New Collective Agreements for most SAK Unions

There is however, the threat of a wave of strikes, which may halt work at paper mills and the chemical industry plants, disrupt electrical work on building sites, close nuclear power plants and stop the Finnish production of foodstuffs.

The majority of Finnish employees, ie about 1.9 million people, have accepted the proposed pay award, guaranteeing pay rises which represent a 3.1 per cent effect on costs in the current year. The entire public sector, the metal and construction industries and the service industries have accepted the basis of this collective agreement.

During this bargaining round, pay rises were mainly negotiated for only one year and there was little change to existing general terms and conditions. The implementation of the pay rises means that almost everyone will receive a 2.6 per cent general increase and special groups will get an additional 0.5 per cent. The latter will include the lowest paid. This solution to pay rises was instigated in January by two large SAK affiliated unions, ie the Metalworkers' Union and the Construction Trade Union. A number of other trade unions and employers' unions representing various sectors of industry, quickly adopted this scheme.

Non-inflationary pay scheme

According to financial experts, pay rises which remain close to 3 per cent do not cause increased inflationary pressures. Reija Lilja, the Director of the Employee Research Centre opines that these pay rises represent a reasonable and controlled solution which do not threaten the competitiveness of Finland.

- General pay awards should be proportionate to improvements in productivity. The growth of productivity in industry was approximately 4 per cent last year and it is expected to be similar this year. Naturally, there are variations between some sectors of industry, but the cost effect as a whole will remain lower than the growth in productivity, remarks Reija Lilja.

The pay awards which have recently evolved in Finland has been compared with cost development in the other EU countries, particularly by the employers. Reija Lilja is of the opinion that even in EMU circumstances, the development of productivity, the ability to afford pay rises and the competitiveness of Finnish companies should be scrutinised. In addition to everything else, the competitive edge of the Finnish export industry has been improved because of the weakening of the euro. Reija Lilja reminds us that only one third of Finnish exports are destined for the euro currency area.

Embargoes on exports?

Although the majority of working Finns are now covered by a collective agreement, some important sections of industry had not reached an agreement by the end of February. Exports are vital for the Finnish economy and this is threatened, should trade unions be compelled to start industrial action.

The respective Finnish unions of Seamen, Paperworkers, Chemical Workers, Electrical Workers, Transport Workers and Foodstuff Workers are those which have threatened, or are planning to start, industrial action. The point of disagreement at the negotiating table, for most of these unions, consists of the size of the proposed pay increase, but in addition there are some matters of principle which have not been solved. For example the Paperworkers' Union is looking for both a shorter working week and rules for the use of outside workers.

Industrial action by the Seamen's Union and the Transport Workers Union alone could hinder exports, as this would mean that cellulose and paper would neither be transported from the factories to the ports nor from the ports to anywhere else. If the Paperworkers' Union halts the work at the paper mills, production would naturally cease. Any industrial action by the Chemical Workers' Union would make the availability of oil more difficult. Similarly, industrial action by the Electrical Workers' Union would put the brakes on construction work, and any by the Foodstuff Workers' Union would affect the availability of food.