Terms of employment in the commercial sector

(pdf-document: http://www.pam.fi/mp/db/file_library/x/IMG/13759/file/pocketguide%5fcommercialsector%5f07-10.pdf)

The terms of employment and pay conditions in the commercial sector depend on Finnish labour laws, on the collective agreement for the sector and on the individual employment contract. Trade unions negotiate collective agreements providing employee benefits that are higher than the legal minimum.

These negotiated benefits include a five-day working week, even though the Hours of Work Act only guarantees one day off per week. Other benfits that are negotiated by the unions in Finland but not included in the law include minimum wages, bonuses for special working hours, bonuses for certain working conditions, working clothes provided by the employer and holiday bonus.

The minimum terms of employment negotiated by Service Unions United - PAM for workers in the commercial sector are more favourable than the legally guaranteed minimum.

For further details of the agreed minimum terms and conditions of employment consult the full collective agreement or contact your workplace shop steward. You can also seek advice by telephoning the PAM employment advisory service on 020 774 2000 or by contacting the nearest regional office of PAM.

These advisory services and assistance are provided only to members of PAM in consideration of the membership subscriptions paid by these members.

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What is a collective agreement?

Service Union United - PAM has concluded a collective agreement for the commercial sector with the Employer’s Federation for Wholesale and Retail Trade. This agreement specifies the minimum terms and conditions of employment such as wages, working time, sick leave, annual leave, wages for the holiday period and holiday bonuses.

The agreement is generally binding; in other words all employers in the sector have a legally enforceable duty to ensure that their employees at least enjoy these minimum terms and conditions.

The wages should not fall below the minimum wages negotiated by PAM in the collective agreement. It is good to keep in mind that you cannot conclude an individual employment contract on weaker terms and conditions than those agreed upon in the collective agreement.

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What is an employment contract?

An employment contract is an agreement made by an employer and an employee. This agreement must provide at least the minimum benefits required by the collective agreement for the industry. It is also possible to agree on terms and conditions that are more generous to the employee. Although the employment contract need not be in writing, it is wise to do so.

The collective agreement for the commercial sector includes a model employment contract for work in the sector.

Pre-printed employment contract forms are also separately available from the union office or on PAMs website.

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The main terms of the collective agreement

Fixed-term employment contract

• may only be made on justified grounds or on the employees initiative
• if there is a lack of justified grounds the contract is considered to be indefinite
• neither party can give notice

The trial period

• may be agreed in the employment contract
• for no longer than 4 months, but
• for no longer than half of the duration of a temporary job
• the employment may be terminated during the trial period with no period of notice and no need for specific or serious grounds

Working time

Hours of work may be arranged so as not to exceed 37,5 hours in any week and 9 hours on any day. Other arrangements of working hours may be agreed at individual workplaces.

Hours of work balancing system

• balancing of working hours over a period of 2–26 weeks
• average hours of work for the balancing period must not exceed the weekly working hours specified in the individual employment contract
• working hours must not exceed 9 hours on any day or 48 hours in any week
• these working hours must be scheduled in advance

Minimum length of work shift

Work shifts must not be shorter than four hours, except when this is due to the individual needs of the employee or where some other justified reasons require a shorter work shift.

Days off

In addition to the statutory day off, the employee is entitled to one additional day off each working week under the collective agreement. The employee’s hours of work are also shortened to compensate for weekday public holidays.

Reduction of working hours for weekday public holidays - sales assistants and warehouse workers:

Hours of work are reduced to compensate for

• Good Friday
• Easter Monday
• Ascension Day
• Midsummer’s Day

Hours of work are also reduced to compensate for the following public holidays when they fall on a day between Monday and Friday:

• New Year’s Day
• May Day ( 1 May)
• Finnish Independence Day ( 6 December)
• Christmas Eve
• Boxing Day

The reduction in working hours is arranged by granting a day off:

• in the week including the weekday public holiday
• during the two preceding weeks
• during the two following weeks
• in the hours of work balancing system

Reduction in working hours for weekday public holidays (for those who work less than 37,5 hours)

• reduction granted  as cash compensation or paid time off
• calculated by dividing the weekly hours of work specified in the employment agreement by five

Weekend days off

• at least 12 Fri-Sat, Sat-Sun or Sun-Mon combined days off per calendar year
• this may be agreed otherwise at individual workplaces

Meal breaks

A meal break of at least one hour must be arranged when regular working time exceeds 7 continuous hours a day.

