Incomes policy negotiations gather pace

The negotiations for a comprehensive incomes policy settlement that began in Finland last week are now picking up speed. It is hoped that a final accord will be reached on or around the weekend of 20-21 November. The comprehensive incomes policy settlement should be signed by no later than the second week of December for Parliament to have enough time to enact associated changes in legislation, such as income tax cuts, that would take effect at the beginning of 2005. The trade unions in various industries must in turn be given at least two weeks to conduct their own negotiations before the national settlement can be signed.

Discussion has so far centred on "qualitative" issues, and actual pay talks have been deferred. The qualitative objectives of the national labour confederations include strengthening the position of employees in situations of workforce downsizing, increasing the liability of parties that lease or otherwise subscribe to labour without directly employing workers, introducing a generalised right of locus standi for labour market organisations and improving the operating conditions of elected employee representatives - see report of 3 November 2004. No real progress has been made on these questions so far, however.

The negotiations have also considered the structure of the eventual accord. Besides talks between the national confederations and continuous negotiation procedures, a model is being developed whereby certain issues could be devolved as confederation recommendations for detailed preparation at individual industry level. These questions would then be settled between the trade unions and employers' federations of each industry.

The negotiating parties have yet to announce their objectives for the forthcoming talks on pay and purchasing power. However, there has been some general discussion of wage structures. The employers have pushed strongly for an end to the principle of solidarity in wage policy and an increase in wage differentials. Negotiation objectives published on Wednesday by the Confederation of Finnish Industries (EK) call for various changes, including enterprise-level wage flexibility, minimised general pay rises and an end to the special allowances that are intended to reduce gender differentials and low pay.

SAK has strongly defended the principle of solidarity in the wage model, which ensures that the basic pay of all employees is increased in uniform proportion. This principle of solidarity has improved fairness, promoted pay equality between the sexes and served as a significant success factor for the Finnish economy. It has brought stability and predictability to the national economy while adjusting to changes in the business cycle and in individual industries and businesses. SAK believes that greater flexibility could be achieved at enterprise level through productivity bonuses, provided that ground rules are first established in this area.

More information about the incomes policy negotiations in Finnish: www.sak.fi/tupo.