Accord reached in Finland on pay increases next year

The outcome reached late on Sunday night settles pay rises for the third year of the pact for employment and growth. This general settlement signed in October 2013 was the basis for a pay rise of EUR 20 per month in the first year and 0.4 per cent in the second year.

Lauri Lyly, President of the Central Organisation of Finnish Trade Unions (SAK), stresses that the flat-rate increase included in the pay settlement for the third year will sustain the purchasing power of low and middle-income earners.

"In practice the flat-rate pay rise will affect employees earning under 3,720 euros per month. Anyone earning more than this will get a percentage increase."

The centre-right coalition government of Prime Minister Juha Sipilä appointed in May had already announced that it would cut taxes for low and middle-income earners if a national settlement was reached on pay rises in the third year of the pact for employment and growth.

In addition to pay increases, the national labour and employer confederations agreed on an increase in unemployment insurance contributions. These payments are shared equally by employers and employees, and will rise by 0.5 percentage points on both sides of industry. The employee’s unemployment insurance contribution is currently 0.65 per cent of gross wages, and will therefore rise to 1.15 per cent next year.

The pact for employment and growth covers more than 90 per cent of employees in Finland, affecting the earnings of about two million people.

The Finnish Transport Workers’ Union (AKT) and the Finnish Seamen’s Union (SMU) opposed the third-year wage settlement at a meeting of the SAK Executive Board.