The End of the Strike Wave? Amendments to Industrial Peace Legislation Enter into Force on 1 July 2024

Authors: Johanna Haltia-Tapio and Klaara Lähteenoja
(Read this blog in Finnish here)

Since last autumn, trade unions have organised several industrial actions against the Finnish Government's labour market policy and benefit cuts. There is no end in sight to the strikes in the spring – on the contrary, political strikes seem to be intensifying as the Central Organisation of Finnish Trade Unions (SAK) announced new strikes on 11 March with which Finnish ports will be closed for up to two weeks. It seems that there is no way to break the deadlock in the labour market situation yet, as Prime Minister Petteri Orpo's (National Coalition Party) Government does not seem to be flexible about its targets set out in the Government Programme in autumn 2023, despite strong criticism from trade unions. In addition to the reforms themselves, trade unions are opposed to the way in which the reforms have been pursued by the Government. The unions have demanded that the Government negotiate with them on all measures as a single entity that would enable a compromise to be reached, but the Government has not agreed to this (HS 6 March 2024).

Improving industrial peace is the Government's first major structural labour market reform that will proceed to the Parliament. Its purpose is to reduce labour market disruptions and reduce the costs of industrial actions to the Finnish economy. Finland has long been a leader in the strike statistics in the Nordic countries, and strikes in Finland have also been more active than elsewhere in Europe on average (ETUI), especially under right-wing governments. One explanation for this, apart from the fact that political strikes in Finland have not previously been limited in time, is the better economic situation in the other Nordic countries and a more functional labour market model, where the negotiation connection between the government and trade unions works smoothly. Another significant factor in itself is that nearly three out of four employees in Finland belong to a trade union, which is an exceptionally high number by global standards. However, the degree of unionisation is decreasing (Ministry of Economic Affairs and Employment 2021), affecting also the strong position of trade unions, if the Government does not agree to negotiations leading to a compromise under the pressure of strikes.

The Government is planning to increase compensation fines, limit sympathy strikes, and substantially limit the duration of political industrial actions

The Government submitted a proposal for amendments to the legislation on industrial peace to the Parliament on 29 February 2024 (Government Proposal HE TEM/2024/21). Firstly, the proposal proposes an increase in fines for violating industrial peace. Currently, a compensatory fine of up to EUR 37,400 can only be imposed on an association that is party to a collective agreement and an employer that is bound by the obligation to maintain industrial peace. The Government is now proposing an amendment whereby the upper limit of the compensation fine would be set at EUR 150,000 and the lower limit at EUR 10,000. In addition, the proposal provides for the possibility of imposing a compensatory fine of EUR 200 on an individual employee who continues an industrial action which the court has ruled to be unlawful despite being aware of the judgment.

Secondly, the Government proposes that sympathy strikes to support an industrial action by another group of employees be limited to those that do not have disproportionately harmful consequences on external parties under the obligation of industrial peace.

The third proposal concerns political industrial actions, which are currently not limited in time. The Government proposes that political work stoppages should in the future last no longer than 24 hours and other industrial actions should last no longer than two weeks.

In addition to these, it is proposed that the obligation to notify of an industrial action be extended to include sympathy strikes and political industrial actions. A sympathy strike or political industrial action in the form of a work stoppage should be notified of at least seven days before it starts.

In the case of sympathy strikes, the notification should be given to the employer affected by the industrial action and to the party of the collective agreement. In the case of political industrial actions, the notification should always be given to the party of the collective agreement.

Does the new industrial peace legislation have any loopholes?

This year has seen several multi-day strikes against the Government's labour market reforms. In the future, in addition to limiting the duration of political strikes, the new industrial peace legislation limits strikes quantitatively so that strikes can only be taken once for the same matter. According to Section 8b of the Government Proposal, a political industrial action may not be carried out if it is actually deemed to continue a previously organised political industrial action.

The Government Programme includes more than 20 labour market reforms. In public, questions have arisen as to whether a narrow definition of the target of the strike could be used to organise, for example, 20 separate political strikes lasting 24 hours if all the strikes target different areas of government reforms.

According to the reasoning of the Government Proposal, the intention is that the duration limit for political industrial actions could not be circumvented. However, under the reasoning, the new labour peace legislation enables the possibility that, for example, during a given government term, it would be generally permissible to organise a political strike aimed at influencing the Government's work and social policy in general. It would also be permissible to organise a political strike to influence a specific legislative initiative. However, the assessment of whether a new strike will actually continue a previously organised political industrial action will not be made solely on the basis of the reason stated for the industrial action, but the actual circumstances under which the political industrial action will take place must also be taken into account when assessing the similarity of the political industrial action. A political industrial action could therefore be repeated if, for example, it was directed at different government programmes or if the objective of the entry in the Government Programme and the way it has been implemented has changed so much during the preparation that they no longer correspond to the content of the entry in the Government Programme.

Since determining whether the subject matter of an industrial action is new or the same as in a previous strike has been left to case-by-case assessment, the draft proposal on the matter already received criticism last autumn from both employers and employees. The employer side wishes to prevent the apparent division of an industrial action into different parts in order to circumvent the maximum strike periods, while the employee side has demanded that the conditions for restricting fundamental rights be clearly defined and precise. The final demarcation seems to be left to the courts.

New industrial peace legislation has surprising effects together with other reforms affecting employees

According to the Ministry of Economic Affairs and Employment, the reform of industrial peace legislation will not restrict industrial actions aimed at better working conditions in one's own sector (Ministry of Economic Affairs and Employment 29 February 2024). This refers to so-called ordinary strikes when there is no collective agreement in force and the terms of employment are negotiated. Furthermore, in the Government Programme, there are other clauses pertaining to employees, clarifying that diverging from legal mandates via collective bargaining is no longer viable. This includes scenarios such as exempting small businesses from rehiring obligations and reducing lay-off notification periods. This creates a situation where employees cannot actually influence all the terms and conditions of employment by going on strike the same way as before.

The backlog of strikes shows no signs of abating as spring unfolds

The backlog of strikes is not yet expected to end even with the planned entry into force of the new industrial peace legislation on 1 July 2024. In addition to political disputes, more than 20 collective agreements signed by the Central Organisation of Finnish Trade Unions (SAK) alone will expire this spring, and many more will expire in the autumn. The conclusion of new collective agreements in an exceptionally inflamed labour market climate foretells not only political industrial actions against other reforms planned by the Government, but also strikes against the terms and conditions of employment in each sector, which, according to the Government's announcement, should not be interfered with in any restrictive way. In the absence of improved dialogue and a collective drive to achieve a compromise-driven resolution, the labour market climate is expected to stay volatile as we advance into spring, setting 2024 apart as a notable year for strikes in Finland.