At a demonstration organised by trade unions on Thursday, Minister of Employment Arto Satonen (NCP) told Helsingin Sanomat that more local negotiations on pay and conditions would have a positive impact on employment levels, citing a survey conducted by the Federation of Finnish Entrepreneurs' (Suomen Yrittäjät in Finnish).
At present, employers must stick to sector-wide agreements unless they agree changes with shop stewards.
"For example, the extension of local bargaining to workplaces without union representation has an impact, according to a survey by the Federation of Finnish Enterprises, but there are no studies that can prove this beyond doubt. The regulation of peace between employers and employees, on the other hand, affects how Finland is seen as an investment environment."
Local agreements offer a mechanism for adapting broader collective bargaining terms of employment to the specific needs and conditions of individual workplaces.
The Federation of Finnish Entrepreneurs survey Satonen pointed to has since been called out by many researchers for its lack of scientific rigour, including by Antti Kauhanen, Research Director at the Research Institute of the Finnish Economy (Etla), who has studied the subject.
"There is no research design in the survey that would allow an analysis of the impact of the changes," Kauhanen said.
Etla's Kauhanen said the research approach between a survey and research study is very different. Economic studies are not based on surveys, but on large statistical data sets. In the Federation's survey, only entrepreneurs were asked for the findings.
"It has asked members whether, if local agreements were expanded, they would increase the willingness to employ. Many have answered that it would. This suggests that it may have some relevance — but it does not tell us what relevance it would have in practice," Kauhanen said.
Minister of Employment Satonen responded to Kauhanen's comments on Sunday, telling Finnish News Agency STT that although the survey of entrepreneurs by the Federation of Finnish Enterprises was not an economic study. However, the minister still said its results mean that the expansion of local agreements will have positive effects.
No study on local agreements
Etla's Research Director Kauhanen told Yle there have been no studies on the employment effects of local agreements in Finland or elsewhere in Europe.
"Much more research has been done on the impact of local agreements on wages. I think the reason is quite simply what the statistics allow. That is why we are in the dark here. It is a terribly difficult research question," Kauhanen said.
He compared the question with the employment impact of weakening worker protections, which has also been much discussed both during Juha Sipilä's (Cen) government and now.
"It is quite well known that the net impact on employment is very close to zero. Weakening the protection against dismissal will increase both redundancies and recruitment, but it will increase them by roughly the same amount, so the net effect is pretty much zero," Kauhanen said.
Politicians doing their job
Kauhanen said he believes that the government's objective is clearly set out in its programme.
"I think the content of the reforms is very clear. The issues of local agreements would remain more or less the same as they are in collective agreements at the moment, but it would extend the possibilities in non-organised companies and companies without a shop steward.
Kauhanen says that politicians now have to do their own job and make decisions with the information they have available.
"This is indeed a question to which there is no clear answer in the research or no research on what the employment effects of these changes would be. That is why they are not mentioned by the Ministry of Finance," Kauhanen said.
The government has set up a tripartite working group on the reform, which is due to complete its work in the near future.
EDIT 5.2.2024 Added a description of local labour negotiation.
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