Collective agreements play a significant role in the field of Finnish Labor Law System. Vast majority of the working age population belong to the coverage of collective agreements. Due to that large coverage and a specific section in the Employment Contracts Act, a variety of collective agreements have a generally binding nature. Collective agreement is usually negotiated between trade union and employer’s organization in the sectoral or the national level or with the management of the company (company-level agreements).

Entering to agreement might precede a long-lasting bargaining process. Agreements are made for fixed-period and are usually valid from 1 to 4 years depending on bargained content. At the end of the period new negotiations begin in particular order and the parties have new strategic objectives to achieve. If parties do not reach the agreement through negotiations and industrial actions may occur, disputes might reach a settlement at the Finnish National Conciliator’s office. In Finland a lot of public and political interest can be related to nationwide negotiationround.

In general, agreements are field-spesific and they apply to the spesific group of employees. For example in the field of industri, blue-collar workers and white-collar workers have normally their own agreements in which terms and conditions might differ depending on the position of employee.

Most of all, collective agreement is a settlement of employment conditions. It normally consists regulations concerning for example minimun wages, working hours, annual holidays, trade union official system and other procedular regulation. Thus it supplements, but also includes, several options to deviate from the Finnish employment legislation. Every employer and local trade union must obey the argeement and also due to agreement’s generally binding nature, it obliges also employers which are not members of employer’s organizations.

Nevertheless collective agreement’s main task is to maintain industrial peace in the labour market. That means a situation in which industrial actions, such as strikes, boycotts or lock-outs, are not in progress. The parties to collective agreement are bound not to take industrial actions when agreements are in force, so they are under the obligation to ensure industrial peace laid down in the agreement. Therefore these agreements also have preventive role. However if any legal disputes take place when an agreement is in force, whether concerning industrial actions or interpretation of the agreement, those dipustes belongs to the jurisdiction of the Labour Court.

Written by Hanna Lahti