Helsinki (19.12.1997 - Juhani Artto) Complex negotiations throughout the autumn concluded in mid-December in a comprehensive incomes policy agreement to last until 15 January 2000.

The agreement covers 1.3 million employees in Finland. The framework agreement reached by leaders of labour market organisations was rejected only by the representatives of 27,000 employees.

Monthly salaries will rise in both years by FIM 142 (1 USD = FIM 5.35), representing an increase of FIM 0.85 per hour or at least 1.6 per cent. The agreement also includes a 0.5 per cent increase for special arrangements and an additional 0.4 per cent increase for low-pay sectors and for those with a predominantly female workforce.

The Confederation of Finnish Trade Unions SAK has calculated that the agreement increases the wage bill of the employers by 4.3 per cent. The purchasing power of the employees will rises over two years by a total of 3.5 per cent. Increased inflation and higher indirect taxes may, however, offset the real value of employee benefits.

If inflation between December 1997 and October 1998 exceeds three per cent, then employees will be compensated in full from 1.1.1999.

One integral element of the agreement is that the Finnish government will reduce the rate of income tax by 0.2 per cent in 1998 and by 1.4 per cent in 1999.

The partial retirement age will be reduced from 58 to 56 years for a trial period from 1.7.1998 to 31.12.2000.

The Finnish labour market has three decades of experience of comprehensive incomes policy agreements. The coverage of the latest agreement is exceptionally broad.

The trickiest negotiations were those in the road transport sector and in the pulp and paper industry.