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Freedom of association rights in Finland are guaranteed by a combination of Constitutional and statutory protections and are enforced by a strong and wide union presence in the workplace, the possibility of collective action and resort to the courts. The Finnish Constitution, the latest version of which took effect in March 2000, protects freedom of association rights for trade unions and, by extension, the right to strike. Other statutes, including the Employment Contracts Act and Collective Agreements Act, protect trade unions’ collective bargaining rights and prohibit discrimination based on union status. Public officials have an ongoing duty to ensure that these fundamental human rights and liberties are guaranteed.

Trade unions have a long history in Finland (e.g., SAK is 100 years old) and they still are powerful players in the industrial relations and political arenas. Out of a total population of 5.23 million, Finnish trade unions estimated that they had more than 2.1 million members in 2005. The Central Organization of Finnish Trade Unions (SAK) had 24 unions and 1.046 million members, the Confederation of Unions for Academic Professionals in Finland (AKAVA) included 32 unions and 448,200 members and the Finnish Confederation of Salaried Employees (STTK) had 20 unions and 640,000 members. Finnish unions continue to merge within their respective confederations. Up to 20% of the union members are either retired, self-employed, students or unemployed, according to government studies.

Union membership actually has slightly increased during the past decade, defying the trend among most European countries. More than 80% of Finnish workplaces have an employee representative, most of whom are union stewards. The vast majority of Finns (89%) surveyed in 2004 believe unions are important and a majority support their work, with SAK receiving the highest level of support (69%). Density is another key measure of union strength, and it stood at about 74%, as of 2004, one of highest rates in Europe. The level has declined from a rate of 85% in 1993. The collective bargaining coverage rate is even higher, about 93%, according to the OECD, due to a process that extends the effect of agreements.

Trade unions also routinely exercise their right to strike. In 2005, 365 disputes caused the loss of 672,904 working days due in large part to a bitter strike in the paper industry. In general, however, the number and scope of strikes has declined in recent years. In the period from 2000 to 2004, Finland averaged 51 working days lost per 1000 employees, which was lower than the average for 14 European Union countries during the same period. Despite the high level of union density and continuing industrial action, Finland is still ranked among the most competitive countries in the world, according to the World Economic Forum.

Viewing another freedom of association indicator, trade unions are vital partners in national-level collective bargaining that has been instrumental in setting wage rates as well as in the country’s ongoing social dialogue regarding labour market reform and the extensive tripartite negotiations that have taken place in recent years to implement new labour legislation. Union representatives sit on national-level organizations such as the Labour Court, National Committee for Labour Protection, Council for Labour Affairs, and Labour Council. Finland ratified ILO Conventions No. 87 in 1950 and No. 98 in 1951. International organizations who monitor freedom of association issues -- such as the ILO, Council of Europe, UN’s Office of the High Commissioner for Human Rights, and International Confederation of Free Trade Unions -- generally have not found fault with the country’s current application of freedom of association standards (with some exceptions noted below.)

RIGHT TO FORM AND JOIN TRADE UNIONS

Finland has broad protections for workers to form and join trade unions, a key building block to ensure effective freedom of association. The Constitution guarantees all Finnish workers have the “freedom to form trade unions and to organise in order to look after other interests.” Unions also have the “right to form an association without a permit.” Any agreement that violates the freedom of association is “null and void” and employers are prohibited from preventing workers’ ability to exercise this right. Id. Workers may pursue civil or criminal cases that involve a freedom of association violation. An employer may be fined if it is guilty of preventing workers from organizing, joining or participating in a union or for interfering in the appointment or election of any union or worker representative.

The Employment Contracts Act provides further protection. Workers and employers have the right to form and join associations and “to be active in them.”  The Associations Act (503/1989) details the registration process. The registration test, easily satisfied, requires that a union state a common, clear and non-profit goal that is not against the law or accepted moral standards. Pursuant to the Constitution, any union fulfilling those criteria must be registered. If a request for registration is denied, a union has due process rights to appeal. Unions do not need permits or pay any formation fees. Finland does not interfere with unions’ internal organization and activities, selection of members or election of officers. Finnish unions also have active international activities.

As for the right to join unions, the Constitution guarantees that workers are free “to be a member or not to be a member of an association and to participate in the activities of an association.” Civil servants have the right to form and join unions, including members of the military.  Closed shops are barred. Practical barriers to membership also have been removed. Union membership fees are tax deductible and, pursuant to agreement, most union dues are collected by employers according to a check-off agreement. Union membership also has been bolstered because unions help to manage the unemployment insurance system in Finland. Workers who are members of one of the unemployment insurance funds run by the union confederations receive additional benefits over the level provided by the government.

