Framework agreement by the central labour market organisations of Finland to ensure competitiveness and employment 2011-2013
Agreement Settlement, 13.10.2011 at 10am 1(10)FRAMEWORK AGREEMENTFRAMEWORK AGREEMENT BY THE CENTRAL LABOUR MARKET ORGANISATIONS OFFINLAND TO ENSURE COMPETITIVENESS AND EMPLOYMENT The undersigned central labour market organisations have negotiated the means to ensure Finland’s competitiveness and the most positive development of employment and purchasing power amidst the uncertain global economic climate. The objective of the central labour market organisations is to continue the good co-operation with the Government regarding the themes that could contribute to economic growth, productivity and employment in Finland, as well as, on the one hand, to secure the competitiveness of Finnish companies in the global markets and, on the other hand, to strengthen the economic base of the welfare society. The parties to the agreement propose that the Government convene a tripartite committee to monitor and evaluate the success of the economic growth and employment objectives included in the Government Programme. The aim is, on the one hand, to monitor the implementation of the initiatives and projects included in the Government Programme to promote economic growth and employment, as well as, on the other hand, to search for new solutions that could support the above-mentioned objectives. Particular attention should be paid to the broad-based development of skills and innovation, globalisation, promotion of business growth and investments, and by these means also to the promotion of employment in Finland, as well as improvement of welfare services.
Agreement Settlement, 13.10.2011 at 10am 2(10) The central labour market organisations will support the objectives in the following ways: a) The central labour market organisations propose that all collective agreement settlements comply with the settlement laid down in Section 1 and that sectoral associations and negotiating bodies introduce sector-specific collective agreement negotiations as described in more detail in Section 1 in such a way that the adequateness of the coverage of the framework agreement can be assessed by 25 November 2011. b) If the coverage of the framework agreement envisaged in Section 1 is considered adequate, the parties commit themselves to the measures to develop working life included in Section 2. The Confederation of Finnish Industries EK and AKAVA (the Confederation of Unions for Professional and Managerial Staff in Finland) state that the existing Basic Agreement between EK and the Federation of Professional and Managerial Staff (YTN), as well as the related training materials and the General Agreement, shall apply for determining the wage and employment terms of professional and managerial staff within companies covered by the EK-YTN agreements. Helsinki, 13 October 2011 AKAVA ry Confederation of Unions for Professional and Managerial Staff in Finland ELINKEINOELÄMÄN KESKUSLIITTO EK Confederation of Finnish Industries EK KIRKON TYÖMARKKINALAITOS Labour Market Organisation of the Church KUNNALLINEN TYÖMARKKINALAITOS KT KT Local Government Employers SUOMEN AMMATTILIITTOJEN KESKUSJÄRJESTÖ SAK ry Central Organisation of Finnish Trade Unions (SAK) TOIMIHENKILÖKESKUSJÄRJESTÖ STTK ry Finnish Confederation of Professionals STTK VALTION TYÖMARKKINALAITOS Office for the Government as Employer
Agreement Settlement, 13.10.2011 at 10am 3(10) 1. Sector-specific collective agreement settlements The central labour market organisations propose that sector-specific collective agreements or a settlement reached during the period of existing collective agreements shall be concluded in general for a 25-month period as follows: • the first contractual increase shall be implemented for an agreement that has expired by 1 October 2011, or • the first contractual increase shall be implemented upon the expiry of the collective agreement, or • the first contractual increase shall be implemented and the first 13- month period shall begin from the expiry date of the wage settlement of the existing agreement if the previously agreed period of the agreement would have continued after the expiry of the wage settlement. The contractual increase for the first 13-month period shall be 2.4 percent, and the contractual increase for the following 12-month period shall be 1.9 percent. The parties to the agreement may shorten the latter period by up to 4 months or extend it by up to 2 months. The above-mentioned percentage increase for the latter period is for 12 months. If the increase period is shorter or longer than this, the contractual increase shall be adjusted according to the actual length of the period. The contractual increase refers to wage adjustments and other cost-related amendments to the collective agreements. If this framework agreement is implemented, wage earners belonging to sectors that are bound by the agreement shall be paid an additional lump sum of 150 euros together with the first wage payment of 2012. If the first period of the agreement begins later than 1 January 2012, the lump sum shall nevertheless be paid together with the first wage payment of the agreement period in question. The amount paid to part-time wage earners shall be lower in the same proportion as the working time of the part-time wage earner is less than full working hours. The lump sum shall be paid only to persons whose employment relationship has continued without interruption for at least 3 months prior to the date on which the lump sum is paid. The payment date of the lump sum, as well as the conditions for paying the sum and its implementation, may be agreed otherwise by each sector individually. Any programmes for developing wage and other similar systems that were agreed before 13 October 2011 shall be implemented as agreed.