It may be locally agreed to:

• reduce the meal breake up to 30 minutes
• eliminate the meal break when a meal can be taken during working hours

No duties may be required during meal breaks.

Coffee breaks

Length of working day:

• under 4 hours: no coffee break
• 4–6 hours: 1 coffee break
• over 6 hours: 2 coffee breaks

If two coffee breaks hinder the working arrangements, then one longer coffee break may be provided.

Employees working continually at the cash register must then enjoy one additional break, during which they may be assigned other duties.

No duties may be required during the coffee breaks.

Sick leave

Length of employment	Paid sick leave entitlement
Under 1 month	50 per cent of the pay for the sickness insurance waiting period (1+9 days)
1 month	pay for the sickness insurance waiting period (1+9 days)
3 months	4 weeks
3 years	5 weeks
5 years	6 weeks
10 years	8 weeks

Unexpected illness of a child (under 10 years of age)

The employee is entitled to pay for any working days falling on 1-3 consecutive calendar days, provided that

• absence from work is essential to arrange care for child or to care for the child
• the employer has been notified of the absence immediately
• a medical certificate or other account of the illness that is acceptable to the employer has been provided
• another parent or guardian is unable to arrange care for the child or care for the child on account of paid employment and hours of work

Efforts are to be made to allow unpaid absence from work exceeding these three days if necessary.

Working clothes

The employer will provide working clothes for sales assistants and window dressers, and for warehouse and service station employees. The employer will continue to own and care for these garments. It may be locally agreed that the shop assistants care for their own garments in return for compensation.

Remuneration

Under the collective agreement, the factors influencing wages include occupation, duties, training, seniority, bonuses and the cost of living classification of the district were the work is done.

Consideration of training and work experience

The collective agreements include regulations on the effect of training and work experience on calculations of seniority.

Bonuses

Various other bonuses such as a language skills bonus, cold store bonus, working conditions bonus and inventory bonus apply to various occupational groups.

Sunday work

Double time is payable for work done on Sundays and Church holidays, Finnish Independance Day (6 December) and May Day (1 May).

Pay rates for students

• no less than 70 per cent of the wage of an employee in the 1st year of service
• may be paid to students at comprehensive school, senior high school or vocational institutes
• payable no longer than 2 months 
• these 2 months may accrue in the service of various employers
• at least trainee wage rates must be payed after these 2 months

Wages for the maternity- or adoption leave period

• for 3 months the difference between the wage and the maternity allowance stipulated in the sickness insurance act
• employment has continued for no less than 9 months before the beginning of the leave
• the employee returns to work from the family leave

Wages for the paternity leave period

• • for 6 days the difference between the wage and the paternity allowance stipulated in the sickness insurance act
• otherwise the same terms and conditions apply as for the maternity leave

Earning of annual leave

An employee earns the following number of leave days for each full leave-earning month, depending on how long the employement has lasted on 31 March:

• less than one year: 2 weekdays
• one year or more: 2,5 weekdays

A full leave-earning month (calendar month) includes:

a) work on no fewer than 14 days, or

b) work for no less than 35 hours

The 35-hour rule set put at point (b) is applied when there are fewer than 14 working days in a month according to the individual employment contract.

Wages for the holiday period

Employees paid by the month

monthly wage x number of leave days
___________
      25

A percentage of the bonuses paid is added to the wage for the holiday period. This is 10 per cent if the employment has continued for less than a year on 31 March and 12,5 per cent if the employment has continued for at least one year on 31 March.

Employees who work less than 37,5 hours

When the employment has lasted for less than a year by 31 March:

• 10 per cent of the wages paid for working time and certain absences

When the employment has lasted for at least one year by 31 March:

• 12,5 per cent of the wages paid for working time and certain absences

You will find more detailed regulations in the collective agreement.

