Labour market glossary

Labour market and trade union vocabulary is closely connected with contractual and financial themes. Particularly this autumn, there has been talk of changes in the world of labour using diverse words. Here you can find the key terms for keeping up with the discussion.

A trade union or trade organisation aims to defend and develop the terms of employment of employees, i.e. its members. A trade union is a nationwide association that can have several subassociations. Trade unions are an integral part of trade organisation activities. In Finland, trade unions can be members of a confederation. Employees’ confederations include the Central Organisation of Finnish Trade Unions – SAK, Finnish Confederation of Professionals STTK and highly educated employees’ Akava. Employers have their own confederations, with the Confederation of Finnish Industries (EK) as their umbrella organisation.

is comprised of the basic component, the earnings-related component and any child increases. Under certain conditions, an unemployed jobseeker can also claim increased earnings-related allowance.
is a trade union’s work for the benefit of its member in matters related to employment. For example, trade unions negotiate and conclude collective labour agreements.
Representatives of employees include shop stewards, occupational safety delegates, labour protection ombudsmen, EWC (European Works Council) representatives, board representatives, employees’ representatives in joint committees and other representatives elected by the employees and their deputies.
Negotiation between employees and employers.
The employee organisations (SAK, STTK and Akava), employer organisations and the Finnish government negotiate with each other.
A pay increase agreed for industries, occupational groups or employees that is higher than that of others, such as low-pay bonuses.
A strike is one of the means of industrial action. Usually, a strike is declared to improve the terms of employment. It can also be used as a way of putting political pressure on decision-makers. A strike or a sympathy strike must be announced two weeks before its commencement. A strike is considered legal when there is no valid collective agreement. A trade union can be ordered to pay a fine for an illegal strike.
It is possible to agree on a sectoral allowance in addition to an across-the-board increase. The parties to collective bargaining, i.e. the employees and employers, can also decide on the sectoral allowance to be paid as a wage item agreed upon locally.
Negotiations between the employer and employee organisations, e.g. when no collective settlement is reached. Often refers to pay negotiations.
A shop steward is a representative elected by the employees from among their number whose task it is to supervise compliance with the collective agreement and act as the supervisor of the employees’ interests. In accordance with the collective agreement of the IT service sector, a shop steward must be a member of the Association of IT sector employees or a member of a union belonging to the Federation of Professional and Managerial Staff. Only members of corresponding trade unions may take part in electing the shop steward.
An an elected representative is elected when the employees have no shop steward referred to in a collective agreement. Also employees who are not members of a trade union can take part in electing an elected representative.
Separate allowance allocated to sectors with low wages
The purpose of change security is to help a dismissed, laid-off or unemployed person to find new employment faster and easier. Change security requires cooperation between the employer and the TE Office, and it includes services for both the employees and the employer.
A separate allowance set aside exclusively for sectors with a high proportion of female employees as part of pay settlement.
The employer’s and employees’ representatives agreeing at the workplace on matters which fall outside the scope of legislation or the collective agreement and provide the employee with better terms of employment. It is possible to agree on working hours (flexible working hours), remote work, pay level or exchange of holiday bonus to days off locally, among other things.
A dismissal package or severance package is an agreement in which an employee agrees on their dismissal themselves. Employers usually offer such packages as an alternative to possible dismissals following cooperation negotiations. When accepting a dismissal or severance package, one should observe its diverse effects on unemployment security, for example.
In Finland, a wage earner is guaranteed wage and other employment-related income by law if the employer runs out of funds. Applications for wage security are made to the TE Office.
A binding clause on how the pay increases specified in the collective agreement will be implemented if an agreement cannot be reached locally.
Abbreviation used collectively for the Employees’ confederations (SAK, STTK, Akava).
A centralised labour agreement on the amount of pay increase by way of collective agreement and by sector. The framework agreement usually only concerns the pay agreement.
A collective agreement on pay, working hours and holidays, etc. The collective agreement for municipal employees is called KVTES and the one for government employees is called VES. A generally binding collective agreement is applied to all parties in the same participating sector, including employees who are not members of a trade union. A normally binding collective agreement is binding on the parties that have signed the agreement. A normally binding collective agreement must be followed also when an employee is not a member of a union that has signed the agreement.
Comprehensive incomes policy settlement. A labour agreement negotiated by the labour market organisations in which the government takes part by way of tax decisions, for example. The agreement is implemented by way of sectoral collective agreements.
Supervision of interests by trade unions and trade organisations related to the labour market.
Work stoppage is a form of industrial action. It can be due to disputes within a company. In this case, the employees stop working for a specific time without an advance notification by the employee association to the employer association.
An occupational health and safety committee is elected for workplaces with a minimum of 20 employees. The committee promotes safety and healthiness at the workplace and supports coping at work.
Every workplace must have an occupational health and safety manager who represents the employer.
The employees’ representative in matters related to occupational health and safety. The delegate takes part in preparation and decision-making in matters related to occupational health and safety with the employer. The occupational health and safety delegate pays attention to the safety of employees and development of a healthy working environment. Every company employing more than 10 pOccupational health and safety committeeeople must have an occupational health and safety delegate and two deputy delegates.
Both employers and employees can take industrial action. The employer can declare a lockout, preventing employees from working at the workplace. Employees’ industrial action methods are strike, sympathy strike and work stoppage. Lockouts, as well as strikes, must be announced to the counterparty and the National Conciliator in advance.
When joining a trade union, it is common to also join a sector-specific unemployment fund. Unemployed employees can be entitled to earnings-adjusted unemployment allowance paid by the unemployment fund. Those who are not members of a fund are paid basic unemployment allowance by the Social Insurance Institution of Finland (Kela).
Unemployment funds also pay job alternation compensation and training subsidies.
If the parties to industrial action (i.e. lockout or strike) cannot reach an agreement by way of mutual negotiations, they can turn to the National Conciliator. The National Conciliator is a neutral public servant who seeks to have the parties reach an agreement.
If disputes on the interpretation of a collective agreement emerge during the term of the agreement, the dispute can be brought before the Labour Court. The Labour Court can order a local branch of a trade union, staff association, trade union or employer association to pay fines for an illegal strike or lockout, for example.
A pay increase paid equally to all wage-earners.