SAK's Lyly proposes a common minimum pay rise demand for the new bargaining round

(Helsinki 01.09.2010 - Juhani Artto) SAK's President Lauri Lyly wants trade unions to have a common minimum demand in the upcoming negotiations on wage and salary rises. He outlined this initiative last week during a SAK seminar. Several trade union leaders reacted positively to this proposal on hearing it but the overall tone was rather cautious.

Lyly's initiative may be seen as a reaction to the somewhat mixed experiences from the previous round of collective bargaining that came to an end in May 2010. The round in question was marked by the very noticeable and strenuous intervention of the leading employer organization, the Confederation of Finnish Industries EK. It sought to use an iron-fist in an attempt to steer its member organizations - especially in trying to keep wage and salary rises below the 0.5 per cent "pay anchor", as defined by EK itself.

On the union side there was a certain degree of coordination during the bargaining process but not approaching anything like what was orchestrated by EK. EK's "pay anchor" was exceeded in the agreements but still the tough stance it took clearly had an impact on the agreed low level of wage and salary rises. However, one must also remember that there were even more important factors, such as the 8 per cent dip in gross national income.

In August 2010 when the new round of collective bargaining had barely begun EK again hastened to announce the maximum pay rises it regards as reasonable. Wages and salaries should not be increased by more than one per cent which would be the maximum, EK insisted.

Union leaders were quick to dump EK's criteria on limits. They pointed out that inflation is accelerating, taxes rising and the economy reviving. Just before EK's announcement, employers in the technology industry agreed with the Metalworkers' Union on a 1.5 per cent pay rise. Soon after the announcement the Electrical Workers' Union signed two agreements that raise wages by 1.2 per cent and in addition gives electricians a lump sum of 120 euros.

Lyly did not mention any concrete figure as a proper minimum demand for the wage and salary rises. According to him unions and confederations should first consider the proposal in principle, and if the reaction is positive, then concretize the demand in mutual discussions.

Pay rises should maintain the purchasing power of wage and salary earners and safeguard equal pay development, Lyly explained. In addition rises should be linked to the strength of the national economy and take into recognition changes of inflation, employment and productivity, he expanded.

Lyly expects unions to consider also whether the minimum targets should be defined commonly for all or should the targets be industry-specific. A further question is how tightly unions should commit themselves to such common goals. Furthermore: What kind of solidarity should unions be prepared to offer a union that is not able to reach the common minimum demand?

In their first reactions a few union leaders, such as Timo Räty and Matti Harjuniemi, the Presidents of the transport and construction workers' unions, have expressed their readiness to reach these common goals and to consider use of industrial action.

Among the factors that make it difficult for the unions to cooperate in the new round of collective bargaining is the wide time gap between the bargaining periods in various industries.