Local agreement

In a broad sense, ‘local agreement’ means any action taken by employer and employees to promote shared understanding of matters at the workplace. ‘Agreement’ may simply refer to a process in which parties, as the result of negotiation, achieve a shared understanding of a particular situation and its significance.

An agreement may also be a legal transaction binding upon and deliberately entered into by both parties.

Collective agreements contain comprehensive provisions for instance on the compensation payable for work and on working hours. In the narrow sense, 'local agreement' means agreeing on the terms and conditions of employment at the workplace based on the provisions of the applicable collective agreement.

Procedures derived from the applicable collective agreement

The procedures for local agreement are determined in the applicable collective agreement, and they must always be observed. An agreement deviating from the provisions of a collective agreement is only possible when the collective agreement specifically allows or authorises local agreement on a particular matter in derogation from the collective agreement or when it involves how to apply a specific provision of the collective agreement at the workplace.

Terms and conditions of employment more advantageous to the employee than required by law and the applicable collective agreement may always be agreed on locally. Similarly more advantageous terms and conditions of employment may also be agreed in an individual employee’s employment contract.

Terms and conditions that conflict with the collective agreement may not be agreed upon locally or in employment contracts. A shop steward or personnel representative must always have a separate authorisation from the party concerned if local agreement is about to change anything agreed on in an individual employee's employment agreement.

Local agreement

The parties to a local agreement may generally agree among themselves whether the local agreement is to be concluded in writing or verbally. However, the employment legislation or collective agreement may require a local agreement to be executed in writing in certain situations.

Local agreement may address matters concerning which there are no provisions or rules in the employment legislation, collective agreements or employment contracts. Examples of the latter are telecommuting, mobile work, work capacity issues and wellbeing at work. Also, if the employer so wishes, local agreement may be made on matters that fall under the employer's right to direct.

In matters other than those related to the terms and conditions of employment, a shop steward or personnel representative must always have separate authorisation to act on behalf of the parties concerned.

Agreeing on occupational safety and health cooperation

Cooperation in occupational safety and health matters is provided for in the Act on Occupational Safety and Health Enforcement and Cooperation on Occupational Safety and Health at Workplaces (44/2006), also known as the OSH Enforcement Act. Certain matters covered by this Act may be agreed on between national labour market organisations or locally at a workplace.

Agreement between national labour market organisations

Cooperation on occupational safety and health may be agreed upon differently by a written agreement concluded by the national employers’ and employees’ organisations. This option is also available in the public sector, for instance to the comparable authorities in central government, local government and the Church of Finland.

The following rights provided for in the OSH Enforcement Act may not, however, be restricted even by national collective agreement:

  • the occupational safety and health representative’s right to gain information (section 32),
  • the occupational safety and health representative’s right to interrupt dangerous work (section 36),
  • protection against termination in the case of occupational safety and health representatives (section 37);

and the following rights provided for in the Act may not be revoked:

  • occupational safety and health representative’s and deputy representative’s right to receive training (section 33),
  • time allocation of occupational safety and health representatives (section 34(1,3)), and
  • compensation for the loss of income to the occupational safety and health representative (section 35).

Agreement at the workplace

The organising of cooperation on occupational safety and health may be agreed locally at the workplace in a manner suitable for local circumstances. The parties to such a local agreement are the employer and the occupational safety and health representative or other personnel representative. If no personnel representative has been elected at the workplace, an agreement may be entered into by the entire personnel or a personnel group.

The agreement must guarantee all employees equal potential to participate in the discussion of occupational safety and health matters in cooperation. The agreement is binding on the employees whom the personnel representative signing the agreement is considered to represent.

The employer must notify employees in writing of the agreement to be observed at the workplace. An agreement on the organising of cooperation on occupational safety and health is valid indefinitely and may be terminated at two months’ notice.

The following rights provided for in the Act on Occupational Safety and Health Enforcement and Cooperation on Occupational Safety and Health at Workplaces may not be restricted in a local agreement:

  • occupational safety and health representative and deputy representatives (section 29),
  • the occupational safety and health representative’s right to gain information (section 32),
  • occupational safety and health representative’s and deputy representative’s right to receive training (section 33),
  • time allocation of occupational safety and health representatives (section 34),
  • compensation for the loss of income to the occupational safety and health representative (section 35).
  • the occupational safety and health representative’s right to interrupt dangerous work (section 36),
  • protection against termination in the case of occupational safety and health representatives (section 37),
  • occupational safety and health committee members’ time allocation and compensation (section 40),
  • working premises of the occupational safety and health representative and occupational safety and health committee (section 41).

Agreement enabled by the Employment Contracts Act

The Employment Contracts Act (55/2001) is compelling legislation. However, it does contain provisions from which national employers’ and employees’ organisations may derogate in collective agreements. An individual employer and employee concluding an employment contract may only derogate from those legislative provisions in which there is a specific reference to contract law.

