Roundup: Finland's new plan to strengthen competitiveness questioned as against "Finnish way"

A governmental effort to strengthen the competitive edge of Finnish industries through binding legislation was received with dismay by the country's labor unions, who claimed such a move could damage the Finnish tradition of reaching consensus.

Late on Tuesday, the government announced a proposal which sees shortened holidays and reduced pay for employees in Finland.

From the end of 2016, the annual paid vacation may be maximally 30 working days instead of the current 38. No compensation is to be paid for the first day of sick leave, and the extra pay for Sunday work will be reduced from 100 percent to 75 percent per hour.

On the employer side, the cost of dismissing an employee will be increased, according to the plan.

Local commentators were surprised with the unusual practice to start the reform by legislation and not by talks between the workers and the employers themselves as usual.

Lauri Lyly, chairman of the largest national organisation of unions SAK, said that the government is scrapping "the Finnish tradition of agreement". Lyly questioned the legitimacy of the plans and he doubted that the freedom of agreement could be limited through legislation.

Political affairs writer for newspaper Helsingin Sanomat, Teemu Lukka said it would not be surprising if the decisions will trigger strikes. Lukka warned of serious internal polarization emerging in Finland.

Antti Palola, chairman of STTK representing mainly technical professionals, said the government measures were an attack against the "Finnish way".

He predicted enforcement by law will create trouble in the labor market and could increase unrest in the whole society as tension between various societal groups has already increased through unemployment and the immigration debate.

Jyri Hakamies, CEO of the Confederation of Industries, praised the government decisions although he found some increases in employer responsibilities unpleasant.

"Now the government has taken power into his hands," Hakamies said.

Prime Minister Juha Sipila said the parliamentary groups of the ruling parties had accepted the plans on Monday. The reform will be enforced when the current collective agreements between the employers and employees end.

The three-party coalition unveiled the measures following a failure to reach what the government had nicknamed a "social contract" in the labor market. The government had hoped the talks, if successful, would reduce the cost of Finnish production by 5 percent.

Antti Rinne, chairman of the opposition Social Democratic Party, said that government appears to be looking to implement the same measures as the ones it set out for the failed social contract talks.

"Now the government's targeted salary reductions are being implemented by force. Societal consensus has now been trashed in a very brutal way," Rinne was quoted by national broadcaster Yle as saying.

It has been a decades-old culture in Finland to maintain tripartite negotiations between the government, the employers and the employees. Hakamies admitted that the decision to enact binding legislation is unusual, but noted that labor market organizations "chose not to take the voluntary road". Endit