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Union confederation accepts ’Finnish model’

The board of Finland’s blue-collar trade union confederation SAK met on Thursday and then announced that it supported the so-called ‘Finnish model’ of pay negotiations. The model ties pay increases across the whole economy to the fortunes of export industries.

Lauri Lyly.
SAK General Secretary Lauri Lyly Image: Yle

Labour market organisations have reached an agreement on how pay talks will in future progress in Finland. The government’s desire to increase competitiveness has led to what it calls the ‘Finnish model’, in which unions and employers agree to pay restraint when export industries are doing badly.

The deal applies even to the public sector, tying the fortunes of state and municipal employees to those of workers in sectors that sell products abroad.

According to SAK General Secretary Lauri Lyly, the heart of the deal is that pay and employment costs will be determined by four factors: productivity, public sector sustainability, employment and competitiveness.

"These four factors are those that set the framework for the whole deal, how we set the cost base from 2017 onwards," said Lyly.

The agreement comes off the back of the so-called competitiveness pact which was accepted by the majority of trade unions but not the industrial employers organisation, the EK. Nevertheless talks will continue until the summer, when a final decision on participation will be made by EK and the few recalcitrant unions.

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