Holiday bonus

Holiday bonus is 50 per cent of the wages for the employees annual holiday.

Periods of notice

1. When the employer gives notice of termination of employment

length of employment	period of notice
over 1 year	1 month
over 4 years	2 months
over 8 years	4 months
over 12 years	6 months

2. When the employee resigns

length of employment	period of notice
up to 5 years	14 days
over 5 years	1 month

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Wages

Wage classification

	until 30.4.2008	from 1.5.2008
Employee group	Level	Level
Sales assistant I	2	B1
Sales assistant II	4	C1
Warehouse worker	3	B2
Clerical employee A	1	A
Clerical employee B	2	B1
Clerical employee C	4	C1
Clerical employee D	5	C2
Clerical employee E	6	D
Cleaner	1	A
Service and transport station employee I	1	A
Service and transport station employee II	2	B1
Service station café employee	2	B1
Service fitter I	3	B2
Service fitter II	4	C1
Service fitter III	5	C2
Wholesale sales assistant I	6	D
Window dresser I	2	B1
Window dresser II	4	C1

Wage increases 1.10.2007–31.3.2010

• 1.10.2007: 3,5 %
• 1.5.2008: 2,8 %

In addition to the individual wages of employee groups sales assistants I and sales assistants II 30 €/month

• 1.5.2009 3,5 %

Helsinki, Espoo, Kauniainen, Vantaa Years of service 1 3 5 8	1	1	3	3	5	5	8	8
1	1433	8,96	1476	9,23	1573	9,83	1654	10,34
2	1465	9,16	1505	9,41	1609	10,06	1686	10,54
3	1517	9,48	1564	9,78	1670	10,44	1751	10,94
4	1572	9,83	1620	10,13	1743	10,89	1828	11,43
5	1630	10,19	1680	10,50	1812	11,33	1903	11,89
6	1691	10,57	1745	10,91	1883	11,77	2036	12,73
Cost of living zone I Years of service 1 3 5 8	1	1	3	3	5	5	8	8
1	1376	8,60	1413	8,83	1503	9,39	1577	9,86
2	1402	8,76	1441	9,01	1539	9,62	1608	10,05
3	1455	9,09	1500	9,38	1596	9,98	1668	10,43
4	1504	9,40	1549	9,68	1660	10,38	1737	10,86
5	1560	9,75	1605	10,03	1723	10,77	1807	11,29
6	1618	10,11	1684	10,53	1791	11,19	1925	12,03
Cost of living zone II Years of service 1 3 5 8	1	1	3	3	5	5	8	8
1	1354	8,46	1387	8,67	1476	9,23	1545	9,66
2	1378	8,61	1412	8,83	1508	9,43	1575	9,84
3	1426	8,91	1470	9,19	1564	9,78	1633	10,21
4	1474	9,21	1517	9,48	1623	10,14	1695	10,59
5	1529	9,56	1574	9,84	1683	10,52	1765	11,03
6	1586	9,91	1632	10,20	1748	10,93	1876	11,73

Pay scales 1.5.2008 – 30.4.2009 

Bonuses

Sales assistants	Evening bonus	Saturday bonus
Metropolitan area	4,09	5,34
Cost of living zone 1	3,91	5,16
Cost of living zone 2	3,83	4,98

Warehouse workers

Evening bonus 3,15
Night bonus 4,30

Saturday bonus
Metropolitan area         4,09        5,34
Cost of living zone 1     3,29        5,16
Cost of living zone 2     3,83        4,98

Service station employees	1.10.2007	1.5.2008
Evening bonus	0,94	0,97
Night bonus	3,10	3,19
Cleaners	1.10.2007	1.5.2008
Evening bonus	0,84	0,86
Night bonus	1,58	1,62
Caretakers	1.10.2007	1.5.2008
Evening bonus	3,15	3,24
Night bonus	4,30	4,42
Clerical staff	1.10.2007	1.5.2008
Metropolitan area	1,77	1,82
Cost of living zone I	1,67	1,72
Cost of living zone II	1,67	1,72