Agreement between national labour market organisations

National employers’ and employees’ organisations have the right to derogate by national collective agreement from the following provisions of the Employment Contracts Act:

  • benefits depending on the duration of the employment relationship (Employment Contracts Act, chapter 1 section 5),
  • employer’s obligation to offer work to a part-time employee (Employment Contracts Act, chapter 2 section 5),
  • pay during illness (Employment Contracts Act, chapter 2 section 11),
  • payday and pay period (Employment Contracts Act, chapter 2 section 13),
  • advance explanation and hearing the employee in case of lay-offs (Employment Contracts Act, chapter 5 section 3),
  • lay-off notice (Employment Contracts Act, chapter 5 section 4),
  • employer’s right to deduct lay-off period pay from the pay for the period of notice (Employment Contracts Act, chapter 5 section 7(2)),
  • re-employment of an employee (Employment Contracts Act, chapter 6 section 6),
  • procedure for terminating an employment contract (Employment Contracts Act, chapter 9),
  • grounds for lay-off: the maximum lay-off period may not be extended nor the geographical extent of the requirement to offer employment restricted (Employment Contracts Act, chapter 5 section 2(1)2 and section 2(2)).

Agreement at the workplace

The following provisions may be derogated from in an employment contract:

  • general provisions concerning periods of notice (Employment Contracts Act, chapter 6 section 2) (the period of notice may not be longer than 6 months),
  • continuation of the employment relationship after the employee has reached the age of termination,
  • working during the maternity allowance or parental allowance period.

Agreement enabled by the Working Hours Act

The Working Hours Act (605/1996) is compelling legislation. However, there are several provisions in it that may be derogated from by national labour market organisations in public or private collective agreements. Certain matters may be agreed on at the workplace.

Agreement between national labour market organisations

National employers’ and employees’ organisations have the right to derogate by national collective agreement from the following provisions of the Working Hours Act:

  • regular working hours (section 6),
  • working hours in period-based work (section 7),
  • working hours of motor vehicle drivers (section 8),
  • working hours and stand-by time (sections 4 and 5),
  • the flexible period shortening or lengthening daily working hours under the flexible working hours system. (section 13(2))
  • the duration and content of an agreement concerning reduced working hours (section 15(2)),
  • remuneration payable on additional work and overtime (sections 22–25),
  • night work (section 26(1)),
  • shift work and night shifts in period-based work (section 27),
  • daily breaks (section 28),
  • daily rest period (section 29),
  • daily rest period of a motor vehicle driver (section 30),
  • weekly free time (section 31),
  • weekly free time (section 32),
  • Sunday work (section 33),
  • the working hours adjustment system (section 34), and
  • the shift roster (section 35).

Agreement at the workplace

An employer obliged to comply with a universally binding collective agreement and the occupational safety and health representative or other personnel representative or, if none such has been elected, the entire personnel or a personnel group collectively, may enter into an agreement on the organisation of regular working hours in the manner and within the limits prescribed in the collective agreement.

In concluding such an agreement, the provisions regarding approval of local agreement by the parties to the collective agreement need not be complied with. The employer must provide employees the opportunity to select a representative from among their number before the beginning of any agreement negotiations concerning regular working hours.

The employer and any individual employee may agree on the detailed application of such an agreement on regular working hours within the limits specified in that agreement. The employer and employee may also agree on flexible working hours as per the Working Hours Act.

Also, unless the collective agreement specifies otherwise, the employer and employee may agree on the extending of regular daily working hours by a maximum of one hour under the Working Hours Act. In such a case, the average weekly working hours must be no more than 40 hours over an adjustment period of 4 weeks. The weekly working hours shall not exceed 45 hours.

An agreement on regular working hours must be executed in writing if it is meant to be in force for more than two weeks. An agreement meant to be in force for less than two weeks may be concluded verbally if the parties agree that a written agreement is unnecessary, unless the applicable collective agreement specifically requires a written agreement.

Agreement enabled by the Annual Holidays Act

The national labour market organisations may derogate from several provisions of the Annual Holidays Act (162/2005) in public and private collective agreements. Certain matters may be agreed on at the workplace.

Agreement between national labour market organisations

National employers’ and employees’ organisations have the right to derogate by national collective agreement from the following provisions of the Annual Holidays Act:

  • the holiday season (section 4),
  • the period equivalent to time at work, assuming that the agreed arrangement guarantees the employee at least the annual holiday provided for in the Annual Holidays Act (section 7),
  • the right to take leave of an employee who has worked for the same employer under repeated fixed-term employment contracts (section 8(2)),
  • the calculation of annual holiday pay and holiday compensation (sections 9, 10, 11, 12, 13 and 14),
  • taking a holiday exceeding 12 weekdays in one or more segments (section 21),
  • carried-over holiday (section 27), and
  • using winter holiday for other reduction of working hours provided for in the collective agreement.

Agreement at the workplace

The employer is allowed to apply the annual holiday provisions of the applicable collective agreement also in the employment relationships of those employees who are not subject to the collective agreement but with whom the employer is obliged to comply with the provisions of the collective agreement as per the Employment Contracts Act (436/1946).

In addition, the employer and employee may agree within the limits specified in the Annual Holidays Act on:

  • the timing of the annual holiday,
  • taking the portion of the holiday exceeding 12 weekdays no later than one year after the end of the holiday season in question, and
  • taking the portion of the annual holiday exceeding 24 weekdays in the form of shorter working hours (only at the employee’s initiative).