Have you ever stopped to think about what matters related to remuneration are regulated by law and what is defined by the collective agreement?

For example, we often forget the fact that legislation does not mention the amount of minimum wage or holiday pay. Especially this fall, when the labor market situation is tense due to changes driven by the government and the political strikes last spring, it is good to clarify why collective agreements generally benefit employees.

The Employment Contracts Act only stipulates that if the collective agreement is not complied with, the employee must be paid a normal and reasonable salary for the work.

In the negotiations between employer and employee unions, the collective agreement has usually defined in more detail than the law salaries and various salary supplements or parts that the employee receives. This means that it is not necessary to negotiate these separately every year or every time when changing jobs.

General increases guarantee purchasing power

Many collective agreements have minimum wage tables that guarantee a reasonable and industry-appropriate salary. The tables can have different levels based on the demands of the tasks or, for example, based on experience supplements. However, not all collective agreements have such a precise definition of the minimum wage.

The tailgate solution determines the minimum increase to be distributed if the workplace cannot agree on a local solution. In other words, the law does not stipulate mandatory salary increases, and index increases are not automatically applied to salaries.

If there were no collective agreement, everyone would have to agree on the salary increases themselves with the employer. How many people could do this every year? And would this be possible with a slightly more reluctant employer?

The size and distribution of salary increases will once again play a significant role in the negotiation rounds this fall. The general increases are intended to guarantee at least the preservation of purchasing power. However, this round will continue to present its own challenge to salary increase negotiations due to persistently high inflation and a significant weakening of purchasing power. How can we secure the salary level of our members in the current situation?

Holiday bonuses and many remunerations are agreed in collective agreements

Holiday bonus is considered a fairly obvious benefit in Finland, but there is no record of holiday bonus in the Annual Holidays Act. It depends on the applicable collective agreement whether holiday bonus is paid and in what amount.

Nowadays, the trend in negotiations seems to be that the employer side wants to reduce the holiday bonus. It would be a major loss for the employee if, on average, half a month’s salary were suddenly not received due to switching to comply with the Annual Holidays Act instead of the collective agreement or if the company-specific collective agreement did not mention holiday bonus.

The Working Hours Act regulates compensation for additional and overtime work and Sunday work at a very precise level, but possible evenings, Saturdays and holiday eves, as well as on-call and emergency work remuneration are often already agreed in the collective agreement. In collective bargaining negotiations between unions, bonuses are often increased by a general increase. Of course, it depends a lot on the nature of the work and the working hours whether these are paid to the employee at all.

The bonus to be paid to the shop steward and occupational safety and health representative and its amount are also agreed on in the collective agreement.

Read more about collective agreements

The ABC of collective agreement negotiations