Legal Alerts / 16 Sep 2013

Legal Alert – Pact for Employment and Growth

The national labor and employer confederations (“Confederations”) of Finland have reached a settlement on a centralized national labor market agreement called “Pact for Employment and Growth” (“Pact”). The Pact lays out guidelines for the collective bargaining parties to negotiate  industry-specific collective bargaining agreements (“CBA”) for the next three years.

According to the proposal, a salary increase of EUR 20 per month shall be implemented in first four months after a CBA has entered into force. Additionally, the salaries shall be increased by 0.4 per cent in 12 months after the first increase. A salary increase for the third year shall be negotiated between the Confederations by 15 June 2015.

Furthermore the Pact includes e.g. the following notable proposals:

  • Effectiveness and need for reform of the current collective bargaining system shall be assessed.
  • Settlement for the pension reform, which includes a possibility to increase retirement age, shall be reached by autumn 2014.
  • The conditions under which a working time may be deemed to have become an established term of employment, supplementing or superseding the working time condition stipulated in the employment contract, shall be clarified.
  • Prospects for moving bank holidays Epiphany and Ascension Day to fixed Saturdays shall be investigated.

The Confederations shall confirm their commitment to the Pact, if the coverage of the Pact and the government measures in support of the Pact are deemed to be sufficient after the sectorial bargaining round by 25 October 2013.
The outcome of the collective bargaining swipes through the Finnish labor market as CBAs play a central role in determining the terms of employment in Finland. Employers will likely encounter a strike wave if the Pact fails.

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