The Government also intends to strengthen Finland by restricting the right to industrial action, abolishing the job alternation leave system and adult education benefit, reducing the level of earnings-related unemployment security and abolishing the obligation to re-employ an employee in companies with fewer than 50 employees.
Employer unions have welcomed the proposed reforms with open arms. As Jussi Kärki, Editor in Chief of Talouselämä, wrote in the editorial of the magazine in the beginning of October: “Prime Minister Petteri Orpo (National Coalition Party) may receive a hero’s welcome this weekend at the National Entrepreneur Days in Pori. Out of their ten wishes, entrepreneurs were granted eleven in the Government Programme.”
Before this, CEO of Suomen Yrittäjät Mikael Pentikäinen stated in Turun Sanomat that, from a labour market perspective, we are looking at the best Government Programme we have had in ages.
In the same article, Managing Director of EK Jyri Häkämies described the main contents of the Programme as positive and said that EK has been waiting for new provisions on industrial peace for decades, as the legislation dates back to the year 1946. “While criticising these changes, the trade union movement should look in the mirror and ask themselves why they haven’t managed to bring about changes through negotiation,” Häkämies told the newspaper.
Labour Market Director Teemu Hankamäki from the Academic Engineers and Architects in Finland TEK, what does the mirror show?
“I’m worried and that’s what I see in the mirror. Häkämies apparently refers to the reforms concerning industrial peace, that is, the Government's intention to limit political industrial action to protests lasting no longer than one day, impose new personal fines for employees who continue a strike and increase the level of compensatory fines for unlawful industrial action. These measures treat the symptoms, not the disease.”
Hankamäki points out that industrial action that is deemed unlawful is almost always related to cooperation negotiations in workplaces.
“Walkouts are a symptom and a sign that it’s cheap and easy in Finland to downsize without having actual negotiations on how dismissals and lay-offs could be prevented. If on the rare occasion a senior salaried employee has walked out or walks out spontaneously, the fault does not lie with the industrial peace legislation, but company policy.”
Teemu Hankamäki is also the Chairperson of the Federation of Professional and Managerial Staff YTN. YTN is a negotiation organisation that is responsible for negotiating agreements on behalf of senior salaried employees in the industry and service sectors and organisations. According to Hankamäki, it is extremely rare for senior salaried employees to take part in unlawful action.
“Senior staff don’t really embark on unlawful strikes. The threshold for this is extremely high and, if this ever were to happen, the employer should be genuinely concerned about their local approaches and trust.”
Current negotiations resemble a shotgun wedding
In its Programme, Petteri Orpo’s Government promises that the reforms will be prepared on a tripartite basis, drawing on the expertise of businesses and employee organisations.
The plan is to implement the reforms that have been drafted together at the beginning of the government term so that the Government will bring the legislative amendments related to industrial peace to Parliament in early 2024.
The plan is to discuss legislative amendments related to local bargaining during the spring session 2024 and other reforms related to this package by the Government spending limits discussion in 2025.
The Academic Engineers and Architects in Finland TEK is taking part in the tripartite negotiations through its central organisation, the Confederation of Unions for Professional and Managerial Staff in Finland Akava. This is how TEK engaged in lobbying and contributed the expertise of the organisation e.g. to the negotiations of the industrial peace working group that completed its work in October.
“In practice, participation means that experts from TEK form a sparring group with the representatives of other Akava unions. The group provides support and help to the representative of Akava who sits in the tripartite negotiation group,” says Hankamäki.
The industrial peace working group also includes representatives from Local Government and County Employers KT, the Confederation of Finnish Industries EK, Suomen Yrittäjät SY, the Office for the Government as Employer, the Central Organisation of Finnish Trade Unions SAK, STTK ry and the trade union confederations (PSKJ).
However, according to Hankamäki, the current negotiations differ from many previous ones and also differ from what has previously been meant by tripartite negotiation.
“Before, tripartite working groups would negotiate how a specific matter should be provided for by law. Now, the process is more restricted, and the group simply looks for a solution as to how a matter, already set out in a fair amount of detail in the Government Programme, will be provided for by law.”
But you should still take part in the negotiations if you have been invited to do so.
“It’s slightly frustrating to see that we have no say in the substance of the legislation. On the other hand, it’s the duty of a representative organisation to try to reach the best possible outcome and, if you pull out from the negotiations, someone else will decide everything for you.”
How likely do you think it is that all the Government's intentions, mentioned above, will be fulfilled as they are?
“I find it highly likely that the plans will be fulfilled unless there are disputes within the Government itself. On the other hand, senior salaried employees can find a lot of positive things in the Government Programme. For example, the Government will reduce the tax on earned income and increase RDI spending, in line with TEK's goals.”
Akava, YTN, JUKO and TEK have clear roles
The Federation of Professional and Managerial Staff YTN is responsible for the collective agreements of senior salaried employees in the industry and service sectors. YTN has 20 Akava unions as members, through which it represents 180 000 experts and supervisors in different sectors. The majority, almost 90 per cent, of TEK members work in the private sector.
