. The aim of this programme will be for the person concerned to be employed again soon, either by the same or another employer. No agreement was reached, however, on the original proposal to increase dismissal thresholds by settling up a form of employment termination fund.

An agreement was reached to extend rights to partial care leave whereby the parents of young children are entitled to reduce their working hours. The right to partial care leave and the associated financial benefits will be extended to the end of the child's second school year, compared to the present situation in which this right lasts until the end of the autumn term of the child s first year at school. A task force will also be established to examine and prepare proposals to improve the flexibility of working hours with respect to the needs of families.

The negotiators also agreed on certain projects to promote labour protection and occupational health care.

Other qualitative elements

The settlement also covered additional resources, improved staff training and further funding for vocational adult education for a programme to enhance the skills of the adult population lacking school qualifications.

It was agreed that some projects promoting wage equality between men and women should be continued and enhanced over the period covered by the settlement. The negotiating parties also issued a joint recommendation that collective bargaining by individual trade unions should allow for the gender implications of agreement provisions.

No agreement was reached on reducing working hours in continuous three-shift work or on the principles governing employee profit-sharing schemes.

Government measures

The Finnish government has promised to support the comprehensive incomes policy settlement with an employment package of its own. The package will be introduced later on Monday.