Prime Minister Juha Sipilä's visit to a meeting of the service union PAM on his way to Brussels Thursday was an indication of how important it is for the government to reach a labour market deal that has some credibility.
Two weeks ago, the largest blue collar union federation SAK voted to support a package that would help make businesseses more competitive by reducing unit labour costs.
But it proved to be a hollow victory for the government since PAM, the largest SAK member union, rejected the deal outright.
Thursday afternoon, though PAM chair Ann Selin announced that the union had voted to continue talks on the proposal, board members decided 11 – 5 to support the proposition.
Selin: We have not accepted labour deal
Addressing the media Thursday afternoon, Selin said that the union is prepared to engage in further talks – but with very strict conditions that include improving the status of part-time workers.
"PAM has not accepted the competitiveness agreement," Selin pointed out.
Instead the union representing nearly a quarter of a million shop assistants, cleaners, security guards, hairdressers and other service workers will make a final decision on getting on board at the end of May.
The private sector business lobby EK, which represents the employers’ side in the labour market negotiations, has demanded PAM’s participation before sector-specific negotiations can begin.
Selin said that PAM’s decision means that the EK no longer has any excuse not to start the next round of discussions.
When PAM last voted on the labour market deal some weeks ago, the board rejected the agreement outright by 11 votes to five.
PM Sipilä: Ball in PAM's court
Following his brief pit-stop to talk to the PAM board Thursday morning Prime Minister Juha Sipilä said that it was now up to PAM to take the competitiveness programme forward by ensuring that it covered an adequate portion of the labour force.
When the union opted out of the deal, it was estimated that some 40 percent of SAK's membership would not participate what has been billed as a communal drive to help kickstart the economy.
"It is up to the labour market organisations themselve to evaluate the comprehensiveness [of the deal]. But if 80 percent of workers are on board then the impact on public finances will be significantly weaker,” the PM told reporters.
Sipilä said that if this attempt at brokering a deal between employer and employee representatives falls through, government would have to go back to the drawing board.
It remains to be seen what alternatives there are - two weeks ago Sipilä also said that there was no Plan B.