Opportunities for local collective bargaining to expand

On 19 December 2024, the President of the Republic approved legislative amendments that will enable more local collective bargaining in companies. The amendments will enter into force on 1 January 2025.

Increasing local bargaining is one of the Government’s labour market reforms. As a result of the reform, local bargaining will be possible regardless of whether the company belongs to an employer association or has a shop steward.

Company-specific collective agreements can 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 will also be possible for company-specific collective agreements. Moreover, the party representing the employees’ side can be a member association of a national employee association.

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

Yellow collective agreements to 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 must be considered in addition to its formal purpose.

Local bargaining bans in the field of general applicability will 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 will remove the bans on local bargaining, and the Act will 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 will be increased. The local agreement must be submitted to the occupational safety and health authority, and a negligence fee may be imposed for neglecting the obligation. However, this does not apply to an agreement concluded with an individual employee.

Local bargaining to be allowed in companies without a shop steward

As a rule, the parties to local collective bargaining will 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 will continue to be concluded with the shop steward.

Going forward, the parties to a collective agreement may 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 be concluded with the elected representative.

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

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

Ministry of Economic Affairs and Employment to monitor the impacts of the proposal

The Government submitted its proposal on legislative amendments to Parliament on 5 September 2024. Parliament approved the amendments on 13 December 2024, but imposed a requirement on the Ministry of Economic Affairs and Employment to monitor the effects of the proposal. According to a resolution by Parliament, the Ministry must prepare a report on the impacts of the amendments on the contracting parties by the end of 2026. In particular, the report should assess the need for and means to enable local agreement with personnel or a personnel group.

Inquiries:
Jaakko Aromaa, Special Adviser to the Minister of Employment, tel. +358 +358 295 047 110
Elli Nieminen, Chief Specialist, Ministry of Economic Affairs and Employment, tel. +358 295 047 056