A wave of strikes has followed moves by the government in Helsinki to interfere with workers’ rights.
The approach of the government of Finland to labour-market policy and reforms of labour and social legislation it has announced have led to a wave of strikes in the country. Against the backdrop of recent decades, this is challenging traditional structures of industrial relations and labour law.
Co-operation between the social partners is a feature of the history of Finnish labour law. Employers’ associations and trade unions have traditionally played a strong role, even as the labour-market system has undergone several changes. On occasion, legal reforms have been implemented following agreements reached between them.
Nonetheless, the system has become considerably more decentralised in recent years. In 2015, the Confederation of Finnish Industries (Elinkeinoelämän keskusliitto EK) revised its rules and withdrew from centralised income-policy agreements. As a result of the changed rules, centralised collective agreements are no longer concluded. Agreements are negotiated between employer and employee associations on a sectoral basis.
Even at the sectoral level, the Finnish Forest Industries Federation (Metsäteollisuus ry) decided in 2020 that it would no longer negotiate collective agreements. Subsequently Technology Industries of Finland (Teknologiateollisuus ry) divided its activities between two associations. The new structure provides two alternatives for collective bargaining, company-specific as well as national agreements.
Capping wage increases
Changes in Finland mirror the transformation of labour-market systems in many countries, challenging traditional models and institutions of regulation. When negotiations between the social partners enjoy less importance, governments in some European countries have intervened in collective bargaining, reducing the autonomy of the parties. The current Finnish government, elected in April last year, aims to reduce political strikes and cap wage increases to the level negotiated in the export industry, facing global competition.
Decentralisation is also reflected in the growth of local bargaining. The government aims to increase local bargaining by removing restrictions on local bargaining in non-organised companies, currently bound by the extension of collective agreements to the entire sector. Local bargaining would become applicable in all firms.
Some of the legislative changes under preparation, which the trade unions are resisting, would affect workers’ fundamental rights in Finland. These changes relate to the right to take industrial action and to engage in collective bargaining. Determination of wages is central to that.
The government proposes a wage model where the export sector sets the ceiling. This has attracted widespread opposition from workers’ organisations. Under the model, the general level of wage increases could not be exceeded by a national mediator or conciliation board. Limiting the mandate of the national mediator by legislation in advance would encroach on fundamental values from the perspective of collective-bargaining autonomy.
In sectors with a dominant share of female workers, an export-driven wage model has been considered unequal. Women play an important role in the Finnish labour market but there is still a long way to go to achieve equal pay. The weak economic position of the public sector has increasingly hampered efforts to improve wages in female-dominated care, suffering from labour shortages.
Elements of the reforms driven by the government, such as restrictions on the right to strike, are also problematic in the light of Finland’s international treaty obligations. These include International Labour Organization conventions and European Union law.
Tripartite approach
Until now, in Finland a tripartite approach has mainly been taken, when it comes to identifying challenges to labour law, anticipating changes in the labour market and the economy, and developing solutions. During the pandemic, for instance, the social partners jointly agreed on temporary amendments to labour legislation.
In Europe the Nordic countries are seen as sui generis in terms of quality of working life. A high-quality labour-market model in this context not only concerns the level and content of labour standards and protection but also the empowerment of workers. Each Scandinavian country has its own characteristics but overall the Nordic model refers to high union density, a primary role for collective bargaining and orderly industrial relations.
In a well-functioning collective-bargaining model, co-operation between the social partners and government is based on trust. The question in Finland is whether the bargaining model is being replaced by a regulatory approach, based more on legislation initiated by the government.
It is against the government that the current political strikes are directed. Workers’ organisations are dissatisfied with the content of labour-market policy and the proposed legislative changes. There is also widespread disappointment about the way the reforms have been prepared. Underlying this is growing concern about the apparent erosion of the tripartite principle.
A distinct change has occurred in the way governments draw up their programmes. Rather than outlining strategies and stating objectives, these have anticipated means to achieve a particular set of objectives, such as reform of labour regulations.
This raises the question of whether labour legislation can, or should, be prepared in such a way that the content of a government programme can be incorporated almost verbatim into legislation. This seems to be the direction of travel, and it leaves little room for tripartite preparation and social dialogue.
Redistributing power
In Finland, as in the other Nordic countries, traditionally high unionisation has fallen and is now below 60 per cent. Falling membership leaves trade unions struggling to maintain their position. As in many other European countries too, the distribution of power to the social partners, and between them, is under challenge, as they seek to adapt to an ever-more-decentralised bargaining system. These changes can shift the relationship between flexibility and security in different ways.
The amount of stability and trust also paints a picture of the labour-market model. Collective bargaining has been a guarantee of stability and a labour-market system built on trust—even in times of tension—has provided a degree of predictability. There has been agreement that while Finland requires economic growth, the labour-market system must also actively contribute to this growth.
The challenges of working life are set only to grow. Given the scale of the changes, whether one is talking about the overall green transition or companies combining economic, environmental and social sustainability, agreement throughout society on measures affecting the functioning of the labour market is indispensable. The choice is between consensus or conflict.
The strike wave in Finland is not only a symptom of this upheaval. It also demonstrates that the changes being pushed through by the government may not only erode the core content of workers’ rights but also endanger a trust-based social model.
Ulla Liukkunen is professor of labour law and private international law at the University of Helsinki. She has researched widely on comparative labour law, international labour law, transnational law and decent work.