Employment terms stretch, even on a quick schedule

News article

Teemu Hankamäki's troops negotiated raises for TEK members worth tens of millions of euros. Our collective bargaining system has also proven useful during the corona chaos.

Employees and employers may now deviate from the minimum requirements of the collective agreement. Most collective agreements for senior salaried employees contain a so-called crisis survival clause, which is applied when the coronavirus threatens people's jobs as well as their lives.

Based on this clause, employees and employers may deviate from the minimum requirements of the collective agreement by local agreement.

Speak openly and think of solutions

TEK's negotiations director and YTN's chair Teemu Hankamäki emphasizes the importance of discussion and genuine interaction in the times of corona.

– Speak openly and think of solutions that will allow us to curb the need to reduce the number of employees, Hankamäki suggests.

Hankamäki reminds members that if they get laid off, they can receive legal counselling and other services from TEK.

– I am also really pleased that the labour market organisations could quickly come up with a proposal for the government that reduces the costs of employing people, improves the social security of those who are being furloughed or laid off and adds flexibility to labour legislation, especially with regard to cooperation negotiations and furlough practices.

The proposal emphasised that companies would primarily opt for furloughs while avoiding terminations.

– The most crucial thing in this moment is to safeguard people's health and well-being while ensuring that companies can continue to operate.

According to Hankamäki, the collective agreements contain recommendations and instructions on remote work, for example, that are very applicable right now.

– Now if ever is a good time to agree to work remotely whenever the job tasks in any way allow it. Successful remote work also requires a high level of trust, dialogue and organisation between employers and employees.

The pay envelopes of workers grow thicker

This time around, the new collective agreements will bring TEK members an annual raise of some 1.6 per cent. This means that the calculated payroll of employees included in the agreements grows by 43 million euros. After deducting the share of membership fees, 12 million euros, the remainder comes to 31 million euros, which translates to over 750 euros per member.

– The raise is large enough to maintain the purchasing power of our members, or maybe it will even improve it slightly.

Hankamäki is almost overly moderate in his estimation and hastens to add that purchasing power depends on each individual's own behaviour, i.e., what people spend their money on.

The price of certain things rises more than that of others, and trade unions can do little about that.

– If a member of ours drives 50 000 kilometres a year in his diesel car and drinks and smokes profusely, then his purchasing power might not increase. Taxation will make sure of that.

Kiky struck some nerves

Collective agreements are temporary and lately they have been in effect for a period of two years. When an agreement expires, basically its entire contents are up for renegotiation. However, the basic text often remains largely the same.

Senior salaried employees are always seeking raises in their new collective agreements and they also bring other changes to the negotiation table. These are called text questions.

Senior salaried employees are always seeking raises in their new collective agreements

Text questions often concern details of employment conditions, such as how is travel time compensated for, how is salary paid during paternity leave or what are the rights and responsibilities of employee representatives (shop stewards).

The term "text questions" is labour market slang and slightly misleading, because often the text questions are actually questions about money. If paid paternity leave is extended, it results in additional costs to the employer. While improving the position of employee representatives may not increase costs, it reduces the employer's decision-making power.

Before the COVID-19 crisis hit, one issue rose above all others in the collective bargaining round that began last autumn. When the central labour market organisations negotiated the Competitiveness Pact in the previous collective bargaining round in the spring of 2016, few realised or admitted to knowing what kind of trouble it would cause a few years later.

The Competitiveness Pact extended the annual working time by 24 hours without any separate compensation for these hours. Trade unions and employers' organisations included these so-called kiky hours in their collective agreements in different ways.

The employee side tolerated the hours with some protest, until the employer side stated last year, on the cusp of the new collective bargaining round, that the kiky hours were an achieved benefit that would not be given up.

This statement made the employee side nervous because they felt that the kiky hours were a working time extension included in those particular collective agreements that would go away once those agreements expired.

A moderate compromise

Teemu Hankamäki thinks that the kiky issue has now been put to rest in the new collective agreements that have been made.

– The practice has ended. Instead, we have introduced expansions related to working time arrangements that please the employer side.

As an example of these expansions, an employer in the design sector may order 16 hours of paid working time extension if there is a special need for it. The reference periods related to working time monitoring have also been extended according to the employer side's wishes.

The employee side's wishes for a longer paternity leave and more comprehensive compensation of travel expenses fell on deaf ears.

– The changes to the collective agreements were very moderate with regard to the text questions. The reality is that in a round like the one we've had, the opportunity for progress wasn't there. Almost nothing that would have increased costs for the employers went ahead, Hankamäki says.

An unnecessary strike in December?

The new collective agreements adhere to what became the general stance in Finland. The stance became general when the employers said that raises exceeding 3.3 per cent would not be possible. The first parties to enter into a new agreement this time around were the employer organisation Technology Industries Finland and its employee counterpart the Industrial Union.

The employers pleaded in unison that they could only afford to give what export businesses could withstand. In the middle of the negotiations in mid-January, the conciliator general Vuokko Piekkala confirmed in an interview with Kauppalehti that: "because the Industrial Union and Technology Industries Finland are the first representatives to reach an agreement, according to existing practices their agreement will form the so-called general stance that is defended in the conciliation proceedings."

