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Reform of local bargaining progresses

Ministry of Economic Affairs and Employment
Publication date 15.2.2024 15.58 | Published in English on 16.2.2024 at 17.04
Press release

The work of the tripartite working group preparing the reform of local collective bargaining is in final stages, and the outlines of the reform are clear. The consultation round on the working group’s report will begin in February.

The tripartite working group was tasked with preparing the legislative amendments required by the Government Programme’s entries on local collective bargaining. The Government’s goal is that local collective bargaining will be equally possible in all companies, regardless of whether the company belongs to an employer association or the kind of employee representation the company has. 

Increasing local bargaining is one of the Government’s reforms to develop the Finnish labour market into a more flexible direction. The objective is to support employment, economic growth, competitiveness and productivity.

The outlines of the local collective bargaining reform are presented below. The information is based on the working group’s report, which is still being finalised. The content of the government proposal may still change during the legislative drafting.

Company-specific collective agreements could derogate from labour law

It is currently possible to derogate from several 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.

Parties to the collective agreement should genuinely represent employer and employees
In connection with expanding the scope for collective bargaining, it is necessary to ensure that the employee association genuinely represents the employees. The aim is to prevent so-called yellow collective agreements by considering not only the association’s formal purpose but also its actual goals and activities.

Local bargaining bans would be removed in field of general applicability

At present, non-organised employers cannot make full use of the possibilities offered by legislation on local collective bargaining (so-called semi-mandatory provisions). The reform would put non-organised companies on same footing as organised companies. Bans on local bargaining in non-organised companies that comply with a generally applicable collective agreement would be removed from labour legislation.

Local bargaining to 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. In an organised company with an elected shop steward, the local agreement would still be concluded with the shop steward.

If the collective agreement requires a shop steward to be a party to local agreement, under the current rules a local agreement cannot be concluded in companies without a 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 or personnel covered by the collective agreement.

The 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. Elected representatives have the same protection as shop stewards.

Aim is to submit government proposal in June

During February, the Ministry of Economic Affairs and Employment will launch a consultation round on the working group’s report. After the consultation, preparatory work by public officials will continue. The aim is that the Government will submit a proposal on local collective bargaining in June 2024. According to the plan, the legislative amendments would largely enter into force on 1 January 2025.

Jan Hjelt, Director General, Ministry of Economic Affairs and Employment, tel. +358 295 048 940 +358 295 048 940
Nico Steiner, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 295 049 001