Employee and employer confederations negotiate on austerity measures

News article

Negotiations for a national labour market package begin after partial Government turnaround.

The Government has once again changed course with its confusing proposals for new labour market legislation. It is also asking the labour market parties to negotiate alternative solutions to the austerity measures put forward by the Government.

The Government has now decided to reverse its plan to reduce Sunday and overtime pay, replacing those measures with a 30 per cent cut in holiday pay instead.

Holiday pay is the 50 per cent bonus that is paid to almost all Finnish wage and salary earners for their annual vacation: for a six weeks holiday you get nine weeks salary.

The feedback the right-wing Government received for its original plans to cut Sunday and overtime pay was loud and clear. The plan would have meant cutting the incomes of low-paid workers for the most part, often part-time employed women working in professions like health care and services.

At the same time it would leave untouched those with better incomes and regular working hours. This was too much and too unfair even for some of those who had voted for the Government parties, in particular women.

To cut holiday pay will, however, be legally challenging. As it is not stipulated by law but included in the 300 collective agreements, the Government shall first pass a law giving holiday pay to all and then cut it by 30 per cent.

The other measures that the Government proposed earlier will remain in place. These include shortening annual leave, eliminating two bank holidays and making the first day of sick leave unpaid.

SAK propose to freeze wages

Prime Minister Sipilä has obviously begun to realise that Government interference in labour market negotiations will not work. He is asking the labour market organisations to draft a package which will have the same effect as the Government austerity measures. 

If this succeeds, the Government’s plans might be withdrawn. The Prime Minister is, however, sticking firmly to the goal he wants reached, a five per cent reduction in unit labour costs.