Transnational collective bargaining has become increasingly common in Europe over the last few years. In spite of this trend, national agreements will continue to underpin the collective agreement system in Finland and other EU countries. European-level agreements will complement national collective agreement systems.

Thus is the view taken by Heikki Pohja, head of the Brussels bureau of the three Finnish central trade union confederations: SAK, STTK and Akava, speaking at the end of October at the "European Trade Union Movement" seminar in Helsinki.

"The situation differs from the 1980s when European collective bargaining did not yet exist" notes Pohja.

The main players are the European Trade Union Confederation (ETUC) and the employer organisations UNICE and CEEP. There are also industry-based negotiations in which the trade union movement is represented by fourteen International Trade Secretariats.

SAK, STTK and Akava are ETUC members and actively participate in the evolution of international collective bargaining. The Finnish national trade unions do likewise in the International Trade Secretariats of various industries.

"Labour market organisations can influence decisions taken in Brussels in many ways", Pohja emphasises. He has worked in Brussels for nearly three years lobbying for the Finnish trade union movement.

Pohja considers it inevitable that collective bargaining will become more international, although its legal basis in the EU is still weak. Europe does not recognise the right to organise and take industrial action, nor the right to conclude transnational collective agreements.

Pohja believes that it will take at least four or five years before the first European collective agreement can be concluded, as this requires amendments to the treaties establishing the EU. Making such amendments is a complicated process.

However, transnational collective bargaining is forging ahead regardless of the EU situation. According to a study by the German Deutsche Bank, 70 per cent of multinational companies consider it likely that international collective bargaining will be a feature of future industrial relations.

The study shows how far behind the times the forest sector giants Enso (Finland) and Stora (Sweden) are in their merger, as they plan to abolish staff representation in their top administration. The international trend is quite the opposite: an increase is expected in transnational collective bargaining by labour market partners.

A new idea by the engineering sector trade unions will involve transnational collective bargaining. The International Trade Secretariat for metalworker unions has recommended a common overtime limit for its member organisations.

The German, Dutch, Belgian and Luxembourger unions have figured out a common way to stipulate pay demands. The formula is based on percentage increases in labour productivity and prices. The German IG Metall has already started negotiating on this basis by demanding a 6.5 per cent pay rise. This agreement by unions in four countries counters employer ideas of competing by reducing wages and salaries.

There are also agreements in the construction industry which are applied to working conditions in several countries, although formally the agreements are not transnational.

Compared with national collective bargaining systems, the present official European system is strange. The parties negotiate only about matters proposed by the European Commission. If the parties can reach no compromise, then the Commission may issue a directive on the matter. During the negotiations each party speculates separately on what kind of directive - if any - the Commission will wind up formulating if the negotiations are inconclusive.

Recently, the employers' confederation UNICE blocked negotiations on an agreement concerning the right of employees to receive information and submit their views. UNICE evidently believed that the Commission would not issue a directive on the matter. However, the Commission subsequently proposed a directive on "informing and hearing employees".

"The biggest incentive for both negotiating parties is the fear of a directive. When the employers respond negatively to our proposals, we apply pressure on the Commission", Pohja says.

Four years ago the employers miscalculated in supposing that the Commission would not issue a directive on European Works Councils if the labour market partners failed to reach a compromise. However, the Commission issued the European Works Councils directive and, despite its weaknesses, this instrument improves the ability of union activists to influence their multinational employers.

Pohja believes that European Works Councils will be more significant in the future than they are now. Soon there will be more than 500 of them with 30,000 active European staff representatives. The European common currency will make it easier to compare working conditions in different countries.

Among the first concrete results of European negotiations are agreements on parental leave, part-time work and working hours in agriculture, navigation and railways. "When the will exists, the partners can reach significant agreements within a few weeks or months" Pohja says, referring to the most successful negotiations.

The attitude of employer organisations towards European collective bargaining varies from one industry to another but is usually quite reserved.

Wages and salaries are not normally on the agenda of the Ministers of Finance, but in exceptional situations even this is possible. In Pohja's opinion, trade union participation in pay discussions is as natural on the European level as it is at national level.