Local agreement

Local agreement - alasivu - UUSI työaikalaki

Procedures from the applicable collective agreement | Agreeing on occupational safety and health cooperation | Agreement enabled by the Employment Contracts Act | Agreements under the Working Hours Act | Agreement enabled by the Annual Holidays Act
 

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.

Agreements under the Working Hours Act

Please note: A new version of the Finnish Working Hours Act entered into force on 1 January 2020. The information on this page is based on the new Act. You can find the content according to the old Act here.

As a rule, the Working Hours Act (872/2019) constitutes mandatory law. However, there are several provisions in the Act that national social partners can derogate from by way of collective agreements. Certain matters can also be agreed locally.

Derogations by way of collective agreements

Section 34 of the Working Hours Act gives employers or national employers’ unions and national employees’ unions the right to collectively agree on derogating from the provisions concerning

  • regular working hours (section 5)
  • shift-based regular working hours (section 6, subsection 1)
  • period-based working hours (section 7)
  • motor vehicle drivers’ working hours daily working hours (section 9), and
  • the length of the adjustment period in the context of flexible working time arrangements, which must nevertheless not exceed 26 weeks (section 13).

National employers’ unions and employees’ unions also have the right to collectively agree on derogating from the provisions concerning

  • on-call arrangements (section 4)
  • jobs that can be performed at night, the maximum working hours of night workers within each 24-hour period, the arrangements for adjusting night work hours and the hours that can be worked at night (section 8)
  • the limits to flexible working hours, maximum flexible working hours accumulations and the length of the reference period (section 12, subsection 2)
  • the length of fixed-term part-time employment contracts (section 15, subsection 2)
  • consent for Sunday work (section 17)
  • the maximum length of the adjustment period for maximum working hours (section 18)
  • compensation payable for additional work and overtime as well as Sunday work (section 20)
  • time off work in lieu of monetary compensation for additional work and overtime as well as Sunday work (section 21)
  • termination of employment contracts in the middle of an adjustment period (section 22)
  • the calculation of the basic rate of additional work and overtime pay (section 23)
  • daily breaks (section 24)
  • daily rest periods, with the exception of compensatory rest periods (section 25)
  • daily rest periods of professional motor vehicle drivers (section 26)
  • weekly rest periods (section 27)
  • the waiving of the rules on weekly rest periods (section 28, subsection 1)
  • working hours adjustment schedules (section 29), and
  • shift rosters (section 30).

Employers who are subject to a universally binding collective agreement can directly enforce any provisions agreed on the basis of section 34 of the Working Hours Act. However, any provisions based on section 34, subsection 2 of the Working Hours Act that require agreement on a local level cannot be enforced.

Local agreements based on a collective agreement

Universally binding collective agreements can contain provisions that enable local derogations concerning regular working hours, shift work, period-based working hours, the daily working hours of professional motor vehicle drivers or the maximum length of the adjustment period for maximum working hours. In such cases, local agreements can be made within the limits set by the applicable collective agreement. Any local agreements must comply with the procedural regulations of the applicable collective agreement, with the exception of any provisions on negotiation procedures.

Who can make local agreements?

The parties competent to make local agreements are specified in collective agreements. Where a collective agreement identifies the shop steward as the party competent to agree on matters locally on behalf of the employees but no shop steward has been elected, local agreements can be signed by an elected representative within the meaning of the Employment Contracts Act or another representative of the employees or, in the absence of any such representative, a group of employees or all employees together.

How are local agreements made?

All local agreements must, as a rule, be in writing, unless the parties consider a written agreement unnecessary or the applicable collective agreement stipulates otherwise. Any agreements for periods of more than two weeks must be made in writing. Any agreements signed by an elected representative of the employees must be communicated to the employees no later than one week before the agreement is due to enter into force. Local agreements apply to all employees whom the personnel representative who signed the agreement must be deemed to represent. However, individual employees can choose to opt out of agreements concerning working hours, in which case they must notify their employer of the same no later than two days before the agreement is due to take effect.

Can local agreements be terminated?

Local agreements can be terminated. As a rule, the notice period for terminating local agreements is based on the applicable universal collective agreement. Unless otherwise stipulated in the applicable collective agreement or the local agreement itself, agreements made for an indefinite period can be terminated by giving two months’ notice. Agreements concerning regular working hours that are in force indefinitely can be terminated to expire at the end of the adjustment period during which notice is given. Fixed-term agreements of more than one year can be terminated after the first four months in the same way as agreements that are in force indefinitely.

Agreements between employers and individual employees

Employers can agree locally to individual employees regularly working longer hours than the ceiling set for regular working hours in the Working Hours Act (section 11). Agreements between an employer and individual employees are only possible in the absence of provisions on regular working hours laid down in the applicable collective agreement.  In the absence of a collective agreement, the aforementioned section of the Working Hours Act determines the boundaries for agreeing locally on regular working hours.

What can be agreed?

Employees’ regular daily working hours can be extended by a maximum of two hours under local agreements. Employees’ regular weekly working hours must average out at no more than 40 hours over a four-month period. However, the ceiling for weekly working hours is always 48 hours. 

How are agreements made and terminated?

Agreements between an employer and individual employees can be made for an indefinite period or on a fixed-term basis. Any agreements that are to remain in force indefinitely as well as any fixed-term agreements for periods of at least two weeks must be made in writing. 
Terminated agreements expire at the end of the adjustment period during which notice is given. Fixed-term agreements of more than one year can be terminated after the first four months in the same way as agreements that are in force indefinitely.

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).