News - 25.02.2016 klo 13.51

Rules on local bargaining under intense negotiation

The outline for a local bargaining model is right now under intense negotiation between labour market organisations.

The Finnish Government last week issued a statement saying that local bargaining will be ushered through primarily by collective bargaining and complemented by legislation.

Promoting local bargaining is one of the key points of the Government Programme. It would mean more flexibility at the working place level to change the terms and conditions of employment and how to organise work at the company level.

Many of the collective agreements in Finland also allow for a degree of local bargaining, but these possibilities are not always availed of. Both trade unions and employers do speak out in favour of more local bargaining, but they do not necessarily mean the same thing.

Whereas trade unions advocate better organising of work, for example, employers often think in terms of ways and means to cut employees' earnings.

This current right-wing Government is not, however, willing to let the labour market organisations negotiate this matter freely. It has set five conditions for them to fulfil. And it will consider in May whether the results are good enough and what kind of legislation it will introduce.

What are the Government’s demands?

The Government demands that the system of local bargaining must guarantee that organised and non-organised employers are on a same level in terms of rights and obligations; that working times, wages, bonuses and other rewards can be agreed upon locally; and that a crisis clause is drawn up to help businesses overcome extraordinary challenges.

Representation and the right of information for employees must be guaranteed in firms and the final decision on local bargaining must be at company level, the Government is also insisting upon.

One of the key questions is how to read these demands. Does the Government really mean that it must be possible to agree working times and wages locally, without union involvement? That might mean the end for the generally binding nature of collective agreements.

Or does this allow for national collective agreements to set a minimum level that local agreements cannot go under?

If the labour market organisations are to reach a deal on local bargaining policy, it will mean a busy spring for the trade unions. Every union would in that case need to renegotiate their existing agreements before the end of May.

Written by: Heikki Jokinen