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Unions slam business lobby's reversal on expanding earnings-based jobless benefit

The EK says the coronavirus crisis has demonstrated a greater need for earnings-related unemployment security.

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Image: Tiina Jutila / Yle
Yle News

The Confederation of Finnish Industries (EK) has reversed its previous opposition broadening earnings-based unemployment benefits to cover all eligible workers -- but major union confederations were not impressed by the lobby group's new position.

In a press release issued on Monday, the business lobby said that the coronavirus crisis has shown the current system to be unfair, and that the benefit should no longer be tied to membership in an unemployment fund.

"The pandemic has underlined that earnings-related security is often not available to low-paid workers and that is why we need statutory earnings-related unemployment security," EK Director Ilkka Oksala said in the press release.

However, the press release called for changes previous proposals by the lobby group as the expansion of the current system may lead to a significant increase in costs as well as poorer employment conditions.

According to EK, these changes will ensure that the reform does not carry any additional extra costs or reduce the incentive to work.

The lobby also added that a centralised implementation of the reformed system, such management by Finland’s state benefits agency Kela, would be the most sensible solution.

The confederation’s announcement follows a similar reversal in policy by the National Coalition Party, as well as a call by Centre Party chair Katri Kulmuni for the system to be reformed.

Not in workers' best interests

Finland’s largest trade union confederation, the Central Organisation of Finnish Trade Unions (SAK), released a statement in response to EK’s announcement saying it "regrets" the change of position.

Organisation chair Jarkko Eloranta said he believes the change will make labour market negotiations more difficult in the future, and added that the proposed reform is not in the best interest of workers. He was also critical of EK's reference to "fairness" while simultaneously discussing the need for cuts to social benefits.

"This will affect people who are, for some reason, already at a disadvantage in the labour market. The current system and its development is in the employee's interest," Eloranta explained.

SAK believes the reform will lead to cuts in unemployment security, as the change is estimated to cost hundreds of millions of euros.

"If the unemployment security system is weakened, we will push for better protection from retrenchment," Eloranta said.

"Wolf in sheep's clothing"

Antti Palola, chair of the STTK labour union, responded on Twitter to the news of EK’s about turn by writing that he doubted the expansion of the current system could be financed by weakening earnings security.

"This change of mind is a wolf in sheep's clothing: it speaks of EK's desire to erode the safety of the unemployed in general," Palola tweeted.

In a separate press release issued by STTK on Monday, Palola further criticised the entire debate on the extension of earnings-related income.

"It is repulsive to listen to the speakers behind this initiative, who justify the extension of earnings-related expenses with "fairness" and fail to state the real motives -- the desire to cut the livelihoods of the unemployed," Palola wrote in the release.

In an interview with Yle last week, STTK’s Director of Advocacy Katarina Murto stated that the union considered the current system to be serviceable, but also acknowledged the need for further research into expanding unemployment protection.

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