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1 (12)
INCOMES POLICY AGREEMENT FOR THE YEARS 2005 - 2007 The central organisations signing this agreement (hereinafter the signatory parties) have today found and agreed, that sectoral collective agreements for private and public sectors (hereinafter collective agreements) have been renewed according to the preliminary incomes policy agreement (hereinafter the preliminary agreement) reached 29 November 2004 between the signatory parties. Thus, the signatory parties ratify the preliminary agreement into the incomes policy agreement for the years 2005 - 2007. Helsinki, 16 December 2004
CONFEDERATION OF UNIONS FOR ACADEMIC PROFESSIONALS IN FINLAND (AKAVA) CONFEDERATION OF FINNISH INDUSTRIES (EK) COMMISSION FOR CHURCH EMPLOYERS (KiSV) COMMISSION FOR LOCAL AUTHORITY EMPLOYERS (KT) CENTRAL ORGANISATION OF FINNISH TRADE UNIONS (SAK) FINNISH CONFEDERATION OF SALARIED EMPLOYEES (STTK) STATE EMPLOYER’S OFFICE (VTML)
Translation
2 (12)
INCOMES POLICY AGREEMENT FOR THE YEARS 2005 -2007 1 OBJECTIVES
With a view to achieving a favourable economic and employment trend, the objective of this agreement is to strengthen companies’ competitiveness and a favourable development of wage-earners’ purchasing power.
2 DECISIONS ON COLLECTIVE AGREEMENTS FOR PRIVATE AND PUBLIC SECTORS 2.1 Agreement period and renewal of agreements Irrespective of the period of the collective agreements in force, they shall cease to be in force on 15 February 2005 and they shall be renewed with the changes mentioned hereinafter providing that the contracting parties enter into the collective agreements in accordance with this incomes policy negotiation result. The period of the new collective agreements is from 16 February 2005 to 30 September 2007. If it has been agreed that a previously concluded sectoral agreement will end later than 15 February in 2005, it will end when the corresponding period has elapsed after 30 September 2007. 2.2 Adjustments in wages and salaries THE YEAR 2005 2.2.1 General increase
Wages and salaries shall be increased from the beginning of the payment period starting on 1 March 2005 or the first payment period starting after this date, through a general increase of 18 cents per hour or 30.06 euros per month, however, at least 1.9 per cent.
2.2.2 Sectoral allowance
In addition to the general increase, wages and salaries will be increased from the date mentioned in section 2.2.1 through a sectoral allowance of 0.6 per cent. It is possible for the sectoral parties to agree that the sectoral allowance or part of it shall be transferred to the use of local parties at the level of company, bureau, municipality or place of business. The size of the amount to be transferred as a company level allowance shall be observed jointly by the local parties.
Translation
3 (12)
If agreed, the use of the sectoral allowance and the company level allowance can be postponed to a later date. Deferrals will not, however, increase the available amount of the allowance. If the sectoral or company level allowance is paid at a later date, it may be agreed that the postponement shall be compensated by a lump sum payment of the corresponding size. If no agreement on the use of the sectoral level allowance is made, the amount shall be paid as a percentage-based general increase. 2.2.3 Tariff wages and salaries As from 1 March 2005, the tariff wages and salaries included in the collective agreements in the private sector will be increased in each sector by a percentage or by an amount in cents or euros that corresponds to the general increase in the sector. The sectorspecific general increase will be determined in accordance with this incomes policy negotiation result unless the sectoral allowance is being used to raise the sector-specific general increase. The increase in tariff wages and salaries cannot lead to such rises in individual wages as would exceed the sector-specific general increase. Nevertheless exemption to this rule may be made if the sectoral allowance is used for renewing or maintaining a pay system based on collective agreement. In such cases the costs must be covered in full and the secotral parties must agree on the amount required for covering the costs. Section 2.2.2 of the agreement contains a provision enabling the sectoral parties to agree to transfer part of the sectoral allowance for covering the costs at the company level. In the public sector, minimum wages and salaries, basic wages and salaries and other tariff wages and salaries will be increased as from 1 March 2005 by an amount corresponding to the general increase. 2.2.4 Pay increments
Increments for shift work and other increments for work under special conditions will be increased as from 1 March 2005 by a percentage corresponding to the effect which the general increase has on wages and salaries in the specific sector. These increments shall nevertheless be increased only if they are not increased on the basis of their grounds for calculation. These increments will be rounded to the nearest cent.
THE YEAR 2006 2.2.5
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4 (12)
General increase
Wages and salaries shall be increased by a general increase of 1.4 per cent from the beginning of the payment period starting on 1 June 2006 or the first payment period starting after this date.
