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Finland Industrial Relations
Although trade unionization had started somewhat later
in
Finland than it had throughout the rest of the continent,
in the
1980s the country's workers and employers were the most
highly
organized in Western Europe. According to the Ministry of
Labor,
about 80 percent of the work force belonged to unions,
although
the rate varied significantly among industries. Employers'
federations also represented most enterprises
(see Interest Groups
, ch. 4).
Conflict between labor and management was fierce during
the
interwar years because tensions resulting from the civil
war had
soured industrial relations. Labor-management
collaboration
improved in 1940 when the Central Organization of Finnish
Trade
Unions (Suomen Ammattiyhdistysten Keskusliitto--SAK) and
the
Confederation of Finnish Employers (Suomen Työnantajain
Keskusliitto--STK) recognized each other and agreed to
cooperate
during the national emergency. Industrial relations
languished
immediately after World War II, however, in part because
government regulations tied wages to the cost-of-living
index.
Despite a general strike in 1956, occasioned by conflicts
of
interest among farmers, workers, and management, a spirit
of
compromise gradually developed in the late 1950s and early
1960s.
Finland's industrial relations took an important turn
for the
better in 1968, when a system of centralized incomes
agreements
was instigated by the government, which hoped to curb
inflation
and improve competitiveness after a major currency
devaluation.
After that date, regular negotiations, involving the
government,
labor, and employers, led to central agreements on wages,
benefits, work conditions, and social policy. Negotiations
usually started in the fall and ended in March. Senior
civil
servants acted as mediators between labor and management.
The
government often offered concessions, such as tax
reductions,
longer vacations, or reduced employer social security
contributions, in exchange for wage restraint or increased
investment. The central agreement among the national
federations
was not binding on individual unions. In practice,
however, the
central agreement provided guidelines for contracts made
between
unions and employers or, if necessary, between workers and
management at individual factories. Contracts affecting
civil
servants and professionals were usually negotiated after
settlements in industry, as were settlements concerning
prices
paid for agricultural commodities and lumber. In this way,
wages
in private enterprises exposed to international
competition
influenced the protected sectors of the economy.
Many observers feared renewed labor conflict during the
1980s
as slower growth, stiff foreign competition, and austerity
policies put pressures on the negotiation process. Strikes
did
occur, mostly during the spring negotiation season. In
1986, for
example, unions representing salaried employees,
technicians, and
professional personnel accepted the central agreement, but
SAK
held out for shortened work hours. When the STK demanded
greater
flexibility in setting work schedules in exchange for the
proposed reduction in work time, SAK responded with the
first
general strike since 1956. As a result, SAK gained a
larger wage
increase than the other federations and a provision that
by 1990
would reduce the work week in industry to 37.5 hours.
Moreover, a
number of local unions refused to follow the central
agreement,
preferring to negotiate on their own.
In 1988 the government was unable to implement a
national
agreement, largely because of opposition from employers.
Unions
and employers reached agreements industry by industry,
generally
following the settlement reached in the paper industry. In
this
industry, blue-collar workers had achieved wage increases
of
about 4 percent for the first year of their two-year
agreement,
while white-collar workers had received higher raises; the
parties had agreed to delay negotiations for the second
year.
Although its proposals had been rejected, the government
still
intervened in the negotiation process by introducing
legislation
on retraining programs, security against dismissal, and
worker
representation on company boards. The fact that important
service
branches, such as banking, insurance, and trade, had opted
for
multiyear agreements in which wage increases were to be
negotiated a year at a time, further indicated that the
centralized negotiation process was becoming fragmented.
Despite
these apparent setbacks, most Finns supported an incomes
policy
as a way to restrain wages, thereby protecting real
earnings.
Despite widespread consensus on incomes policy, Finland
continued to experience more strikes and lockouts than
other
Nordic states. In principle, Finnish legislation blocked
strike
actions during periods governed by incomes agreements.
Moreover,
according to the law regulating strikes, unions were
required to
give two weeks' notice to both employers and the state
before
initiating a strike, and the government could delay a
strike and
could require mediation. Despite these controls, illegal
work
stoppages occurred regularly, often involving small, but
wellplaced , groups of workers. In 1986, for example, air
traffic
controllers shut down the Helsinki airport for two weeks.
The
number of strikes had declined, however, after 1984, when
the
central incomes agreement had included a ninefold increase
in the
fines for illegal strikes.
Data as of December 1988
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