Agreement Settlement, 13.10.2011 at 10am 4(10) The agreement covering contractual increases must be valid at least until 31 October 2013. Should the central labour market organisations together reach the conclusion that the economic trend deviates very significantly from what had been forecast when the agreement was made, they may recommend that the sector-specific agreements be terminated. This termination clause must be included in the collective agreements.Schedule for sector-specific negotiations The central labour market organisations propose that sector-specific collective agreement negotiations be concluded by 4 pm on 24 November 2011. This deadline may be deviated from if there is an acceptable reason for holding collective agreement negotiations according to a previously agreed schedule, for example in accordance with the schedules of committees preparing amendments to previously agreed collective agreements. If the parties to sector-specific agreements agree that they will undertake negotiations according to a previously agreed schedule, the parties must together inform their own central labour market organisations by 24 November 2011 whether they commit to conclude a collective agreement in accordance with Section 1.Coverage of the framework agreement The central labour market organisations shall promote, through their own measures and co-operation, the broadest implementation of this settlement in the labour markets. Parties to the collective agreements shall notify their own central labour market organisations in writing by 4 pm on 24 November 2011 that they have reached a settlement in accordance with this agreement. The central labour market organisations shall evaluate the coverage of the framework agreement by 25 November 2011, after which they shall together notify the Government accordingly. If the coverage of the framework agreement is not sufficient and the central labour market organisations therefore do not commit themselves to the measures relating to the development of working life stated in Section 2, the parties to the collective agreements are entitled to break off from the decisions included in the agreement.
Agreement Settlement, 13.10.2011 at 10am 5(10)2 Development of working life 1. Terms of using labour The parties agree that the criteria and principles for concluding fixed-term employment contracts are compatible regardless of the different forms of employment relationships. The parties propose a tripartite analysis by 31 March 2012 of whether the fixed-term employment contracts made for temporary agency work comply with the principle of compatibility in practice. It shall also be evaluated whether a prior notification procedure should be introduced for terminating fixed-term employment contracts. The required legislative changes shall then be made on the basis of this evaluation. In addition, a tripartite evaluation shall also be made regarding possible changes related to the irregular working hours of so-called “0” employment contracts. 2. Extending careers 2.1 Programmes for ageing workers A joint model for company-specific, municipality-specific or Government agency-specific programmes for ageing workers shall be drawn up: • the model shall be prepared and implemented • elements could include flexible working hour arrangements, health inspection programmes and special training activities for ageing workers 2.2 Development of labour markets for people with partial work abilities The employment of people with partial work abilities shall be promoted on the basis of the Lehto Report (Ministry of Social Affairs and Health). A comprehensive action plan for developing the labour markets for people with partial work abilities shall be implemented to introduce changes to incentives, support programmes, service chains, information systems, legislation and also attitudes. Special attention shall be paid to developing incentives for employers, offering support to employees to help them find a suitable employment path for their own unique life situation, and making pensions and wages more compatible in a motivating way. In addition, employment processes must be improved so that they are clearly capable of leading to employment. Legislation related to people with partial work abilities must be evaluated as a whole with the emphasis on employment and managing the entire package.