2.2.6 Sectoral allowance
In addition to the general increase, wages and salaries will be increased from the date mentioned in section 2.2.5 through a sectoral allowance of 0.4 per cent. It is possible for the sectoral parties to agree that the sectoral allowance or part of it shall be transferred to the use of local parties at the level of company, bureau, municipality or place of business. The size of the amount to be transferred as a company level allowance shall be observed jointly by the local parties. As part of the objective of promoting co-operation and bargaining at the local level in accordance with Section 3.2 of this agreement, the sectoral parties can negotiate and agree on sectoral procedures for the use of the company level allowance. If agreed, the use of sectoral allowance and company level allowance can be postponed to a later date. Deferrals will, however, not increase the available amount of the allowance. If the sectoral or company level allowance is paid at a later date, it may be agreed that the postponement shall be compensated by a lump sum payment of the corresponding size. If no agreement on the use of sectoral level allowance is made, the amount shall be paid as a percentage-based general increase.
2.2.7 Equality allowance
The sectoral parties shall use an equality allowance from the beginning of the salary payment period starting on 1 June 2006 or the first payment period starting after this date. The amount of the allowance in various sectors is defined as follows: The percentage proportion of women of all the employees within the collective agreement in question shall be multiplied by a coefficient of 0.45. Then the percentage proportion of employees within the collective agreement earning less than 10.67 euros per hour or less than 1,782 euros per month shall be multiplied by a coefficient 0.15. The results of these two calculations are added together. The signatory parties shall calculate the amount of the equality allowance for every sector on the basis of the statistical information from the fourth quarter of 2003, or a corresponding statistical period.
Translation
5 (12)
The equality allowance shall be used according to an agreement between the sectoral parties. If no such agreement is made, the allowance shall be paid as a general increase based on a percentage. The use, date of effect, and the methods concerning the allowance shall otherwise be governed by Section 2.2.6. When agreeing on the use of the equality allowance, the principles for determining the allowance must be observed. The purpose of the allowance is to raise the remuneration of women whose pay is not well consistent with the requirements of their work and with the education and training they have, and its purpose is also to bring remuneration into line in sectors that are relatively low-paid. 2.2.8 Tariff wages and salaries As from 1 June 2006, the tariff wages and salaries included in the collective agreements in the private sector will be increased in each sector by a percentage that corresponds to the general increase in the sector. The sector-specific general increase will be determined in accordance with this incomes policy negotiation result unless the sectoral allowance or equality allowance is being used to raise the sector-specific general increase. The increase in tariff wages and salaries cannot lead to such rises in individual salaries as would exceed the general increase agreed in the sector. Nevertheless, an exemption to this rule may be made if the sectoral or equality allowance is used for renewing or maintaining a pay system based on collective agreement. In such cases the costs must be covered in full and the sectoral parties must agree on the amount required for covering the costs. Section 2.2.6 of the agreement contains a provision enabling the sectoral parties to agree to transfer part of the sectoral allowance for covering the costs at the company level. In the public sector, minimum wages and salaries, basic wages and salaries and other tariff wages and salaries will be increased as from 1 June 2006 by an amount corresponding to the general increase. 2.2.9 Pay increments
Increments for shift work and other increments for work under special conditions will be increased as from 1 June 2006 by a percentage corresponding to the effect which the general increase has on wages in the specific sector. These increments shall nevertheless be increased only if they are not increased on the basis of their grounds for calculation. These increments will be rounded to the nearest cent.
2.3
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6 (12)
Sectoral clauses on pay increase and negotiation as well as sector-specific development projects and other special arrangements Instead of implementing negotiation clauses concerning general pay increases for the year 2005 and thereafter contained in previously concluded collective agreements, wage and salary increases shall be implemented according to this incomes policy agreement. Nevertheless, this incomes policy agreement shall not alter those clauses in previously concluded collective agreements that concern sector-specific pay rises or developing a pay systems, or other sector-specific special arrangements to be implemented in the year 2005 and thereafter. If a sectoral agreement for the year 2005 and thereafter contains dates for wage and salary increases different from the dates agreed in this incomes policy agreement, the previously agreed dates shall be applied, unless the sectoral parties agree otherwise. 2.4 Index clause
The signatory parties will meet in November-December 2005 to review the economic situation and price trend as well as related contributing factors. The Incomes Policy Information Commission shall assess the rise in the consumer price index (2000 = 100) from October 2004 to October 2005. The growth in the consumer price index shall be calculated on the basis of two-decimal index points. The increase in the index shall be rounded to a one-decimal percentage expressing the change. If, between October 2004 and October 2005, the consumer price index (2000=100) exceeds 2.6 per cent, wages and salaries shall be raised by an amount corresponding to the percentage exceeding 2.6 per cent in connection with the next general increase. However, if the increase of the consumer price is less than or equal to 0.4 per cent, the increase shall not be paid. If the rise in prices is due to special external causes, the central labour market organisations can agree on implementing the index clause in some other way.
