Government submits its proposal on promoting local bargaining to Parliament

Because of the reform, local collective bargaining would be possible regardless of whether the company belongs to an employers' association or what kind of employee representation the company has.

“We have been talking about increasing local collective bargaining in Finland for a long time. With this reform, local collective bargaining will finally be possible on an equal footing in all companies,” says Minister of Employment Arto Satonen.

Increasing local bargaining is one of the Government’s reforms to develop the Finnish labour market into a more flexible direction. The Government submitted its proposal to Parliament on 5 September 2024. The Government proposes that the amended legislation would enter into force on 1 January 2025.

Company-specific collective agreements could derogate from labour law

It is currently possible to derogate from many provisions of labour legislation by means of a collective agreement between national employer and employee associations. In future, this way of agreeing would also be possible for company-specific collective agreements. Moreover, the party representing the employees’ side could be a member association of a national employee association.

Mandatory labour legislation provisions would continue to safeguard the most essential minimum terms of employment.

Yellow collective agreements would be prevented

As the scope for collective bargaining expands, it is necessary to prevent so-called yellow collective agreements, which means ensuring that the employee association that is a contracting party genuinely represents the employees. In future, when assessing the purpose of an employee association, the actual goals and activities of the association should be taken into account in addition to its formal purpose.

Local bargaining bans in the field of general applicability would be removed

At present, the Act prevents an employer complying with a generally applicable collective agreement from entering into local agreements that deviate from certain provisions of the labour legislation, even if the collective agreement allows this. There are also other uncertainties as to the possibility to conclude local agreements in the field of general applicability.

The reform would remove the bans on local bargaining, and the Act would expressly provide for the possibility to conclude local agreements in the field of general applicability.

At the same time, the supervision of local agreements in the field of general applicability would be increased. A local agreement concluded with a personnel representative should be submitted to the occupational safety and health authority, and a negligence fee could be imposed for neglecting the obligation.

Local bargaining would be allowed in companies without a shop steward

As a rule, the parties to local collective bargaining would continue to be determined in accordance with the collective agreement. If the collective agreement requires a shop steward to be a party to local agreement and one has been elected, the local agreement would continue to be concluded with the shop steward.

Going forward, the parties to a collective agreement could determine an alternative procedure for concluding the agreement if no shop steward has been elected. If no alternative procedure has been determined, the local agreement could ultimately be concluded with the elected representative.

Skills and abilities of elected representatives in local collective bargaining would be improved

If elected representatives act as employee representatives when making local agreements, the employer should promote their skills and abilities as regards the operating environment of the workplace.

Inquiries: 
Jaakko Aromaa, Special Adviser to the Minister of Employment, tel. +358 295 047 110
Nico Steiner, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 295 049 001