The agreements between employer and employee organizations are called collective labour agreements (tes). The state, municipalities and parishes have employees in service and agreements concerning them are called collective bargaining agreements on civil servant salaries (ves).
A collective labour agreement can be a generally binding or a so-called normally applicable agreement.
Collective labour agreements and the general applicability play a big role in working life as protection for the employees’ minimum terms. They also curb income gaps. Collective agreements help the employer to comply with obligations in accordance with the Contracts of Employment Act, such as fair treatment of employees and the implementation of equality. There are some 160 generally binding collective labour agreements in Finland.
A collective labour agreement is generally binding, if the affiliated companies in the employer unions that signed the agreement cover more than half of the employees working in that sector. The generally applicability means that the collective agreement must also be complied with by companies that are not members in an employer union that signed the agreement.
According to the Contracts of Employment Act, the employer must comply with at least the provisions of the collective labour agreement (generally binding collective agreement). A committee for confirming the general applicability of collective agreements will confirm by its decision if the national collective labour agreement is generally binding.
A collective agreement is called normally binding if it is not generally applicable. If the collective agreement is not generally binding, it is only binding to the employers organized under the employer association in the sector in question.
The employer is obliged to comply with the normally binding collective agreement if it belongs to the employer union that has signed it or the agreement has been made to apply to the company in question.
A collective bargaining agreement for civil servant salaries is an agreement regarding the terms of employment for employees in the service of municipalities, the government or the church. Employees under the collective bargaining agreement for civil servant salaries have a limited right to strike etc.
The general applicability creates stability to the labour market and prevents distorted competition between companies, as companies cannot compete against each other by undermining employees’ terms of employment. The minimum terms also benefit the national economy since they increase productivity by weeding out weak companies and prevent wages and other terms from dropping below the minimum level.
The most important task of the trade unions is to negotiate on industry-wide collective labour agreements and collective bargaining agreements for civil servant salaries in each sector. The collective labour agreement is an agreement between trade unions and the employer or the employer union on the terms of work applicable to employees in a particular industry or company. A collective bargaining agreement for civil servant salaries is an agreement on the terms of employment for employees in service of municipalities, the government or the church.
Collective agreements, including agreements for civil servant salaries stipulate on e.g. the pay and pay rises in each sector. They can also agree on better terms than what the law provides. For example, as regards annual leaves and working hours, collective agreements could agree on better terms than what the law is.
The agreed pay and other terms are always minimum terms and the employer must not go below them. If your work contract has a provision weaker than the provision in the collective agreement, that provision is invalid. In that case you should contact your union.
A collective agreement is usually signed for a period of 1–3 years. During the contract period, industrial peace prevails, i.e. there must be no attempts to change the agreement by work stoppages or strikes. If the collective agreement period has ended and the negotiations on a new agreement make no progress, the trade union can decide on industrial action. Strikes and other forms of industrial action are aimed at promoting employees’ objectives when negotiating on a collective agreement.
A trade union is the best authority
Trade unions control compliance with agreements and help their members in conflict situations. Employees should therefore join the union that negotiated on the collective agreement that applies to their employment.
A trade union knows the terms of employment in the sector best and looks after the employees’ interests. Often employees’ work contracts mention the collective agreement applied to their employment. If the employees do not know what collective agreement is applied to in the workplace, they can ask the shop steward or superior in the company.