Finnish labour market system
The labour market in Finland and the regulation thereof are based on labour legislation and collective agreements. Whereas legislation forms the basis for regulating the labour market, specific employment terms are determined according to collective agreements within each branch.
Any trade union and employers’ association is entitled to make collective agreements. If the parties to a collective agreement cover at least half of the employees within a specific branch, the collective agreement has general applicability for all companies within that branch.
Collective agreements are binding. Employees’ associations pledge on behalf of their members to maintain industrial peace within their branches. During the agreement period it is not permitted to organise strikes pertaining to the agreement or any of its parts. Employers' associations in turn pledge on behalf of their members to oversee that their member companies comply with the agreements.
Collective agreements with normal applicability and
those with universal applicability
The universal applicability of a collective agreement means that unaffiliated employers must also comply with the terms that have been agreed in the national collective agreement for that specific branch. The universal applicability of a collective agreement is decided by a special committee within the Ministry of Employment and the Economy.
Collective agreements can have either normal or universal applicability. Collective agreements with normal applicability are binding for the parties to the agreement, i.e. for those belonging to the employers’ and employees’ associations. Most employers in Finland are affiliated and thus comply with collective agreements in accordance with their normal applicability.