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Local agreements

Universally binding collective agreements safeguard the position of workers. They guarantee the minimum terms of employment, such as minimum wages, for employees working in the same sector. Alongside this, it’s possible to develop terms of employment through local agreements at the workplace level. 

Local agreements mean agreements at the workplace level on terms of employment or amendments to them. Terms of employment exceeding the requirements of the law or the collective agreement are always allowed, but local agreements on terms of employment that don’t meet these requirements are only possible if permitted by the law and the collective agreement.

PAM’s collective agreements offer plenty of opportunities for local agreements in terms of the time of payment of holiday pay, the start time of the working week, regular working time, the period of availability, weekend leave, working hours banks and many other aspects.

Fundamentals of local agreements

Three levels: chief union representative, union representative and the individual

Local agreements can be made at chief union representative level, union representative level or individual level. The collective agreement determines how local agreements must be negotiated.

Matters that concern permanent provisions and that apply to the entire staff are usually agreed at union representative level. These include working time adjustment systems and the time of preparing work shift lists. An agreement made by a union representative is binding on all workers represented by him or her. This usually means all workers in the workplace, not just trade union members.

Local agreements are voluntary

Local agreements are based on the freedom of contract. Neither collective agreements nor the law can oblige anyone to enter into agreements.

Employees and their representative have the right not to enter into a local agreement if the terms are determined unilaterally by the employer, in which case there is no actual agreement. Negotiations are an integral part of local agreements. After the negotiations, the agreement is either approved or rejected. An agreement is not established unless the parties reach agreement on its content, or unless both parties consider that they will benefit from the agreement.

Based on the law and collective agreements

The narrow definition of a local agreement means that the authorisation for entering into an agreement arises from the collective agreement. Agreement on terms of employment is based on legislation. Some labour laws do not allow deviation from their provisions to the employee’s disadvantage. Such provisions concern employment security, working time and safety at work, for example.

  • Negotiations are conducted concerning the agreement and its content.
  • In most cases, the parties involved are the employer and the union representative. In health and safety matters, employees can also be represented by the occupational safety representative. The parties to the agreement are usually specified in collective agreements.
  • The union representative must be aware of the employees’ opinion before entering into an agreement. The proportion of employees belonging to a trade union must also be sufficient in the company.
  • It is important to prepare carefully for negotiations. The impacts on employees of the matter in question must be identified before the negotiations, as well as its costs, among other aspects.
  • After the negotiations, the agreement is either approved or rejected.
  • An agreement may concern an individual matter, or agreements can be built gradually in the workplace so that new provisions are agreed in addition to old ones.
  • Local agreements can be fixed-term or valid for an indefinite period.
  • Agreements valid for an indefinite period can always be terminated. Notice periods are usually specified in the collective agreement.
  • The union representative must inform employees about the agreements made and their content.
  • Local agreements must be stored so that they can still be found years later.
Last updated: 10.08.2023