Forest industry under fire for decision to quit collective bargaining

The PM and labour bosses criticised the industry's abrupt, unilateral withdrawal from the national contract system.

Ilkka Hämälä, board chair of the Finnish Forest Industries Federation (FFIF) and CEO of Metsä Group, at a press conference on 1 October. Image: Heikki Saukkomaa / Lehtikuva

In a surprise move, the Finnish Forest Industries Federation (FFIF) on Thursday announced that it would abandon collective bargaining in the Finnish labour market.

Rather than negotiating long-term industry-wide contracts with national unions, bargaining will be left up to member companies and their employees. Companies will agree directly with their workforces on salaries, shifts and working conditions that are not regulated by law.

The move is historic, as the forest products industry and the collective bargaining system have both been mainstays of the Finnish economy for decades. The Collective Agreements Act took effect in 1946, replacing one ratified in 1924, just a few years after Finland gained independence.

“We are building a new culture of dialogue, because we want Finland and the Finnish forest industry to succeed in the future as well. The different needs of companies in different situations can be better met when employment terms and conditions are decided upon at the company and product group level," said FFIF board chair Ilkka Hämälä, who is also CEO of Metsä Group.

All Points North looked at wage talks in Finland's labour market. You can listen to the full podcast via the embedded player here or via Yle Areena, Spotify (siirryt toiseen palveluun), Apple Podcasts (siirryt toiseen palveluun) or your usual podcast player using the RSS feed (siirryt toiseen palveluun).

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"A nationwide, inter-organizational contract system responds poorly to the needs of companies in different market and economic situations, in diverse business areas and individual factories," the association said in the statement.

According to industry calculations, its more than 150 factories in Finland employ some 140,000 people and generate one-fifth of country’s goods exports.

PM: Dashed hopes for "true common spirit" amid crisis

Prime Minister Sanna Marin, whose Social Democratic Party is closely aligned with the labour movement, expressed disappointment over the move on Twitter.

"I met with representatives of the FFFF in early September. The government was not given advance information about its withdrawal from collective bargaining procedures. Last week I also met with Petri Vanhala [chair] of the Paperworkers' Union. Based on that meeting, I had hoped that we were finding a true common spirit on behalf of our fatherland amid a crisis. The FFFF's announcement today tells quite a different kind of message," the premier wrote.

In late August, Marin criticised the closure of a profitable UPM paper mill in Jämsä, resulting in the loss of 450 jobs.

The Paperworkers' Union said on Thursday that it would continue to negotiate on behalf of its members on a company-by-company basis. It said the union's board would meet as soon as possible to evaluate the impact of the industry announcement.

Labour leader sees fundamental shift

Riku Aalto, president of the Industrial Union, said that the FFFF’s decision could lead to a broad upheaval of Finland’s labour market and contract agreements in general.

“If employers think that centralised labour market bargaining will end this country, I think that means that all these systems that we have built together – which are connected to unemployment benefits, or even pension benefits – then their continuation is also in doubt,” Aalto told Yle.