Helsinki (13.02.2014 - Heikki Jokinen) A bitter struggle has been going on for years over a collective agreement for those employed distributing unaddressed mail and free-sheet newspapers. From the end of 2009 there has been a collective agreement in place with a generally binding character. The Finnish Post and Logistics Union PAU is a party to this agreement.

The agreement has been endorsed in several court cases. Many of those employed by the distribution companies have received compensation for salaries deemed to be too low.

As a counter measure the employers decided to register their own so-called trade union Suomen Mainosjakajien Etujärjestö SME in November 2009.

Various leaders of the distribution companies have been on the board of SME. Currently, Research and GIS Specialist of the Janton Corporation, Olli-Pekka Sinkko is a board member. The former deputy CEO Mikko Kärki from Janton-owned Jakelujuniorit is the previous chair of the SME.

At the same time these companies established a new employers association for the branch, SKE. The main forces behind this association were again mainly the companies belonging to Janton Corporation.

Not surprisingly, within a few weeks these new organisations with roots and leaders from the same companies’ leadership pool came up with their own new collective agreement for the sector.

According to PAU it cut pay down to about one third of the level of the existing collective agreement. It also scrapped the agreed minimum hourly pay rate, which was around eight euro an hour.

Salaries cut to one third

Several people working for the unaddressed mail distributing companies have taken their case to the court. The employees have won most of the cases. The Finnish Post and Logistics Union PAU is strongly behind the plaintiffs.

PAU claim there is a collective agreement in place already with a generally binding character. According to Finnish legislation all the employers in the sector are obliged to comply with it regardless of whether they are members of an employers' federation or not.

PAU also pointed out that SME couldn't be credibly recognised as a genuine trade union. It has no office, no staff and no shop stewards. It was set up and run by the employers. And it has no unemployment fund.

In cases where there are problems over pay, SME advise people to contact the employer. The annual membership fee is five euros, which makes it impossible for them to organise any real activities. It is a so-called yellow union in the style of the Franco dictatorship, PAU stress.

Helsinki district court recently reversed the trend in one of these with a ruling favourable to the employers: it says the companies have right to pay wages which are below the generally binding collective agreement.

The court found that the new association SME is one which genuinely represents the interests of employees and that low pay is not exceptional taking into account the special nature of the branch.

The court also said that rates of pay set out in the collective agreement are so high that they pose a danger to the sector and to employment.

The case will go now to the court of appeal. The process will probably take several years before a ruling is handed down.

Profits to the Channel Islands

The leading corporation of distributing unaddressed mail and free-sheet newspapers in Finland is Janton with its nine subsidiaries. It also has 14 joint ventures, including eight majority-owned companies.

Janton is owned by the private equity fund Argan Capital with its headquarters in London. Agran Capital is, however, registered in Jersey like two other companies connected with Janton, as was revealed by the YLE’s current affairs programme A-studio last year.

Since Agran Capital became the owner of Janton, the A-studio programme was able to show the taxes it paid to Finland dropped to almost zero. In 2007 - 2011 the Janton concern turned a profit of 33 million euro, from which it paid only three per cent tax.

The corporate tax level in Finland at that time was 26 per cent. This avoidance of taxes was made possible through internal corporate loans.