Settlement reached in Finnish pulp and paper industry

The long dispute in Finland's pulp and paper industry came to an end today. The Finnish Paperworkers' Union and the Finnish Forest Industries Federation announced their approval of a settlement negotiated on Wednesday of this week. Measures will be taken to resume production at paper mills over the weekend. A lockout imposed by the employers in the industry had left the mills standing idle for more than six weeks.

The new settlement is based on the proposal made on Tuesday of last week by National Conciliator Juhani Salonius. This proposal was further adjusted during three days of intensive negotiations conducted at the beginning of this week. SAK President Lauri Ihalainen was also involved in this final stage.

The Delegate Council of the Finnish Paperworkers' Union approved the new deal unanimously at its meeting held this morning and afternoon. The deal covers about 24,000 employees.

Pay rises in the industry's new three-year collective agreement will comply with the national incomes policy settlement for the first two years. More than 80 per cent of the Finnish workforce is already covered by this national settlement. The payroll cost impact of the wage increase in the pulp and paper industry will be 2.5 per cent in the first year, but only 1.9 per cent in the second year. This is because the effect of the gender equality allowance agreed for the second year of the incomes policy settlement will be less noticeable, due to the high proportion of men in the industry. The wage increases will be divided as equal absolute hourly pay rises across the board, part of which may also be shared in other ways by local agreement.

The actual pay rises will take effect on 11 July 2005 and 12 June 2006. Wage increases for the third year of the new collective agreement will be negotiated separately in autumn 2007. The new agreement will continue until the end of May 2008.

Production in Finnish pulp and paper mills may continue all year round in future, meaning that mill shutdowns will no longer occur at Christmas and Midsummer. Industry employees will be compensated for this through reduced working hours. The annual reduction will be 8 hours in continuous three-shift work and 4 hours in discontinuous working hour arrangements. Compensation for work done over the Christmas and Midsummer holidays will also comply with existing industry regulations for reducing working hours and remunerating power plant, security and other work.

Particular difficulties were encountered in the closing stages of the negotiations in settling the conditions for using outside labour for permanent functions in pulp and paper mills. If no understanding can be reached on the use of outside labour in negotiations at production plant level or between the union and the employers' federation, then the question will be submitted for arbitration by the national labour and employers' confederations under the direction of an impartial chairman. Introduction of outside labour will then require a unanimous decision. The leaders of the national labour and employer confederations will meet again under the chairmanship of the National Conciliator in the middle of the term of the new agreement to review the effectiveness of this provision. If they are unanimous on the need to amend the provisions, then the new arrangements may also apply for the remaining term of the agreement.

The new settlement also frustrates several efforts by the employers to impair terms of employment in the industry. These efforts included introducing average working hours decided by the employer and four-shift working arrangements in summer. 12-hour shifts may be arranged at weekends only when this is agreed locally. A proposal by the employers to divide the annual holiday into several short fragments likewise forms no part of the final agreement. The layoff security of industry employees remains unchanged. Employer proposals on waiting periods for sick pay and other changes in the regulations on employee illness were similarly rebuffed. No further regulations were introduced on the industrial peace obligation and associated sanctions. The division of wage increases will also continue to be based on mutual agreement, despite the efforts of the employers to assume unilateral authority in this area.

The Finnish Paperworkers' Union announced its willingness to conclude a new collective agreement in line with the national incomes policy settlement back in the autumn. However, the Finnish Forest Industries Federation was not prepared to negotiate such a settlement in the pulp and paper industry, and instead brought several proposals to the negotiating table that would have substantially impaired the terms of employment of industry workers.