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Neoliberal think tank issues complaint to EU Commission about Finland’s collective agreements

Helsinki (28.09.2018 - Heikki Jokinen) The neoliberal think tank Libera has filed a complaint against State of Finland to the EU Commission concerning the generally binding collective agreements in Finland. Libera claims these are an obstacle to a free market and competition.

The complaint says that the collective agreements of a generally binding nature do exceptional harm to the Finnish economy, are an obstacle to new jobs and weaken the possibilities of small companies to enter the market.
It also says that generally binding collective agreements can be used as a way of restricting competition.

Finnish labour legislation is discriminatory against foreign companies, Libera explains, as they must comply with Finnish collective agreements should they wish to expand their business into Finland. According to Liberia this goes against EU rules which grant companies the right to freely choose their domicile within the union.

For fair competition

Anu-Tuija Lehto, the Legal Advisor of the Central Organisation of Finnish Trade Unions SAK says that generally binding collective agreements are, contrary to what neoliberal Libera claims, useful and beneficial for companies.

Collective agreements make labour markets more predictable, she insists.

–When the minimum salary and other terms of employment are the same for all competitors, the employer knows exactly what name of the game is and dumping the terms of employment will not work as a trump card in competition.

Lehto is also at pains to point out that many of the generally binding collective agreements allow for the possibility of different or separate agreements at company level.

– Often those who complain about generally binding collective agreements for making agreement inflexible are looking to weaken the terms of employment.

The debate on generally binding collective agreements in not new in Finland. This long standing practise is opposed by certain employer associations and right wing politicians for the most part.

Those who seek to defend the Finnish way remind us that collective agreements are only settling the basics or bottom line for pay and that in many enterprises salaries are in fact higher than those set out in the collective agreements.

As Finland does not have a legally defined minimum salary, generally binding collective agreements fulfill this task, but are adapted sector wise according to the circumstances of the sector in question.

No artificial respiration

Katariina Murto, Director of the Finnish Confederation of Professionals STTK stresses the importance of the generally binding collective agreements in guaranteeing the minimum standards for employees regardless of whether their employer is organised in the employers’ association or not.

This creates stability in the labour market and prevents distorted competition between companies.

– There is no point giving artificial respiration to weak companies by watering down the terms of employment.

Libera is a dedicated right wing and neoliberal think tank established in 2011. According to information shared by the director of Libera director with the Demokraatti newspaper it is financed by donations from wealthy businessmen and the Björn Wahlroos Foundation.

Wahlroos, who is among the richest people in Finland, moved some years ago to Sweden in order to pay far less tax. He is now vice chairman of the Libera board.

Libera says on its webpage that it co-operates with, among others, the Cato Institute (USA) and the Adam Smith Institute (UK).