Agreement Settlement, 13.10.2011 at 10am 6(10) 2.3 Developing HR planning HR planning should be made a key tool for co-operation between the employer and employees. When drawing up an HR plan, issues to be discussed together include the use of labour, expertise, and reconciliation of work and family life. HR planning should also take into consideration the needs of employees, production and service. For this purpose, the central labour market organisations shall draw up a joint model for HR planning as the basis for tripartite preparations for amendments to the legal acts on co-operation by 31 May 2012 and covering the following issues: • Promoting the systematic introduction of flexible working time arrangements. Examples of flexible working time arrangements include working time banks, part-time work opportunities and telework. When planning working time arrangements, the ability of employees to influence their own work should be taken into account. • Evaluating issues related to fixed-term employment contracts in such a way that addresses the number of both realised and future fixed- term employment contracts, the use of labour and criteria. The need for temporary workers should be evaluated in advance each year. • Taking into consideration the principles of employing people with partial work abilities. • Improving the professional expertise of employees on the basis of the work of the central labour organisations’ preparation committee for the development of expertise. Following this, tripartite preparations shall be initiated to include the above- mentioned issues in the HR planning of the legal acts on co-operation. The committee’s proposals shall be made by 30 November 2012. 2.4 Wellbeing in the workplace A tripartite evaluation shall be made by 30 November 2012 regarding occupational safety legislation so that load factors related to working hours and their effect on the ability to work and managing at work can be evaluated in advance. In addition, sector-specific barriers to the use of working time banks shall be studied. A joint plan for removing these barriers shall be drawn up.
Agreement Settlement, 13.10.2011 at 10am 7(10) 3. Transition security and developing competences 3.1 Practices The central labour market organisations shall compile a list of best practices that should ideally be adhered to in restructuring situations that have a significant impact on personnel. The earlier participation of authorities in transition processes shall be evaluated, and official support for transition security shall be improved. Sufficient resources for this shall be allocated (Ministry of Employment and the Economy). 3.2 Developing competences In order to adjust to change, increase productivity and extend careers, the opportunities of workers to update their professional skills and develop their expertise shall be improved. The parties shall establish a committee with the task of preparing proposals for how to increase the scope of personnel development opportunities at different workplaces and among different personnel groups. The objective of the parties is to create operating models for workplaces by which developing the professional expertise of employees can be made systematically on the basis of the demands of business and public services, and starting with the long-term employment opportunities of employees. In order to establish the above-mentioned operating models within workplaces, the committee shall draw up a joint model for the central labour market organisations by which the use of HR and training plans in accordance with the legal acts on co-operation can be promoted. The committee shall evaluate the use of the revised Adult Education Allowance of the Education Fund and prepare proposals for developing the operations of the Education Fund. The focus of the investigation shall be on the right to education accrued during an employment relationship, as mentioned in the Government Programme, and on extending the tasks of the Education Fund to the administration of a possible account model. The accrued right to education can be used during an employment relationship or after its termination in order to develop professional skills. The right to education would be accrued in each employee’s personal education account or other corresponding system. The right to education would be applied in more detail in collective agreements. The central labour market organisations shall also co-operate with the Government in investigating the reform of public funding for adult education, the personal education of citizens and the preparation of legislation regarding education leave. The committee shall make the above-mentioned proposals by 30 April 2012.
Agreement Settlement, 13.10.2011 at 10am 8(10) 3.3 Tax incentives The competitiveness of Finnish companies is improved by continuously developing the expertise of employees. The parties want to improve the competitiveness of companies and their ability to deal with cyclical fluctuations. The possibilities of introducing tax incentives to encourage companies to invest in training employees shall be investigated. For example, this could be a reservation made on the company’s balance sheet. At the same time, the treatment of education incentives in the income taxation of wage earners and possible changes to this shall be investigated. The parties shall draw up a joint proposal for the required action by 31 May 2012. In addition, the parties shall clarify how a corresponding system could be implemented within the public sector. 4. Reconciliation of work and family life and gender equality 4.1 Family leave system The family leave system shall be reformed in accordance with the Government Programme. The objective is to increase the amount of leave allocated to fathers, to make the use of family leave by fathers more flexible, and to make it possible to care for a child at home for a longer period. The father’s proportion of family leave shall be increased so that the length of paternity leave totals 54 weekdays, of which no more than 18 can be taken at the same time as the mother. The father’s leave is per child, and it can be held flexibly until the child turns 2. The existing connection to parental leave shall be removed. The division of parental allowance costs shall remain unchanged. The changes shall enter into force at the beginning of 2013. The impact of the reform and the achievement of its targets shall be reviewed 2 years after it enters into force. 4.2 Equal pay A tripartite evaluation of the functionality of pay surveys and development needs shall be made. As part of the evaluation, the content of pay surveys shall be reviewed along with co-operation obligations and the right to information of employee representatives (shop stewards/co-operation committee members). On the basis of this evaluation, proposals for further action shall be made by 31 May 2012; these proposals may also include legislative changes. The parties to the collective agreements shall evaluate the impact of the agreements on wage differences between women and men and take action together to promote equal pay.
