Finnish gov't approves agreement reached by labor organizations

The Finnish government has approved the agreement reached by the trade unions and employers in order to save labour cost and raise the competitive edge, Finnish national broadcaster Yle reported on Wednesday.

Finnish Prime Minister Juha Sipila met the labor market organizations on Wednesday. At a press conference after the meeting, he told reporters that the social contract is "a historic agreement".

"The government supports the outcome of the negotiations reached by the labor market organizations. The government's original package was put on the shelf," Sipila was quoted as saying.

He emphasized that the major objective of the government is to raise the country's employment rate to 72 percent.

The so-called social contract is a key part of the Finnish government's program, aiming to reduce production costs and improve the competitiveness of the Finnish companies. The government had envisaged a 5 per cent cut in production costs.

The Finnish employers and central unions of wage earners reached a draft agreement on Monday, following failures in four rounds of negotiations in 2015.

The solution aims at improving the competitiveness of enterprises by freezing salaries, increasing annual working time by 24 hours, cutting public sector's holiday pay by 30 percent, raising employees' pension contribution by 1.2 percent and so on. Endit