2.5 Evaluation clause
The signatory parties shall meet in May 2006 to review the implementation of the goals set out in the agreement and to monitor increases in earnings. The period during which earnings shall be monitored is fourth quarter of 2004 to the fourth quarter of 2005 or a corresponding statistical period. If necessary, the research shall be conducted with the
Translation
7 (12)
help of the Incomes Policy Information Commission. The monitoring shall focus on how evenly the earnings of all employees and various sectors have developed during the agreement period, bearing in mind the objectives of this agreement. The extent of the monitoring work relating to various sectors shall be defined by the signatory parties. If there is no statistical material on wages and salaries, some other reliable information can be used. The signatory parties shall agree on the necessary measures. Should any of the signatory parties consider that in carrying out the monitoring process described above the end result stipulated by the agreement has not been reached in respect of one or more sectors, the party concerned can demand the issue to be referred to a Settlement Committee that is set up for this purpose. Each of the signatory parties shall name one person to the Settlement Committee for the duration of the agreement period. The National Conciliator shall act as the chairman of the committee. The National Conciliator decides on the representation of a sectoral organisation participating in this agreement without being a member of the signatory parties, based on a proposal by the organisation concerned. Participating in the monitoring process shall be the representatives of the dissenting organisations and the chairman. If a matter is put to a vote by the committee, the final decision shall be the majority opinion. If all the members differ in there opinions on the matter, the chairman shall have the casting vote. A decision of the Settlement Committee must be based on wage and salary statistics or some other reliable report. If a parties to a collective agreement are members of more than one of the signatory parties, the Settlement Committee shall be formed so as to include elected representatives from each of those signatory parties. In this way, the parties on both sides shall have an equal number of votes. Should the votes be evenly distributed between alternative solutions, the chairman of the Settlement Committee shall have the casting vote. The Committee's decision is binding with an effect of a collective agreement for represented on the committee and sectoral parties concerned. An appeal to refer the issue to the Settlement Committee must be made no later than 18 August 2006, and the Committee shall take its decision no later than 29 September 2006. The possible wage or salary increases on the basis of this clause shall be implemented in the manner decided by the sectoral parties. If the parties cannot agree how the increases should be implemented, the increases shall be paid, in connection with the next general increase, as an equal-sized percentage to all.
Translation
8 (12)
2.6 Travel allowances The tax-free travel allowances and the grounds for their determination for the years 2005, 2006 and for the part of 2007 covered by the agreement shall be determined according to the relevant decisions of the National Board of Taxes. If the travel allowances set by a collective agreement deviate from those decided by the National Board of Taxes, the agreement in question shall be revised as from 16 February 2005, as from 1 January 2006 and as from 1 January 2007 to correspond with the previous practice. 2.7 Cost-of-living classification of municipalities During the period of the agreement, the wage and salary clauses in the collective agreements are subject to the national cost-of-living classification of municipalities according to Government decree 11.12.2003/1055. 3 CONTINUOUS NEGOTIATION 3.1 Principle of the continuous negotiation system By following the system of continuous negotiation, the signatory and sectoral parties can flexibly launch joint projects for developing working life. The framework of working life can be enhanced through joint development projects and by highlighting best practices. The scope of the continuous negotiation system can also include matters that should be considered on a tripartite basis, such as pensions policy and unemployment security.
3.2 Sectoral measures for promoting local co-operation and bargaining The position and responsibility of the sectoral parties in assessing the changes in the operating environment have gained in importance in step with an increasingly international economy and competition. The development of collective agreements is a way of responding constructively to the change-induced challenges at workplaces. Sectoral agreement regulations guide companies’ operations and they also affect the staff’s position.
