The labour market and agreement models

Finnish society has long been built on good cooperation between trade unions, employers’ associations and the government.

This has meant stability and predictability, allowing people and companies to plan for the future, with a higher tolerance of risks. We believe that this cooperation should be maintained while reforming how agreements are made.

Workers’ rights must be safeguarded

The worker is the weaker party in the employment relationship, and the main purpose of labour law is to protect the worker. The legislation also creates structures for agreeing terms of employment. It is therefore important that we monitor what happens in political decision-making, and that we have an impact on decision-making if necessary.

For example, we do not approve the plans presented by the government in the summer of 2023 to reduce protection against dismissal and to limit the right to strike and the social partners’ rights related to agreements.

We are in favour of agreements in which the minimum terms of employment are determined collectively. Collective agreements on the terms of employment also safeguard the position of disadvantaged workers in the labour market.

Universally binding agreements

Binding national collective agreements ensure the workers in a sector have the same minimum terms of employment across the country. The universally binding nature of collective agreements also guarantees that companies not belonging to an employers’ association must comply with the minimum terms of employment. If an employer fails to meet their obligation to comply with the collective agreement, a sanction must be imposed.

We believe that sector-specific agreements on the terms of employment make it possible to agree the appropriate terms of employment for each sector. Work in the service sectors is people-centric and tied to a specific time and place. Low wages and a high proportion of part-time work are typical of the service sectors. We aim at terms of employment that obligate the employer to guarantee more hours and income for workers who are willing to take on more hours. We want work shifts to be scheduled so that workers can plan their lives more predictably.

A minimum level for labour costs in each sector also improves productivity when companies that are unable to pay wages in accordance with the general level disappear from the market. This frees up labour for better and more productive jobs.

Local agreements

We are open to local agreements in which the parties have an equal status and sufficient expertise in contracts. This requires adequate rights for union representatives to attend training, take time off work for their duties and receive remuneration. The collective agreements negotiated by PAM already have a large number of provisions – more than a hundred – that enable local agreements.

New forms of work

New forms of work such as the platform economy and sole proprietors in the service sectors have created challenges to agreeing terms of employment. The owner of a platform cannot avoid its responsibilities and only focus on gaining profits.

In the platform economy, responsibilities and revenues must be distributed equally. Finnish legislation only knows the status of an employee and an entrepreneur – there are no intermediate forms. If the characteristics of an employee are clearly fulfilled in an assignment relationship, it cannot be disguised as a business-to-business relationship.

Any questions? Contact our experts!

Juha Ojala

Sopimuspäällikkö, Edunvalvontaosasto

juha.ojala@pam.fi

Sopimustoiminnan suunnittelu, kehittäminen ja seuranta, sopimusyksikön esihenkilö