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Minister Paatero resigns over Posti outsourcing scandal

Paatero had offered to resign after it emerged she had failed to prevent a pay cut for 700 workers.

Sirpa Paatero
Sirpa Paatero Image: Heikki Saukkomaa / Lehtikuva

Finland’s Minister for State Ownership Steering, Sirpa Paatero, has resigned after it emerged that she had failed to act to prevent a state-owned company from cutting the pay of around 700 workers.

Prime Minister Antti Rinne announced her resignation at a press conference on Friday after a war of words between senior politicians and the management of Posti, the state-owned postal company.

Rinne also accused Posti's management of giving misleading information about the plan to cut the 700 workers' pay.

He announced that Paatero would take sick leave until 13 December. The government was yet to announce her successor in the challenging state ownership portfolio.

Outsourcing contradictions

On Thursday SDP leader Rinne had stated in parliament that his party colleague Sirpa Paatero had opposed plans to cut the pay of some 700 workers.

"The Posti board proposed that Paatero accept decisions to move 8,100 people to another company on 1 November, and that 700 parcel sorters be moved to a different collective agreement on 1 November," said Rinne during parliament’s weekly question time.

"Minister Paatero made it clear that this was not acceptable to the owner. After that discussion Posti changed the situation and 700 people were transferred. That was against the owner’s clearly-expressed wishes."

On Friday, the chair of the Posti board Markku Puhjola released a statement denying that Posti had concealed its plans.

"As has been public knowledge, Posti informed the minister of our outsourcing plans during the preparation stage," said Pohjola.

"If the owner had a different opinion and had made that known, we would have absolutely reacted to that, even though this is a matter to be decided by the company’s board."

Different agreements

PAU leader Heidi Nieminen had also told Yle she had tried to inform Paatero and the state ownership steering unit, speaking to officials or advisers in the minister’s circle. Paatero said that she had not received or heard about those calls.

The postal strikes that came close to paralysing Finland this year were sparked by the state-owned postal firm Posti’s decision to reduce the pay of those 700 parcel sorting office workers.

They did this by transferring them to a different collective agreement than the one covering most Posti staff, and the move threatened to collapse the entire wage-bargaining round.

Union PAU refused to agree a deal for the company’s 10,000 workers until the fate of those 700 parcel sorters was resolved.

In the end the dispute became political when Rinne and Paatero made conflicting statements on when they heard about Posti’s plans and how fiercely they were opposed.

The issue is especially sensitive for the union-backed social democrats in general and Rinne in particular, as he was a trade union leader before he won the leadership of the SDP.

The dispute was eventually settled when Posti agreed to allow the 700 workers to retain their current pay package.

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