Pay in Finland - Collective agreements
In Finland, employers’ and employees’ organisations enter into public and private collective agreements that specify terms and conditions of employment in more detail than the law.
A collective agreement may be confirmed as universally binding by the Board for the Ratification of Validity of Collective Agreements. Universally binding collective agreements are binding in their respective sectors also on unaffiliated employers, i.e. employers that do not belong to an employers’ organisation. Any clause in an employment contract that violates the corresponding provision in a universally binding collective agreement is null and void.
In Finland, there are around 160 universally binding collective agreements.
When an employer wants to know which generally binding collective agreement they must adhere to, the answer depends on the sector in which the employer’s company operates.
The employer company main sector of activity and the sector of work performed by posted workers are compared to the scope of application of the collective agreement:
- E.G. Technology industry collective agreement
Technology companies carry out operations such as the processing and manufacture of metals or operations may be related to these or service business activities focused on the repair, maintenance and installation of machines, equipment, hardware, systems or similar. The application of the collective agreement does not depend on the employee's profession, but covers, among other things, mechanical and electrical work.
- E.G. the construction sector’s collective agreement
The collective agreement in the building construction sector covers workers such as carpenters, construction workers, bricklayers, plasterers, tilers, roofing workers, tower crane operators and fitters, iron workers, cement layers, element fitters and scaffolding fitters.
Occupational safety and health authorities and labour market organisations can help an employer determine the correct collective agreement.
Key workers’ unions
- Industrial Union
- Finnish Construction Trade Union
- Finnish Electrical Workers´ Union
- Transport Workers’ Union AKT
Private service sector:
- Service Union United PAM
- Union of Private Sector Professionals ERTO
- Trade Union Pro
Key employer unions
- Technology Industries of Finland
- Confederation of Finnish Construction Industries RT
- Finnish Forest Industries Federation
- Employers’ Federation of Road Transport
Private service sector:
- Finnish Commerce Federation
- Finnish Hospitality Association MaRa
- Service Sector Employers Palta
In addition to collective agreements, the central labour market organisations may agree on other matters concerning working life. How such agreements should be complied with alongside collective agreements is specified in each collective agreement.
- Central Organisation of Finnish Trade Unions SAK
- Finnish Confederation of Professionals STTK
- Akava – Confederation of Unions for Professional and Managerial Staff in Finland
- Confederation of Finnish Industries (EK)
Determination of salary
When determining salaries, it is always necessary to find out which collective agreement is applicable in the sector on the basis of which the following are determined:
- an hourly or monthly salary, contract salary and
- job-specific salary component as well as
- possibly a personal salary component.
Collective agreements may include job-specific provisions on placement in pay classes, but some collective agreements base placement in pay classes on
- how demanding one’s work tasks are or
- their so-called scoring, on which the collective agreement generally provides instructions.
Special attention must also be given to regulations related to working hours, such as
- any separate pay components related to working hours (compensation for shortened working hours and holiday compensation); or
- working time balance allowance.