Unions and workers rely on elected representatives, including union stewards, worker representatives, and safety and health representatives, to represent their interests at the plant level. Collective agreements govern the rights and duties of union representatives, who are elected locally and are responsible for such critical tasks as monitoring and negotiating agreements, ensuring compliance with labour laws and handling grievances. SAK, for instance, has about 90,000 representatives. Stewards have time off to perform work-related union duties, and some representatives are allowed to work full time, as specified by agreement. Companies also must provide unions with free and “suitable facilities” at work.  That right has been expanded to include resources such as phones and electronic access to the employer’s telecommunication resources. The 2002 national multi-year agreement between union and employers’ confederations provides that union stewards have the right to use employer’s computer facilities and e-mail and Internet access.

If there is no union steward at a workplace, then workers may elect a representative. Workers may authorize the representative, via majority decisions, to represent them on work-related issues. As specified in many collective agreements, representatives are “entitled to any information that they need to carry out [their] duties.” Companies must pay representatives for the reasonable time needed to perform their duties. The ILO has noted that ECA, Chap. 13, § 3 language does include union stewards. However, in practice, collective agreements provide union stewards the same rights and status as elected representatives.

In companies with at least ten employees, workers also have a right to elect (at least every two years) three safety and health representatives. The representative is responsible for representing workers on safety and health issues and has a right to obtain relevant company documents. Employers must give representatives a reasonable period of paid time off (not less than four hours per month) to perform their duties and receive training. Companies with at least 20 workers must create a safety and health committee.

Another source for worker representatives is the Act on Cooperation within Undertakings, which promotes private-sector workplace cooperation and workers’ rights to information and consultation. (For civil servants’ rights, see Act on Cooperation within Government Agencies and Public Services (651/1988), which covers all such employees.) Unions had been critical of the Act’s implementation, and it was revised in early 2007, following lengthy tripartite negotiations. As of 1 January 2008, it will apply to workplaces with at least 20 workers, and as a result will include an extra 2,800 companies with 66,000 employees within its scope. The Act provides that if there are no union stewards at a worksite, or if non-union employees comprise a majority of the workforce, then those employees can elect their own staff representative for a one year term. A manager-worker co-determination committee also may be formed, with the worker representatives elected annually. The tripartite Labour Council determines whether the Act applies to particular companies.

The Cooperation Act outlines a long list of workplace issues (e.g., changes in duties, layoffs, plant closure) on which worker representatives have information and consultation rights. As framed, employers are required to implement a decision on any issue subject to the cooperation only after the required, but non-binding, consultations with workers have been completed. Worker representatives are guaranteed paid work time to accomplish their duties. The new law also changes the penalties for violations of the act from a maximum amount of 20 months of pay to a maximum amount of €30,000.  

Since 1990, the Act on Personnel Representation in the Administration of Undertakings entitles workers, in companies with more than 150 workers, to at least one and as many as four elected representatives on the board of directors (or a supervisory board), if requested by at least two unions representing a majority of workers. Worker representatives, appointed by unions, have similar rights as other board members, except for issues dealing with trade union relations, salary issues, or dismissal of management. Also, a 2004 law provides Finnish workers in very large European companies registered in Finland with information, consultation and participation in decision-making rights. Under both of these laws, employee representatives are protected against discriminatory dismissal, are paid for performing work-related duties and companies may be fined for failing to adhere to the law.

RIGHT TO COLLECTIVE BARGAINING

Collective bargaining is not cited in the Finnish Constitution, but Finland has a strong tradition of active and widespread collective bargaining between trade unions and employers, generally conducted in the absence of government interference. (Of course, the different levels of government must conduct their own collective bargaining negotiations with public sector employees.) Statutes govern the basic terms of collective agreements, their scope and application, dispute resolution, and legal enforceability.

The Collective Agreements Act (CAA) states that only registered trade unions and employers and employers’ associations have the ability to negotiate collective bargaining agreement. Unions do not face any substantive representativeness hurdles as long as they are registered and work to “safeguard” their interests of their members. Unlike Ireland or Germany, for example, unions do not need to reach a minimum size or strength in order to engage in collective bargaining.  In Finland, collective agreements are reached at the local, industry and national level. Finland does not have any minimum wage, so the most common negotiation issues involve pay and conditions of employment.

