Introduction to the Labour Law and Industrial Relations in Finland

1. Introduction to the Labour Law and Industrial Relations in Finland Katja Lehto-Komulainen, Senior Adviser for International Affairs SAK 21.9.2009

2. The Finnish Industrial Relations • Freedom of association • Freedom of collectivebargaining • Importantrole of collectiveagreements • Hightradeuniondensity (70 %) and highcollectivebargainingcoverage (90%) • Bargainingrights of the publicsectorcorresponding to those in the privatesector (thoughdifferentregulations) • SAK, STTK and Akava: threetradeunionconfederations • EK: Confederation of FinnishIndustries • KT and VTML: publicsectoremployers´ confederations • Cooperationbetweenworkers´ organisations and employers´ organisations and government: tripartism

3. ForeignCompanies in Finland • Foreigncompaniesfunctioning and employingworkers in Finland have the sameobligations and rights as Finnishcompanies • Theyhave to apply the Finnish labour law (minimumprotection) and Finnishcollectiveagreements

4. ForeignWorkers in Finland • FromEU/EES-countries: freemovement of workers, freemovement of services • Fromthirdcountries (e.g. China): residence permit for an employed person is needed • Foreignworkershave the samerights and obligations as Finnishworkers no matterwhetherbeingemployedby a Finnishemployer, by a foreigntemporaryagency (postedworker) orby a foreignsubcontractor (postedworker)

5. SomeHistoryFacts • The President of SAK participated in the International Labour Conference 1919 • Finland is ILO memberstatesince 1920 • ”Engagement of January” (23.1.1940) • Finland is European Union memberstatesince 1995

6. The Impact of the EuropeanCommunityLaw • Labour legislationhasbeenharmonized • Finnishcourtshave to take the mandatoryEuropeanlegislation and jurisprudence of the EuropeanCourt of Justice into account • Finnish labour marketorganisations (both management and labour) areactiveparticipants in the European social dialogue

7. Main Principles of the Finnish Labour Law • The principle of protection: to providelegalprotection to the weakerpart i.e. worker in an employmentrelationsship • Legislationregulatesmandatorylegalminimum for the protection of workers • Neutralityprincipleby the state • The tripartiteprinciple

8. The Constitution of Finland • Protection of privateproperty (earnedpensionetc), several social and culturalrightsguaranteed • Freedom of expression • Freedom of assembly and freedom of association and collectivebargainingincludingfreedom to undertakecollectiveactions • Right to protectionagainstunjustifieddismissal

9. Legal Sources of the Labour Law • EmploymentContracts Act (2001) • CollectiveAgreements Act (1946) • Co-operationwithinUndertakings Act (2007) • Legislation on workingtime, annualholidays, health and safety, wageguarantee for insolvencycases, inventions of employees, representation of personnel in the administration of undertakings, etc.

10. Collective Labour Relations • A collectiveagreement -guaranteescertainminimumstandards for the employmentconditions -guaranteesindustrialpeaceduring the validity of the collectiveagreement

11. Structure of CollectiveBargaining • 1. National incomespolicyagreementsbetweencentral labour marketorganisations (SAK, STTK, Akava, EK, KT, VTML): 25 since 1968 • 2. Collectiveagreementsnegotiatedbynationwideworkers´ and employers´ industrialfederations on eachsector and branch -> general applicability of collectiveagreements • 3. Localworkplacelevel: according to the collectiveagreement in question • 4. Individuallevel (conditions to the employmentcontractareallowed to beabovethose of the collectiveagreement)

12. The GenerallyApplicableCollectiveAgreements • A generallyapplicablecollectiveagreement is mandatoryeven to an employerwho is notmember of an employers´ federation: employermustapplyall the terms (wage, workingtime, etc) in the generallyapplicablecollectiveagreement • A collectiveagreementcanbecomegenerallyapplicableifit is soconfirmed (nationwidecollectiveagreement, representativecollectiveagreement)

13. Shop Stewards • Union representatives at the workplace • General agreementsbetweencentral labour marketorganisations and collectiveagreementsregulaterights of shop stewardsetc • Higherprotectionagainsttermination of employment: • 1) terminationgroundsrelated to the employee´s person: onlyif a majority of the employeeswhom shop stewardrepresentsagree; • 2) financial and production-relatedgrounds for termination, reorganisationprocedureorbankruptcy of the employer: onlyif the work of the shop stewardceasescompletely and the employer is unable to arrangeworkthatcorresponds to the person´sprofessionalskillor is otherwisesuitable, or to train the person for someotherwork (EmploymentContracts Act).

14. IndividualEmploymentRelationship: EmploymentContract, part 1 • The collectiveagreement in question • Agreementbetween an employer and a worker • To performpersonallyworkunderemployer´sdirection and supervision in return for pay • Writtenororalcontract • a contract is validindefinitelyunlessithas for a justifiedreason (e.g. traineeship) been made fixed-term • A trial periodmaxfourmonths

15. IndividualEmploymentRelationship: EmploymentContract, part 2 • The collectiveagreement in question • EmploymentContracts Act stipulatesobligations and rights of workers and employers • Temporarylay-offs: if an employmentcontractmaybeterminated for economicreasons • Termination of an EmploymentContract: notwithout a proper and weightyreason; the period of noticevariesfrom 14 days to 6 monthsdepending on the lenght of the employmentrelationsship • Cancellation of an EmploymentContractwithimmediateeffects: ifit is justifiedby an especiallyweightyreason (weightierthan for terminationabove)