This was pretty much what happened. YTN member unions have since reached agreements where the total raises for the agreement period come to 3.3 per cent.

In retrospect, it appears that YTN's senior salaried employees in the tech and design sectors went on an unnecessary three day strike last December.

Salary issues were at a standstill

However, Teemu Hankamäki does not put up with the claim that a good strike went to waste and that senior salaried employees should rather have just sat by on the sidelines with their popcorn out while others did the dirty work.

– When the decision to take industrial action was made in late-November, we expected the train to start moving and that we would reach a beachhead before the announced strike would go on. If nothing else, the fact that the strike went on demonstrates that the leeway of the other agreeing party is always difficult to predict in any given situation.

According to Hankamäki, the negotiations were progressing well with regard to the text questions, but the salary issues were at a standstill.

– It is worth remembering that the initial agreement reached by Technology Industries Finland and the Industrial Union in the first days of January probably wouldn't have happened without all staff groups already having been on strike together. The employer side probably read the situation so that there was more to come in the future and that the smart thing to do would be to shake on it.

Hankamäki believes that the collective bargaining knot began to untangle for senior salaried employees as well because the employer side knew that the readiness for industrial action was there.

Most expensive work in the world

Most of the newly negotiated collective agreements will expire at the end of next year. According to Teemu Hankamäki, there are no hard feelings about this round of collective bargaining and that the air might have also been cleared in the process.

– Despite the long and difficult negotiation process, we ended up in the happy position where trust between the agreeing parties actually even strengthened. At the very least, YTN will have a good starting position to continue where we left off with the employer unions in a year and a half's time.

We should strive to compete with Switzerland rather than Romania.

Hankamäki thinks that forcing the employer towards the impossible by demanding large raises is not the wise thing to do, even if the possibility to do so is there.

– It makes no sense to aim for an agreement that has an impossible cost level.

What is the right cost level?

– I don't know. But I'm sure there are sectors where raises exceeding 3.3 per cent would have been possible. Of course, the coronavirus crisis has since put this line of thinking into question.

Hankamäki thinks that employers in Finland should focus on making the work conducted in Finland the most expensive work in the world instead of striving to make it cheaper.

– We should focus on commissioning and developing such work that is worth the most expensive salaries in the world, because that kind of work is also the most productive work in the world. We should strive to compete with Switzerland rather than Romania.

This article was published in the TEK magazine on 17.4.2020. When the magazine went to print, some collective agreement negotiations were still ongoing.

Uncertainty forces us to our limits

You would think that in a country the size of Finland all agreeing parties would know each other so thoroughly that the negotiators could handle the negotiations on time before the end of the agreement period and without the help of the conciliator general.

Teemu Hankamäki thinks that the largest obstacle to a quick and easy solution is the basic nature of negotiations: one can never be absolutely certain what one could gain unless the negotiations are adamantly seen through to their end.

– Both agreeing parties must leave the negotiations with the impression that there is nothing more that could be gained or agreed upon this time around. Outsiders can sometimes be left thinking that more could have been gained, and easily, but that's not how it goes. Negotiation tables, especially those involving the conciliator general, rarely produce winners. Usually the end result is a compromise that is a slight disappointment for both sides. Flexibility is required from both parties.

Hankamäki also reminds us that collective agreement negotiations have their own quirks when compared to regular commercial negotiations.

– When negotiating trade deals, one can always negotiate with someone else if the negotiations are not progressing. In collective bargaining the negotiating partner is always the same and both sides often want to reach an agreement. It is a question of the terms of the agreement, not about whether an agreement is made in the first place.

And that's not all.

– The fact that the negotiators have usually known each other for a long time brings its own special flavour to the matter, as many of the negotiation tactics one finds in textbooks go out the window.

YTN and JUKO are the working gloves of TEK members

In addition to being TEK's negotiations director, Teemu Hankamäki is also YTN's chair. YTN is the negotiating organisation of Akava trade unions.

– If the degree of union membership within a profession falls too low, the trade union is no longer representative and the employer may begin to wonder why they should negotiate with it. That is why union membership is important, Teemu Hankamäki says.

Among other duties, YTN negotiates the collective agreements of TEK members who work in the private sector with the employer unions. YTN represents a total of 170 000 highly educated employees and supervisors.

TEK members in the public sector are represented in negotiations by JUKO, which is chaired by Olli Luukkainen, the Chair of the Trade Union of Education (OAJ). The agreements negotiated by JUKO concern some 200 000 highly educated employees and supervisors working for such instances as municipalities, the state, the church and universities.

Why doesn't TEK negotiate on its own, Teemu Hankamäki?

– YTN is able to bring broader shoulders to the negotiations than TEK. The agreements are also made for all specialists and supervisors in a sector or company at once. It would make no sense for TEK to negotiate agreements only for its members while the Union of Professional Engineers negotiates only for engineers and the economist union only for economists. Here the cooperation of unions means strength.