Translation
9 (12)
Local co-operation and bargaining mechanisms are key tools for managing change, and they serve to develop the activities of companies and workplaces, taking into account the needs of both companies and their employees. The increasing needs for promoting local co-operation and bargaining call for initiative and the will to spur development on the part of sectoral parties. A further requirement is that the parties have adequate preparedness and the latitude to undertake actions. The signatory parties stress that increasing local co-operation and bargaining calls for mutual trust and well-functioning, genuine interaction among employers, personnel and the representatives of personnel groups, whilst furthering well-being at work. The national globalisation project set in motion a dialogue in a number of sectors. The dialogue and measures in various sectors stand out in importance when seeking to develop employment, competitiveness and productivity. An effective sectoral dialogue contributes to and promotes these objectives. As part of the General Incomes Policy Agreement, the signatory parties are proposing to their member unions and federations that they develop sectoral collective agreements and agree on the necessary measures for promoting employment, productivity and wellfunctioning solutions at individual workplaces as well as good practices. The sectoral parties will launch the assessment and development of the possibilities and practices for local bargaining. In companies that are bound to collective agreements, local bargaining will be implemented and developed on a company-specific basis as provided for by the sectoral agreements and the labour legislation in force. Local co-operation and bargaining based on the equal position of the parties are necessary for managing change. The possibilities and skills for local bargaining nevertheless vary fairly widely. The sectoral parties will assess and explore the necessary measures for developing pay and reward systems and their effectiveness. The sectoral parties will continue to elaborate working time arrangements and to develop production and service times. The development work will take into account the statement drawn up by the central labour market organisations regarding good working time practices (14 March 2002) as well as the recommendation on the promotion of arrangements for working time accounts as set out in the annex on Developing Working Life. The dialogue process should be a part of normal co-operation in the workplace, thereby enabling new ways of working to be found and providing solutions to problems that may arise.
Translation
10 (12)
In addition, the parties can assess other areas that they deem necessary such as, for example, external services and subcontracting as well as the development of workplaces and the promotion of staff competence. In order to ensure jobs and the continuity of operations, the sectoral parties can also look into how fluctuations in the markets and demand can be forecast within co-operation at the workplace level as well as the means and possibilities that can be employed in managing change. The consideration of matters during the agreement period for sectoral parties (continuous negotiation) supports the ongoing development of collective agreements and the ability to adapt to changes. The fundamental premise is that by 28 February 2006 the sectoral parties will negotiate and agree on the necessary measures. The central organisations will prepare a survey of the measures to be undertaken in individual sectors, on the basis of which a joint evaluation seminar for signatory and sectoral parties will be arranged in spring 2006. 4 DEVELOPMENT OF WORKING LIFE The signatory parties have agreed on issues relating to the development of working life as specified in Annex 1. In the sectoral negotiations on the implementation of this agreement, the following sections of the Annex must be taken into account: - 1.6: implementation of an operational model for employment and coping with change - 3.3: prerequisites for the work of personnel representatives - 4.4: gender mainstreaming of collective agreements - 5: promotion of arrangements for working time accounts 5 STRENGTHENING AND DEVELOPING COMPETENCE The undersigned parties have agreed on matters connected with strengthening and developing competence in accordance with Annex 2. 6 SCOPE, VALIDITY AND ENTRY INTO FORCE The signatory parties call for their member organisations to renew their collective agreements in accordance with this preliminary
Translation
11 (12)
agreement, at the latest on 15 December 2004. The signatory parties shall make every effort to ensure that this preliminary agreement is implemented. Nevertheless, if the sectoral parties agree, they can agree upon such sector-specific issues as are not inconsistent with this agreement. By signing this preliminary agreement, the signatory parties shall urge all sectoral parties to start their sectoral negotiations in order to implement this agreement. The collective agreements shall contain the following clause: Unless the preliminary incomes policy agreement, signed on 29 November 2004, shall be ratified into the incomes policy agreement, this agreement shall become void. The sectoral parties must deliver a confirmation note in accordance with Annex 3, for any collective agreements concluded according to this preliminary agreement. The confirmation notes must be delivered to the sectoral parties´ central organisations and to the office of the National Conciliator no later than 15 December 2004 at 4 p.m. The signatory parties of the preliminary agreement shall ratify the incomes policy agreement immediately after the sectoral agreements have been made in the manner described above. The incomes policy agreement shall be signed between the parties on 15 December 2004, provided that all the signatory parties of the preliminary agreement have accepted the agreement. Helsinki, 29 November 2004 CONFEDERATION OF UNIONS FOR ACADEMIC PROFESSIONALS IN FINLAND (AKAVA)
CONFEDERATION OF FINNISH INDUSTRIES (EK)
COMMISSION FOR CHURCH EMPLOYERS (KiSV)
COMMISSION FOR LOCAL AUTHORITY EMPLOYERS (KT)
Translation
12 (12)
CENTRAL ORGANISATION OF FINNISH TRADE UNIONS (SAK)
FINNISH CONFEDERATION OF SALARIED EMPLOYEES (STTK)
STATE EMPLOYER'S OFFICE (VTML)
ANNEXES 1 2 3 Development of working life Strengthening and developing competence Confirmation note