There is a decades-long tradition of tripartite bargaining at the national level that creates guidelines on wage growth. These agreements are not legally binding per se, but they provide a framework for separate collective bargaining agreements negotiated at lower bargaining levels, in particular at the sectoral level. As a general matter, in recent years national agreements have been successfully adopted. Union confederations also have successfully negotiated “general agreements” with employers’ confederations at the national level that are indefinite in length, and deal with topics such as the rights of union stewards and co-determination procedures.

Another fundamental feature to ensure a fair and enforceable collective bargaining system is that collective agreements, once signed and sent to the government for registration, are treated as binding contracts on the signatories, including the members of union and employers’ confederations. Employers also must adhere to the terms and conditions of an applicable agreement for non-union workers (unless such workers are not covered by the agreement). There is no explicit requirement that the parties must bargain in good faith, but that has not proved to be an issue given the depth of union density and the fact that unions have wide-ranging collective action power, as described below. A breach may result in damages up to €23,500.

Collective agreements also bind any employer who attempts to withdraw after-the-fact from the confederation that signed the agreement. Employers recently have tried to switch to different confederations, with limited success and over the objections of trade unions, when they perceived that the terms of one collective bargaining agreement was more favorable than another. This occurred twice in 2005 and unions launched strikes and also sued in the Labour Court to enforce their respective collective agreement. The Labour Court decided both cases, involving the companies Uponor (TT:2005-126) and Are (TT:2005-102), by determining which collective bargaining agreement applied first in time to the company. In the Uponor case, the employer was allowed to switch confederations and apply a new collective agreement which bound it first in time. In the Are case, the Court held that the company was not allowed to switch collective agreements because it already was bound by law.

Perhaps the most signifcant feature of collective bargaining in Finland is that virtually all Finnish workers are covered by the terms of a collective agreement. The government has the right to extend collective agreements beyond the scope of the signatories to include an entire sector. As of 2001, a government-run commission regularly reviews registered collective agreements to determine whether they are general applicable, considering fact-based tests such as whether the agreement is national in the scope, and the number of employees in the sector covered by the agreement. Thus, a national agreement may bind all applicable companies, even if they are not members of the employers’ confederation that signed the agreement, and all workers in a sector, even if they are not union members. Employers are required to observe the terms and conditions of any national collective agreement (known as a “generally applicable collective agreement”) that is considered representative in the sector. Any term that conflicts with the generally collective agreement is void.

RIGHT TO STRIKE

Finland’s Constitution does not mention the right to strike. However, in a 2003 opinion, the Finnish Parliament’s Constitutional Law Committee found that the right to strike falls within the scope of the Constitution’s freedom of association rights (§ 13 specifies that a member has the right to “participate in the activities of an association”). Several statutes, primarily the Collective Agreements Act, Act on Mediation in Labour Disputes, and Employment Contracts Act, along with collective bargaining agreements, regulate industrial actions.

In the private sector, lawful collective action by a union must be approved according to its internal rules. And even unaffiliated workers, who are not governed by a collective agreement, may strike. Collective action may take a wide variety of forms, notably political strikes, picket lines, overtime bans, blockades, boycotts, and sit-down strikes. Sympathy strikes are lawful, even during the course of an agreement, as long as the primary strike also is legal and the secondary action does not effect the employment terms of the sympathy strikers. The Finnish government even has supported the union’s position in Laval un Partneri Ltd v Svenska Byggnadsarbetareforbundet, a case now pending before the European Court of Justice. In Laval, a Latvian employer challenged the right of Swedish unions to use collective action in order to force it to sign a collective agreement in Sweden. Also, companies can use lockouts. An extended lockout occurred in 2005, when paper industry employers locked out 25,000 employees for more than six weeks. The bitter dispute ended when the parties accepted a conciliator’s proposal for a three-year collective agreement.

No industrial action by either party – the peace obligation – is allowed during the course of a collective agreement, either in the private or public sector.  Finnish collective agreements also require unions to work to prevent members from striking during the term.  After an agreement has ended, unions can strike. If a strike is lawful, then workers are protected against dismissal and damages. Workers may even be protected in the case of an unlawful strike. The Supreme Court held in a 1992 dismissal case that a union member was unjustly fired without notice when his union instructed him to participate in an illegal strike. However, an illegal strike may lead to claims for damages against a union (up to €23,500) and its members. For example, in December 2006, the Labour Court levied an enormous penalty, €271,800 in fines, against a number of Finnish unions who led about 20,000 workers on an illegal strike that took place in May 2006. The court found that the strikes were illegal because they took place during the term of a collective agreement. The Finnish employers’ confederation has called for limits on the use of sympathy strikes and increasing the penalties for illegal strikes.

