News - 30.03.2016 klo 12.14

Number of workers included in collective bargaining agreements on the increase in Finland

The collective bargaining system in Finland now comprises around 90 per cent of those who are in employment according to a new study published by the Ministry of Employment and the Economy. This figure has increased somewhat since the previous study findings in 2008.

The study by Lasse Ahtiainen focuses primarily on developments in the private sector. In 2008 73.9 per cent of employees were covered by collective agreements and in 2014 it was 75.5 per cent.

In the public sector the collective bargaining system covers 100 per cent of employees. This makes the total number of people who fall under collective bargaining agreements to 89.3 per cent of all wage and salary earners. In 2008 the figure was a bit lower, at 87.5 per cent.

There are also several collective agreements which are company specific i.e. apply just to one company. These are not included in the figures above. However, when these are factored in, it means that the proportion of employees under collective agreements is even higher.

So, all told, the figures suggest that the earnings and terms of work for some 90 per cent of Finnish wage and salary earners are defined by collective agreements. This ranks amongst the top or highest in Europe.

According to the European Trade Union Institute ETUI statistics in 2013 France, Belgium, Portugal, Austria and Sweden also had at least 90 per cent of their working population covered by collective agreements, Ahtiainen says.

In Finland a collective agreement is usually seen as generally binding when it covers more than half of the employees in a branch. Then all employers in the same branch are obliged to follow the minimum salaries and other terms of work set in the collective agreement.

There are also other possible criteria for generally binding collective agreements, like the national character of the agreement, traditions of collective bargaining in the branch and the high organising level of employees even when employers are less well organised.

The Ministry of Social Affairs and Health has a three person committee that makes decisions on generally binding collective agreements. Until October 2015 it has confirmed 165 generally binding collective agreements.

Lasse Ahtiainen estimates that collective bargaining coverage doesn’t fall below 50 per cent in any of the branches he has been studying. The lowest figures, hovering around 60 per cent, are in construction, the retail trade and in some services.

Common to all these branches is that there are a considerable number of small companies operating that employ less than 30 people. Whereas the bigger companies are well organised in the employers associations, smaller ones are often not.

Written by: Heikki Jokinen