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Main business lobby opts out of nationwide collective bargaining process

The private sector business lobby EK says it has decided to opt out of negotiating economy-wide pay agreements. The Transport Workers' Union AKT responded Thursday by backing off from any concessions to employers aimed at boosting competitiveness for export industries.

Matti Alahuhta Ykkösaamun vieraana 21. helmikuuta.
EK chair Matti Alahuhta said that employer organisations want more autonomy to negotiate terms and conditions of pay with employees. Image: Yle

It has long been a tradition in Finland that every two years tired men gathered in a conference room and hammered out a deal that decided on pay rises for more than 90 percent of the labour force.

They emerged bleary-eyed in the early hours of the morning to tell the waiting journalists--and the country at large--what they'd decided. That process has now been consigned to history.

On Wednesday the Finnish employers lobby, EK, decided to relinquish its right to negotiate economy-wide agreements on pay and conditions.

EK: Company-level agreements also possible

EK chair Matti Alahuhta said that his member organisations wanted to take more of the responsibility themselves. Some agreements could even be made at the individual company level.

He said Finland was only following the Swedish model, but unions criticised his plan as an attempt to weaken their negotiating position. White collar union boss Antti Palola said it would make it harder to mandate gender equality in salaries.

It also marks a move away from the model established forty years ago, when unions and employers thrashed out a deal to manage incomes after a swingeing 31 percent devaluation of the Finnish mark.

That helped exporters boost their sales, but since Finland adopted the euro that option is no longer available. The EK said it wants to help exporters through pay restraint instead--and sees local contracts as the best way to do it.

Transport union opts out of "social contract"

The process received another blow Thursday, when the Transport Workers' Union AKT said that it also plans to opt out of any so-called social contract in the labour market targeted at a 5% improvement in the nation's competitiveness on international markets.

The organisation also said that it will prepare for union-specific negotiations from 2017 - and will not participate in talks aimed at zero-pay increases or discussions on indexing pay hikes to the export sector.

Meanwhile, Lauri Lyly, the head of the largest trade union confederation SAK, said that he was keen to hold on to the traditional nationwide collective bargaining process.

Lyly said that the AKT’s announcement had taken him by surprise and that an SAK committee would evaluate the situation given the transport union’s decision.

However he sstressed it was still worthwhile for employer and employee representatives to gather for those marathon meetings that helped determine the conditions – and the pay – that workers could expect from their employers.


This report was edited at 6:36 PM, 26/11/15, to more accurately reflect details of the position taken by the Transport Workers' Union AKT.

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