Agreement Settlement, 13.10.2011 at 10am 9(10) 5. Social security Unemployment security 1. Simplification and clarification of the unemployment security system Changes are needed to the unemployment security system to make it simpler and more motivating. The Government Programme states that the unemployment security system shall undergo a tripartite reform with the aim of simplifying and clarifying the system on the basis of the existing system. The changes to be made to the system seek to promote rapid employment. When drawing up a new simpler and more motivating unemployment security package, issues to be addressed include improving how daily allowances are determined and adjusted allowances, the levels of duration of compensation, and the period of employment condition. When simplifying the system, the needs of employees, employers, unemployment insurance funds and Kela shall be taken into account. The changes related to simplification shall be prepared by the Salo Committee of the Ministry of Social Affairs and Health, and they will be implemented in a manner that is cost neutral in terms of the overall reform. 2. Other changes Financing of lay-off allowances The State shall participate in the financing of lay-off allowances by funding a share equal to the basic daily allowance of the earnings-related allowance. Shortened work week and adjusted daily allowance Laid-off employees whose working time has been shortened by one or more days a week shall be paid unemployment allowances for the lost working days without adjustments. In the same connection, the working time limit for the adjusted unemployment allowance shall be raised from the current 75 percent to 80 percent as of 1 January 2012. Sectioning of holiday compensation and unemployment security The sectioning of holiday compensation shall be discontinued. The change shall enter into force on 1 January 2013. Job alternation leave The proposals for making changes to job alternation leave compensation shall not be implemented.
Agreement Settlement, 13.10.2011 at 10am 10(10) 6. Trust-building measures in the labour markets The parties to the agreement share the aim of increasing trust and constructive co-operation based on common interests in the labour markets and in economic policy. Accordingly, efforts shall be made to identify and eliminate problems of trust that afflict the labour markets on different levels. The objective is to develop a labour market culture based on transparency, mutual respect and trust, as well as to introduce the required measures on both the workplace level and on the sectoral and central labour market organisation level. This will be a multi-year project that aims to have parties at all levels commit themselves to good labour market practices and in this way enable the open, unprejudiced and goal-oriented development of labour market activities. Central themes include, on the one hand, encouraging initiative and innovation at workplaces, and, on the other hand, identifying and reacting early to problems and maintaining continuous dialogue regarding these problems, complying with agreements and legislation, and solving disputes. Special attention shall be paid to developing practical co-operation and negotiating skills at workplace level. A committee consisting of representatives of the central labour market organisations and associations shall be responsible for implementing the project. Broader participation at the union and workplace level shall be ensured by a special forum that will be convened when the project is first implemented and if necessary as the project progresses. The aim is to create an action plan for measures to increase trust in industrial relations by 30 November 2012. The action plan shall include proposals for general measures for improving the negotiating culture and practices. In order to improve the monitoring and co-ordination of political interests affecting working life, as well as legislative and other projects, a permanent negotiating body shall be established by the central labour market organisations. The flow of information to the sectoral level shall be ensured. The permanent negotiating body shall cover in particular: • Government Programme projects • Bipartite projects • EU social dialogue and influencing EU legislation • Compatibility of economic and labour market policies • Other measures to promote the economy and employment in co- operation with the Government Under the guidance of the permanent negotiating body, a multi-year joint programme for the goal-oriented development of working life and the labour market shall be drawn up by 30 November 2012. The ambitious vision is to raise the quality and competitiveness of Finnish working life to a position of global leadership.