The rest are members of JUKO, the organisation that negotiates the terms of official and employment relationships in municipalities, wellbeing services counties, the state, universities and the Evangelical-Lutheran Church.
What is the role of YTN and JUKO in this labour market situation?
“YTN and JUKO negotiate collective agreements on behalf of employees and officials, so lobbying is carried out primarily in the name of Akava. According to the division of responsibilities agreed by Akava affiliates, such as TEK, Akava is responsible for influencing labour legislation and legislation governing social security. The same organisations and people work at Akava, YTN and JUKO, but this is how their responsibilities are divided.”
Akava obtains the funds for its operations from its 36 affiliates, one of which is the Academic Engineers and Architects in Finland TEK. TEK pays 14 euros per full member to Akava, or roughly 700 000 euros per year. In addition, TEK pays seven euros for every member working in the private sector, or about 300 000 euros to YTN and a few tens of thousands of euros to JUKO.
How can TEK members know and learn about the position and views of their organisation on current labour market issues?
“Nowhere as such, and that’s not necessarily a bad thing. It's not wise to make our position on every single little issue publicly available. This would only make labour market negotiations harder, because we would then be bound by our public positions regardless of what eventually happens during the negotiations or in the labour market.”
Akava, and therefore also TEK, has nevertheless identified four reforms in the Government Programme that the affiliates of Akava cannot accept.
Firstly, they cannot accept the enactment of a statutory labour market model under which the Government and politicians could interfere with salary negotiations.
Secondly, they are opposed to personal fines for industrial action. The Government has decided to propose a penalty payment for individual employees if they participate in industrial action which the Labour Court has deemed unlawful.
Thirdly, relaxing the grounds for fixed-term employment contracts is unacceptable.
Fourthly, the affiliates cannot accept the abolition of adult education benefit unless it is replaced with a new system that enables studying.
The Government has so far continued to pursue all four reforms.
Of all the central organisations, only Akava, the union for highly educated professionals, has stayed out of the protests. Why?
“Akava is ready to look for a balanced negotiation outcome, although we are definitely looking into other options as well. This was also the aim of the appeal that Akava presented to Prime Minister Petteri Orpo in mid-October. The members do not see everything that goes on, such as the fact that the people at Akava have gone through every possible politician to try to find some other way, one that involves negotiation.”
YTN has announced on its website that it does not accept the Government's way of trying to change the contract and negotiation system without adding balancing elements that improve the position of employees and that the political industrial action announced by SAK’s unions does not concern senior salaried employees.
Of the affiliates, the Finnish Medical Association has made a preliminary decision to take part in political industrial action, when necessary, if Akava or JUKO decide to arrange this.
In addition, the board of the Trade Union of Education in Finland OAJ has decided to move towards pressure measures.
Akava Special Branches also announced that its members may safely participate in the walkouts of other unions in their workplace.
The Board of the Social Science Professionals has made the decision to be prepared to take part in Akava’s political industrial action or walkouts, while exercising case-by-case discretion.
Why has TEK not taken a stand on possible protests?
“We stand behind Akava’s positions and we believe that we should start some kind of negotiation process on the labour market situation as a whole. It also appears that our members are generally not in favour of protests, at least not right now. We are certainly aware of the fact that some of the Government's proposals will inevitably weaken the position of employees. Some of our members believe that this is a step in the right direction, whereas others do not.”
The Academic Engineers and Architects in Finland TEK represents a wide variety of people. This was shown by a member survey conducted for TEK by Taloustutkimus. The survey identified five TEK member types: conservatives, world savers, materialists, success-driven people and universalists. Each group differs significantly from the others.
For example, the conservatives believe that TEK should supervise its members' interests in the labour market, because working on behalf of better terms of employment is the key. Materialists believe that TEK is not needed at all as a player in society, whereas universalists consider climate change a higher priority than economic concerns.
There is no Nordic model
Teemu Hankamäki is somewhat annoyed by the current Government's labour market statements. Government representatives have referred to Nordic practices which, according to Hankamäki, do not even exist.
“There is no Nordic labour market model. For example, there are no uniform policies for restricting industrial action in Denmark, Norway and Sweden. And if there’s any doubt concerning the interpretation of collective agreements in Sweden, the employees' interpretation takes precedence. Whereas in Finland, it's the employer's interpretation.”
Hankamäki wishes that the Government would give up partial optimisation in its labour market reform.
“As a member of TEK, I dare say that it's not such as bad idea: if we want to be more like Sweden, let's go ahead and take the entire Swedish model and see if it works. If we take only part of the model, the outcome will also be different.”
Hankamäki says that the same applies to expanding local agreement to all companies.
“When non-unionised companies are given the same rights to local agreement as unionised ones, all non-unionised companies should be ready to also accept the same responsibilities and practices. There is no reason to give non-unionised companies looser rights in terms of, say, the contracting party, than to the companies that conclude the collective agreement in question.”