Developing the conciliation system

Labour disputes are mediated by the National Conciliator, part-time conciliators and conciliation boards. 

A conciliation board may be appointed for a specific mediation task. The National Conciliator or other conciliator handling a labour dispute submits a proposal to the Ministry of Economic Affairs and Employment on the appointment of a conciliation board, and the Ministry of Economic Affairs and Employment appoints the chairman and other members of the conciliation board.

Conciliation refers to a procedure for the mediation of a labour dispute under the direction of a conciliator.

A settlement proposal is the last resort for finding a solution in a conciliation procedure. The conciliator may submit a written settlement proposal to the parties to the labour dispute if the conciliator is unable to reach a resolution through negotiations or otherwise. The conciliator may set a short time limit during which the parties are encouraged to accept the settlement proposal. The issuance of a settlement proposal and its content are at the discretion of the conciliator.

No. The parties to the labour dispute will decide on whether to accept the settlement proposal submitted by the conciliator. If the parties to the dispute do not accept the settlement proposal, the mediator must then consider whether the conciliation will be resumed or suspended.

In its programme, the Government has outlined the development of the labour market negotiation system. The Government aims to strengthen Finland’s labour market model in order to improve long-term competitiveness and the capacity of the national economy.

The working group’s report proposes adding a general provision to the law, which will bring the principles already followed by the conciliator in the conciliation procedure to the level of the law. The conciliator would be obliged to act in their conciliation procedure in a manner that will safeguard the national economy and other public interest so that wage formation will work as well as possible and the functioning of the labour market will not be jeopardised. 

The conciliator would guide the parties to the labour dispute to balanced solutions in terms of Finland's competitiveness and well-functioning wage formation. The effectiveness of wage formation in the labour market would be promoted by considering pay adjustments and other cost impacts that are in line with the general level in the conciliation procedure. The conciliator should follow this principle at different stages of the conciliation procedure, including when the conciliator issues a settlement proposal.

At the time, no act or decree provides more detailed provisions on the duties of the conciliation board or the content of the settlement proposal submitted by it.

The working group's report proposes amendments to harmonise the work of conciliation boards. In the future, the National Conciliator or a conciliator appointed by the National Conciliator would act as the chair of the conciliation board. The Ministry of Economic Affairs and Employment would appoint the other members of the conciliation board at the proposal of the National Conciliator. 

In its proceedings, the conciliation board would be bound by the regulation obligating the conciliator, which would promote the functioning of the labour market. In addition, the provisions laid down in the Act on Mediation in Labour Disputes on the submission of a settlement proposal would also apply to the settlement proposal submitted by the conciliation board.  

The amendment would not constitute a practical change to the practice the conciliator currently follows. The practice of taking the general level of pay adjustments into consideration, as is already the case in conciliation today, would be further strengthened at the level of legislation. Conciliators have felt for decades that they have been bound by the general level of pay adjustments in the labour market in their conciliation procedure.  

However, the amendments would be particularly relevant to the activities of conciliation boards. The conciliation board complies with the established practices of the National Conciliator's Office or agrees on its practices when starting its work. However, conciliation boards have been appointed so rarely that no established practices have been formed for them. 

The general level of pay adjustments affects the level of wages and other provisions with cost impacts in different sectors and contract periods.

The working group's report proposes a model in which the definition of general level would not be enshrined in law. However, the statement of reasons of the Act would provide guidelines for determining when a general level could be considered to have been established.
Conciliation should take into account the general level when it is determined that one has been established. The establishment of a general level would be demonstrated by, for example, other sectors that have followed the cost impacts of an initiator sector in their solutions.  

In Finland’s export-driven economy, the cost level that safeguards the competitiveness of the national economy is formed in the export sectors. Therefore, it would be justified to consider the level of cost impacts based on collective agreements in the export sectors the general level.
The general level could only be based on national collective agreements. 

The conciliator should take the cost impact of the general level into consideration to the extent possible on the basis of the information available. There may not be information available on all individual provisions with cost impacts in contracts determining the general level. It is not the purpose of the amendments that the settlement proposal and the cost impacts of the general level, when taking into account all factors affecting them, correspond to one another exactly when computed. The conciliator will have room for manoeuvre to seek different resolutions, as long as these do not jeopardise the functioning of the labour market, the capacity and competitiveness of the national economy and the sustainability of public finances.

No. The amendment concerns the mediation activities of the conciliator and the conciliation board and the content of the conciliation proposal.

Finland is bound by international obligations concerning the freedom of professional association and the right to collective bargaining, for example. The international obligations binding Finland do not prevent the conciliator from considering issues of public interest, such as the functioning of wage formation and national economic aspects, when submitting a settlement proposal. 

The proposals would only affect the activities of the conciliator and the conciliation board. The proposal will not interfere with the autonomy of the social partners in deciding on negotiating objectives or with the right of the trade unions to promote the living and working conditions of their members. Nor will the proposal interfere with the right of the social partners to agree on wage levels and other terms of employment regardless of what the so-called general level is at the given time.

Professional segregation is substantial in Finland. Thus, in practice, changes in labour legislation always have gender impacts, even if regulation as such does not place women and men in a different position. 

The rise in wages in key export sectors will increase the pay of men more than that of women, as more men than women work in the export sectors. Adherence to the pay adjustment level of the export sector could, as such, mean that the gender pay gaps resulting from the uneven work of women and men in key export or other sectors would not change.

In addition to other factors, the conciliator will take into account the sector-specific and job-specific pay development needs. The proposal would leave the conciliator the necessary room for manoeuvre to find different solutions within the general level. The proposal will not limit the right of the social partners to agree among themselves on resolutions that exceed the general level. In Sweden, which is committed to the export-driven labour market model, the pay gap between women and men has narrowed and real wages have developed favourably. 

A consultation round on the Government Programme entries concerning the export-driven labour market model and the development of the conciliation system was organised from 8 November 2023 to 9 January 2024. A total of 70 statements were submitted.

The Ministry of Economic Affairs and Employment appointed a tripartite working group for the period 1 February–31 May 2024 to prepare the legislative amendments. The working group was chaired by Mika Nykänen, State Secretary of the Minister of Employment. In addition to the Ministry of Economic Affairs and Employment, the working group included representatives from the Confederation of Finnish Industries (EK), the Office for the Government as Employer, Local Government and County Employers KT, the Church Employer's Office, the Central Union of Finnish Trade Unions (SAK), the Finnish Confederation of Professionals (STTK), Akava - Confederation of Unions for Professional and Managerial Staff in Finland, and the joint representative of the employee confederations. The working group did not reach a unanimous decision during its work. The Confederation of Finnish Industries (EK), Local Government and County Employers KT, and the employee confederations SAK, Akava and STTK submitted a differing opinion on the report.

The Ministry of Economic Affairs and Employment organises a consultation round on the working group's report between 4 June and 30 July 2024.

Yes. As an alternative to legislative amendments, the Government has encouraged the social partners to engage in bilateral negotiations on the Finnish labour market model. The Government would like to see the social partners reach an agreement on the labour market model. The bilateral negotiations have not yet been launched.

A consultation round will be organised by the Ministry of Economic Affairs and Employment on the working group's report between 4 June and 30 July 2024. After this, official preparation will continue. The aim is for the Government proposal to be submitted in September 2024.

According to the working group's report, the proposed act and decree will enter into force on 1 December 2024.