Ministry report: Virtually no changes in the coverage of collective agreements

Ministry of Economic Affairs and Employment 16.12.2019 9.20
Press release

A study published today as part of the Ministry’s publication series on the coverage of collective agreements between 2017 and 2018 indicates that two thirds of private sector employees in Finland work for employers belonging to employer organisations. Collective agreements cover 269,000 employees on the basis of general applicability. Altogether 89% of all employees are covered by collective agreements. This means the coverage of collective agreements in Finland has decreased only marginally from 2014.

The coverage of collective agreements refers to the ratio of those employed by organised employers to the total number of employees in the participating sector.  In Finland, this ratio is a key determinant in decisions on general applicability. If 50% or more employees work for organised employers, the applicable collective agreement is considered generally applicable to all employment relationships in the participating sector.

The coverage of collective agreements in the private sector totalled 65% (66% in 2014). In other words, this was the percentage of private sector employees working for organised employers in 2017, which equates to nearly 945,000 employees (922,000 in 2014). Another 269,000 employees were covered by collective agreements under general applicability

(306,000 in 2014), bringing the total number of private sector employees covered by collective agreements to almost 1,215,000 in 2017 (1,229,000 in 2014).

According to the employment statistics of Statistics Finland, the total number of private sector employees was approximately 1,449,000 in 2017. This means that 235,000 of them were not covered by universally binding collective agreements. Those covered by such agreements accounted for 84% of all private sector employees. In the public sector, collective agreements cover all employees. When both the public and the private sector employees are taken into account, 89% of all employees were covered by collective agreements in 2017. In 2014, this figure was 92%.

The core corpus of the study consisted of the decisions of the Board for Ratification of the Validity of Collective Agreements, which was set up in 2001, and the related statements of reasons. Quantitative data broken down by industry contained in Statistics Finland’s Structure of Earnings statistics were used for comparison. The statistical data are from 2017 and the study concerns agreements concluded in 2017/2018.

Collective agreements are an integral element of the Finnish labour market. They set the level of pay, working hours and other terms of employment. The agreements help keep economic activity predictable, which is important for successful business operations and for private households. The Ministry of Economic Affairs and Employment regularly produces data on the degree of organisation in the labour market from the perspective of employees and from the viewpoint of the coverage of agreements.

Inquiries:
Lasse Ahtiainen, Researcher, Tutkimuspalvelu Lasse Ahtiainen tel. +358 40 769  5020
Heikki Räisänen, Research Director, Ministry of Economic Affairs and Employment, tel. +358 29 504 7118