Helsinki (30.11.2016 - Heikki Jokinen) Plans to remodel the Finnish collective bargaining system are still on the table. The basic idea is for pay rises in collective agreements to be linked somehow to those for the export industry.

In March 2016 the Finnish Government approached the labour market confederations with a proposal to reform the way collective bargaining is negotiated in the future. The Government wanted trade unions and employer associations to negotiate collective bargaining separately in each sector, but with a ceiling on pay increases.

This ceiling would be the pay rise negotiated by the export industry unions and employers' associations. Other sectors would remain free to make their own collective agreements but with the proviso that they could not agree on bigger pay rises than that for the export sector.

The planned new negotiation regimen is often called the Finnish Model. It mirrors the one currently in use in Sweden.

Finland has a long tradition of making national labour pacts where pay rises and other issues are negotiated at the national level. Generally speaking, most unions have negotiated their collective agreements on the basis or along the lines of these pacts.

Many employers associations have been unhappy with the national pacts, believing they can make better and cheaper collective agreements in individual sector negotiations with unions. Last May the Confederation of Finnish Industries EK were given new statutes, which state clearly that EK is no longer permitted to enter into national pay pacts binding on its members.

Many questions without answers

The trade union confederations have accepted in principle the proposed so called Finnish Model to be used from the collective bargaining round in autumn 2017 onwards.

The pay rise ceiling should henceforth be calculated on the basis of the competitiveness of the export sector, employment, productivity and the balance of the public economy. The Government would contribute by setting tax levels so as to support the pay rise.

Since spring the export industry unions and employers associations have been negotiating on how to build the Finnish Model. So far this has not led to any clear resolution as to how this can be achieved.

Other unions outside the traditional export industry unions are also somewhat skeptical and have presented many questions.

One of the main doubts expressed concerns the service sector unions. Who will negotiate the pay rise? How can the service sector unions overlooked when services are also important for Finnish exports?

Another major issue is how to bridge the gender gap in wages and salaries if the Finnish Model is to be implemented. Would the often male dominated industry unions negotiate a special rise for the low paid female sectors?

It may very well be that the much talked about Finnish Model will not be operational in 2017. This would mean that, in the meantime, every union would have to negotiate their collective bargaining individually, as the employers' EK will no longer make national salary pacts.