No Finnish law prohibits the use of strikebreakers; however, several statutes protect workers who refuse to work for a company in the midst of a strike. Unemployed Finns do not lose their unemployment benefits by turning down strikebreaking work. Also, civil servants can refuse to perform tasks assigned in the wake of a legal strike.

Aside from the peace obligation, another restriction on the right to strike is that a union must give 14 days notice of a planned “work stoppage” to a conciliator and the affected company. A union may be fined if it fails to do so. The union must state the cause of the strike, when it will start and the scope of the action. A conciliator may recommend to the Ministry of Labour that a strike be postponed for an additional 14 days if it would “affect essential functions of society” or harm the public interest. In the case of a proposed strike by civil servants, the Conciliation Office also may extend the prohibition on collective action for an additional seven days.

There are two significant exceptions to this notice rule. By its terms, the rule only includes strikes and lockouts. As a result, it does not apply to any other form of collective action. In addition, the notice requirement only applies if a strike is expected “in connection with a labour dispute.” Thus, it does not apply to disputes within the jurisdiction of the Labour court or sympathy or political strikes. However, a 1997 SAK national collective agreement recommends that a union must give four days notice prior to a sympathy or political strike.

Since 1970, civil servants (except for a limited number of high-ranking officials) have had the right to strike, but with greater limits than private sector workers. Only civil servants’ unions – not individual members – have the right to call a strike. The Council of Europe’s Committee of Social Rights has found that this formal requirement does not violate Art. 6 of the European Social Charter because of the complete freedom to form a union in Finland. Second, except for strikes and lockouts, no other form of collective action is allowed for existing employment relationships. Third, a legal strike must have a tangible connection to a collective agreement issue. The Finnish government has explained that ”strikes pursuing objectives other than those covered by a collective agreement” are prohibited.

The Council of Europe has raised a limited concern about the restriction of civil servants’ right to strike. SAK has argued for many years that the right of state and municipal civil servants to strike is unfairly limited to the extent they cannot strike in protest against Government social and economic policies. This restriction does not conform to the Article 6§4 of the European Social Charter because it prohibits strikes if the goal is not covered by the subject of a collective agreement. The Charter sets forth a broader view that strikes may be used to challenge any decision which can be subject of collective negotiation.

PROTECTION OF TRADE UNION MEMBERS

Both private and public sector workers are shielded from discrimination in employment (including a wide range of conduct such as hiring, firing, and promotion) based on their union activities. While workers may pursue civil and criminal remedies for discriminatory conduct, and there is a new anti-discrimination statute in Finland, legal experts have noted a paucity of case law and a corresponding lack of data about whether workers are pursuing legal remedies and the extent to which they are effective deterrent.

The Employment Contracts Act relies on the definition of discrimination, the prohibition on retaliation, and the burden of proof set forth in the 2004 Act on Non-discrimination (NDA). The definition of discrimination includes direct and indirect discrimination as well as harassment and any employer’s order to discriminate. Retaliation or “victimization” against workers for complaining about discrimination or taking action to “ensure equality” also is barred. (Victimization also may rise to the level of criminal conduct. The Penal Code provides for a fine and sentence of up to three years in prison for threatening workers who participate in the legal process. ) Also, the law provides that courts must apply a shifting burden of proof. If a claimant can establish a prima facie case of discrimination, then the defendant bears the burden of justifying its conduct. However, the shifting burden does not apply in criminal proceedings where guilt must be proved beyond a reasonable doubt.

In addition to the general prohibition against discrimination based on trade union status, trade union and employee representatives (including safety and health representatives) recently gained extra protection against discriminatory dismissal or a lay-off based on performing their duties. There are two exceptions. First, an employer only may dismiss a representative for engaging in severe misconduct and only after majority vote by the workers that he or she represents. Second, a representative may be dismissed if his or her job has been abolished due to financial circumstances or reorganization and the employer cannot either find alternative work or train the representative for other available work. However, the Act does not explicitly protect workers who are running for election as a representative or following their terms of office.

Workers also have a baseline Constitutional and statutory level of protection against unfair dismissal. Finland prohibits dismissal “from employment without a lawful reason.” Following that principle, the Employment Contracts Act state that a company may not fire a worker without a “proper and weighty” reason. Workers cannot be fired for taking part in a strike or collective action organized by a union or legal strike or for participation in “association” activities. Reinforcing the prohibition on victimization noted above, workers also may not be fired for resorting to “means of legal protection” available to them. Probationary employees, who ordinarily may be fired without cause, also are protected against discriminatory dismissal.

