What does the collective agreement dictate in an employment relationship? It may come as a surprise to many that the terms of employment are not always based on law, but are agreed upon in collective agreement negotiations.

The collective agreement guarantees more rights than the law

In Finland, several laws provide the employee with security and form the basis of the terms of employment, perhaps the most important of which are the Employment Contracts Act, the Working Hours Act and the Annual Holidays Act. The content of the laws does not yet guarantee employees many familiar benefits, such as holiday pay.

Holiday pay, which is half a month's pay paid (or exchanged for time off) in the summer, is not based on the law on annual leave but on collective agreements. The Employment Contracts Act also defines the right to care for a sick child and maternity leave, but without pay.

This means that the employer is not obligated to pay salary for maternity leave, for example, on the basis of the law alone, but the pay is agreed in the collective agreement.

Nor does the Employment Contracts Act define any longer paid sick leave, but only mentions the payment of salary for the day of illness and the following nine working days.

In sectors where there is no collective agreement (so-called non-contractual sector), the receipt of the above-mentioned benefits is based solely on the employer’s goodwill. There have also been instances where, for example, general increases in salaries have not been paid at all in non-contractual sectors.

Few conditions of employment are a given

The validity of the new collective agreement is always agreed in connection with the collective agreement negotiations, after which new negotiations will be held.

All the matters contained in the previous collective agreement are open in the new negotiations, i.e. nothing will be transferred from the old collective agreement as such to the new one without negotiations.

Many of the terms and conditions of the employment relationship that are considered clear and favorable to employees are renegotiated in connection with each collective agreement. This fall, negotiations will continue in some sectors on whether holiday pay or salary will be paid for family leave. Salary increases paid to everyone as a general increase are also usually agreed in the negotiations.

What happens if there is no collective agreement?

If a resolution on a new collective agreement cannot be reached, industrial action may be pending at the end of the validity period of the previous agreement. These measures may include, for example, an overtime ban or a strike. Collective agreements generally include a labor peace agreement that guarantees that strikes against the collective agreement (employees’ terms of employment) are not possible during the validity of the collective agreement. However, after the end of the collective agreement, its validity will continue with retrospective effect until a new solution is reached.

The solution is primarily sought through agreement, but sometimes measures exerting pressure are necessary to speed up negotiations. A strike is an extreme measure and the participation and support of everyone working in the industry is needed at this time.

Who represents Bachelors of Business Administration in collective agreement negotiations?

The interests of Bachelors of Business Administrations are promoted through the negotiating organizations of Akava, whose activities include experts from our office and our members who act as personnel representatives in different fields.

Bachelors of Business Administration and other Akava employees working in the private sector are represented in the negotiations by the Federation of Professional and Managerial Staff YTN. In the public sector, the contracting party of Akava’s members is the Negotiation Organisation for Public Sector Professionals JUKO.

Make sure your interests are represented in the collective agreement negotiations: