Two-year consolidated incomes policy settlement emerging in Finland

Following a break of several years, the main confederations of labour and employers in Finland are now formulating a consolidated incomes policy settlement. The Executive Board of the Central Organisation of Finnish Trade Unions (SAK) today approved a negotiated settlement on a framework agreement to protect employment and ensure competitiveness. The governing bodies of the other national labour confederations have also approved the negotiated settlement.

The framework agreement incorporates substantial qualitative improvements in working conditions, together with wage increases for the two-year period.

SAK President Lauri Lyly explains: "The agreement includes significant initiatives for improving the world of work. Employees will be able to take three training days annually to improve their vocational skills. Those over 55 years of age will also be able to use these days to promote their working capacity. The maximum period of paternity leave will be extended by two weeks. There will also be enhancements in labour protection, unemployment benefit will be improved and simplified, and some anomalies in casual and agency employment will be rectified."

The framework agreement eliminates the practice of periodising holiday compensation, so that outstanding holiday compensation paid when a job ends will no longer delay eligibility for unemployment benefit. There will also be improvements in the system for adjusting the benefit payable when an unemployed worker secures short-period or part-time work. These reforms will have a particularly significant impact on the situation of temporary employees.

An agreement to protect purchasing power

The wage increase section of the framework agreement specifies two wage periods. The first of these will last for 13 months with wages increasing by 2.4 per cent, followed by a second period of 12 months with a wage increase of 1.9 per cent. There will also be a lump sum payment of EUR 150, increasing the total wage cost impact to about 2.8 per cent. The impact will be about three per cent in many sectors organised by SAK.

The lump sum payment will disproportionately benefit the low-paid.

The framework settlement will now form the basis for union-level collective bargaining seeking to apply the agreement in various industries. The final accord will only take effect if these sectoral negotiations result in very broad coverage. This will be assessed on 25 November.

A consolidated incomes policy settlement was last applied in Finland in 2005-2007, with collective bargaining only conducted at individual union level after this settlement expired.

<style>table.taulukko#id11099364 { border-left-width: 1px; border-top-width: 1px; border-right-width: 0px; border-bottom-width: 0px;}table.taulukko#id11099364 th { border-right-width: 1px; border-bottom-width: 1px; border-left-width: 0px; border-top-width: 0px;}table.taulukko#id11099364 td { border-right-width: 1px; border-bottom-width: 1px; border-left-width: 0px; border-top-width: 0px;} th#id11099364_1 { width: 100%; } td#id11099364_1 { width: 100%; } </style><table class="taulukko" style=" background-color: #EBEBEB" id="id11099364" width="100%" border="1" cellpadding="5" cellspacing="1">

Main points of the consolidated settlement

• A wage increase of 2.4 per cent in the first year and 1.9 per cent in the second year.
• Employees will receive a lump sum payment of EUR 150 during the first year of the agreement.
• Employees will be eligible for three days of vocational skills training annually.
• Paternity leave will be extended by two weeks, and may be taken flexibly until the child&#;8217s second birthday.
• Eligibility for unemployment benefit will no longer be delayed by outstanding holiday compensation paid when a job ends.
• The working hours threshold for adjusted unemployment benefit will increase from 75 per cent to 80 per cent.
• The status of casual and agency workers will be improved.