Finland’s sectoral bargaining is an inspiration abroad while undermined at home

UNI Europa gathered PAM’s commerce sector union representatives and collective bargaining specialists to a two-day workshop on strategies for strengthening sectoral bargaining.

“Finland is interesting because you have a strong tradition of sectoral bargaining that other European countries are now looking to for inspiration”, says Oliver Röthig, UNI Europa’s regional secretary.

Collective bargaining – and in particular multiemployer or sectoral bargaining – is of interest and has momentum right now, because the new EU directive on minimum wages explicitly promotes collective bargaining and sets member countries the goal that 80 percent of employees be covered by collective bargaining agreements. Countries not reaching that target need to establish action plans to promote collective bargaining. The directive seeks to reduce working poverty and inequality.

In Finland about 90 percent of employees are covered by collective agreements. This is based on legislation that makes many collective agreements universally binding. It means all companies in the sector have to comply with the minimum terms set in the collective agreement. Read more on universally binding agreements

Collective bargaining systems under pressure

“The paradox”, says Röthig, “is that as many European nations look to Finland and other countries with high collective bargaining coverage, these systems are under pressure from right-wing governments in core countries such as Finland and Belgium”.

The Orpo-Purra government programme includes many measures that undermine the collective bargaining system. The planned measures include restricting the right to strike, capping the wage increases the National Conciliator is allowed to propose in mediation of labour disputes, and allowing non-organised companies and workers to “negotiate” exceptions to the collective agreement with workers without a trained union representative. Read more on the current government’s plans

The UNI Europa project Level-up: support and develop collective bargaining coverage aims to help unions find strategies to increase coverage of collective agreements in EU member states in light of the goals set in the minimum wage directive. Read about the project

“There is no one model that fits all, so we want to develop a toolbox that unions can use.”

Sectoral bargaining is good for workers, companies, and democracy

“Collective bargaining is about democracy. The countries with strong unions are also the countries with high electoral participation and equality. Without co-determination in working life, workers are less likely to engage and make their voices heard in elections. Sectoral or multiemployer collective bargaining means protection for workers and equal pay, when a worker’s terms and conditions don’t vary wildly if they work at this or that supermarket chain”, says Röthig.

And from the point of view of the employers, sectoral bargaining ensures a level playing field for companies to compete. In fact, most sectoral bargaining was developed initially at the request of employers.

“Finland is known for its high level of technological development and knowledge. You compete on quality and innovation. That’s what Finland is good at, and you won’t stay relevant on the global market with a strategy of cheap labour and zero-hour contracts. Sectoral bargaining pushes companies to compete on innovation and quality as it avoids competition on wages and working conditions”.

Text: Hildur Boldt

Picture: Oliver Röthig at protest by employees of the Finnish National Theatre against government plans to weaken workers’ rights. Photograhph by Pauli Unkuri