Procedurally, employers have a duty to warn and explain to a worker about a proposed dismissal “as early as possible.” If an employer wants to fire a worker a “reasonable” period after a warning, it must allow him or her an opportunity to be heard, consider possible job options, and supply a written notice of termination. Collective agreements often contain specific notice periods. Lacking an agreement, the statutory notice period ranges from 14 days to six months depending on length of service.

Workers may sue for wrongful dismissal and damages in a District Court and may appeal a loss to an Appellate Court or, by leave, to the Supreme Court. Unlike other European countries (e.g., Germany), Finnish unions have no independent right to sue on behalf of union members who have suffered discrimination or to represent them in court. However, a union lawyer may represent a worker with express authorization. One potentially costly risk for a worker in filing a civil case is that he or she may be liable for costs in the event of a loss.

A court can ignore or void a discriminatory contract term, and award damages. Employers are liable for any loss caused by discrimination. In termination cases, workers do not remain at work during the litigation and there is no mandatory reinstatement requirement. (By contrast, civil servants who receive a notice of dismissal may maintain their positions during the pendency of any litigation.) Instead, they may obtain compensation for a discriminatory dismissal that ranges from three to 24 months salary, depending on the application of a multi-factored test. Employee representatives may receive up to 30 months pay for a discriminatory dismissal.  By comparison, under the Non-discrimination Act, a worker may receive up to €15,000 in compensation (this sum is subject to legislative revision), or even higher in egregious cases, depending on the circumstances.   

Workers also may pursue criminal claims by filing a police report, which launches an investigation. Criminal penalties may be imposed on an employer for discriminatory conduct, absent an “important and justifiable reason.” A finding of discrimination in employment may result in a fine or up to six months in prison. As of 2001, a discriminatory dismissal or move to part-time work involving a shop steward or employee representative may result in a fine for the employer.

PROTECTION FOR FREEDOM OF ASSOCIATION RIGHTS

Finnish unions, along with government inspection and mediation agencies and the courts, play critical roles in protecting freedom of association rights. Union representatives provide daily assistance at the plant level. For example, SAK has 3,600 branches and about 90,000 union representatives, including 30,000 stewards and 30,000 health and safety representatives. Pursuant to collective agreement, grievances first are dealt with locally, then at successively higher levels within the union, and then, if necessary, in the courts.

Aside from relying on worker representatives, Finnish workers have several legal options to pursue individual employment contract claims, such as union-based discrimination and Employment Contracts Act violations. At the administrative level, the Occupational and Safety and Health authority has responsibility to enforce 60 labour laws and, in particular, non-discrimination laws. Workers may contact one of the agency’s 350 inspectors for help. While the agency has strong investigatory authority (e.g., to interview witnesses and obtain documents) it does not take cases to court nor does it represent workers. If there is a finding of probable cause of discriminatory conduct, cases are referred to a criminal prosecutor. By contrast, Finland’s new Omsbudsman for Minorities only deals with claims of ethnic (and not union-based or other types of claims) discrimination.

Workers also may pursue individual civil and criminal employment claims in District Courts. A voluntary conciliation process applies as of 2006. The number of termination cases is relatively small. District Courts decided about 550 cases per year involving dismissals during the period from 2003 to 2005.  Workers only filed about 30 discrimination cases per year during the same period. Given the relative lack of statistical data, the ILO asked Finland in 2007 to provide it with more detailed information about all types of discrimination cases filed.

In contrast to individual cases, disputes about collective agreements or industrial action are dealt with by the National Conciliators Office and the Labour Court. Neither conciliation nor arbitration is mandatory. If a dispute does arise, the parties must agree to fully participate in mediation, but the state cannot impose an agreement on the parties. As described above, notice procedures apply in case of a work stoppage. During the period 2000 to 2004, the office handled 95 conciliations.

If either a private or public sector collective labour dispute is not resolved via a grievance process or conciliation, it may be heard by Finland’s Labour Court. A trade union can represent its members before the Labour Court, but may be required to pay legal costs if it loses the case. The Court can fine an employer or union up to €23,500 (the present level) for a breach of an agreement or violation of the law. It cannot enforce any criminal penalties. Labour Court decisions are final, however a party may request leave for an extraordinary appeal to the Supreme Court. Members of the court include neutral professionals as well as union and employers’ representatives. The Labour Court decided about 150 cases per year from 2003 to 2005, the vast majority of which involve disputes about industrial actions and the terms of collective agreements. Cases are dealt with relatively speedily, in about 5-6 months, whereas civil termination cases lasted an average of 9 months as of 2005.

Analysis provided by Philip Simon, OSCE/ODIHR consultant.

Posted: May 2007

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