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News article

Principal points of the framework agreement

Consolidated incomes policy settlement

The Executive Board of the Central Organisation of Finnish Trade Unions (SAK) has 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 settlement forms 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.

Framework agreement 2011-2013 (pdf)

Agreement period and wage increases

  • Contractual increases will total 4.3 per cent over the agreement period, with an increase of 2.4 per cent for the first 13 months and 1.9 per cent for the following 12 months.
  • The costs of the agreement have been specified for two periods of 13 months and 8-14 months, depending on the agreement periods and the timing of wage increases in various collective bargaining sectors. This flexibility will enable harmonised agreement periods.
  • The wage increase percentages of the framework agreement incorporate the rise in payroll costs and any changes in terms and conditions of employment that have cost impacts. The distribution of increases will be decided in collective bargaining at individual union level. The national labour and employer confederations have prepared guidelines for managing any disputes over this distribution.
  • A non-recurrent wage element of EUR 150 will also be paid during the first agreement year to all employees with not less than 3 months’ service. The lump sum payable to part-time employees will be proportioned to their working time.

Improvements in general working conditions

  • The grounds for agency work and temporary employment will be reviewed and a proposal for legislative changes will be submitted accordingly by the end of March 2013.
  • The use of employment contracts with no enforceable promise of work or pay will be investigated.
  • The Act on Co-operation Within Undertakings will be amended to include flexible working hours, the grounds for temporary employment, and enhancement of employee vocational skills in human resources plans. The associated statutory amendment proposals will be submitted by no later than the end of November 2012.
  • Labour protection legislation will be revised to focus special attention on the strain imposed by shift work.
  • The use of working time banks will be studied, with associated legislative proposals submitted by no later than the end of November 2012.
  • The effectiveness of pay reviews will be studied with a view to promoting equal pay, forming the basis for proposing further measures by no later than the end of May 2012.

Employee security in enterprise downsizing and vocational expertise

  • Public authorities will allocate adequate staff to administering employee security in enterprise downsizing, with a view to initiating the associated procedures promptly.
  • The functions and role of the Education Fund will be revised, with proposals on its training accounts and reforms of the study leave system submitted by no later than the end of April 2012.
  • All employees will be entitled to three days of paid training leave annually. The system will be introduced on 1 January 2013.

Harmonisation of work and family life

  • Paternity leave will be extended by two weeks to a maximum of 54 days. This leave will have to be taken before the child’s second birthday and will not be linked to parental leave. The arrangement will extend the leave and bring flexibility to its use. The division of costs will remain unchanged and the reform will take effect at the beginning of 2013.

Unemployment benefit

  • Periodisation of holiday compensation will be abolished as of 1 January 2013, thereby reducing the waiting period for benefit and accelerating the processing of claims.
  • The government will contribute to layoff allowances in a manner corresponding to the basic unemployment allowance.
  • The terms and conditions of the adjusted unemployment benefit paid to employees with reduced working hours will be changed as of 1 January 2012. The working hours threshold for adjusted unemployment benefit will increase from 75 per cent to 80 per cent.
  • Proposed government cuts in job alternation leave will be scrapped.

Improving trust in the job market

  • The parties undertake to promote good labour market practices, and an associated action programme will be prepared by the end of November 2012.
  • The national labour and employer confederations will set up a standing negotiating body to review the government programme and joint confederation projects, European Union initiatives, and economic and labour market policy.

Taxation and social insurance contributions

  • The increase in employee earnings-related pension contributions will be offset by a cut of 0.2 percentage points in income taxation in 2012.
  • The government will scrap a proposal to increase the unemployment insurance contribution of employees and employers by 0.2 percentage points in 2012.
  • Corporation tax will be reduced in 2012 by 1.5 percentage points instead of the planned cut of 1.0 percentage points.