Work and employment: Current situation

Centralised framework agreement concluded on 13 October 2011
The Finnish central-level labour market organisations concluded on 13 October a broad-based framework agreement. The aim of the agreement is to safeguard Finland‘s competitiveness, investments, employment and purchasing power in the unstable economic situation.

Pay increases and termination of collective agreements
The new agreement sets the framework for pay and cost increases in branch-level collective agreements for a period of 25 months. According to the framework agreement, the total cost effect of the sectoral agreements shall not exceed 2.4 % for the first 13 months, followed by 1.9 % for the next 12 months. The numbers include the rise in payroll costs and the cost effects of changes made in the terms and conditions of employment. The annual cost effect is 2.05 %.

The pay increases take effect as the current agreements terminate. The framework agreement enables the taking into account of the different situations in various companies. The distribution of the increases into general and company-specific increases will be decided in branch-level agreements.

The framework also includes a lump sum of 150 Euros to be paid to employees with at least 3 months’ work history. The lump sum shall be paid in 2012 to those full-time employees whose unions are bound by the framework agreement. The terms of the payment of the lump sum can be determined differently in branch-level agreements. 

Measures in working life
The total cost effect of the framework agreement also includes the costs related to the so-called “working life package” which includes several measures with relation to working life. Many of these measures will be drafted in tripartite concertation.
The measures include the following:

• lengthening of the statutory paternity leave with two weeks (up to 54 days)
• changes to the terms of unemployment benefits
• developing staff planning at workplace level
• developing the opportunities for people who are able to participate only partially at the labour market 
• amendments to occupational health and safety legislation.
  

Government contribution to the framework
The Government has promised to support the framework agreement by cutting corporate tax by 0.5 % in addition to a cut of 1.0 % according to the Government programme of June 2011. The present corporate tax is 26.0 %.

The government has also promised to withdraw the plan to reduce alternation leave allowances which was included in the Government programme.

The state will also contribute to the financing of the temporary layoff system. In consequence of this, the unemployment insurance premium of employers will not increase in 2012. 

The Government has promised to implement these measures if the content and coverage of new branch-level agreements is regarded as sufficient. 

Next steps
The framework agreement forms the basis for sectoral negotiations. The framework       agreement and the government support measures take effect only if there is a very broad coverage. The branch-level negotiations must be concluded by 24 November with a new agreement or an announcement of a coming agreement. The assessment of the situation will be done by the central labour market organisations on 25 November.

Framework agreement (pdf)