Finland’s national “Pact for Employment and Growth”

Employers and trade unions reach consensus over moderate salary increases for the next two years.

Finland’s national trade union and employer confederations have agreed on a long-term unifying pact that seeks to restore a healthy trend of economic growth by increasing employment, equitably boosting the purchasing power and earnings of all employees, and enhancing the prospects of businesses in global competition.

Known as the “Pact for Employment and Growth”, the agreement covers over 90% of the employees in Finland. According to the pact, the monthly wages and salaries of all employees will rise by EUR 20 during the first year of the Pact, and by 0.4% in the second year.

Consensus for growth

The pact also seeks to make the economic operating environment more predictable, and to ensure that improved cost competitiveness and growth in employment are realised in an optimally equitable manner. According to Attorneys at law Borenius, the pact also commits the confederations to reach a settlement for pension reform, which includes a possibility to increase the retirement age, by autumn 2014. Negotiations regarding the pension reform are expected to start in the near future.

The ability of Finnish labour and employer confederations to achieve a national consensus is seen by many analysts as a significant factor in Finland’s economic competitiveness, and as one of the mainstays of the Finnish society’s unusual level of stability.

Sources: Confederation of Finnish Industries, The Central Organisation of Finnish Trade Unions SAK, Attorneys at law Borenius