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JUHANI ARTTO
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The 25-month agreement between labour market confederations will raise wage and salary earners' purchasing power

Helsinki (14.10.2011 - Juhani Artto) For the first time in four years the labour market confederations agreed on Thursday to a centralized collective agreement. Economists belonging to the confederations expect the 25-month agreement to slightly improve the purchasing power of wage and salary earners.

The signatory parties are the union confederations Akava, SAK and STTK and the Confederation of Finnish Industries and the employer organs of the State, municipalities and the Lutheran church.

The agreement includes two pay rises (2.4 per cent and 1.9 per cent), a EUR 150 lump sum and several changes in working life regulations. In addition, the government has promised to make the agreement more attractive by tax cuts for both employees and companies together with a few other measures.

So now, the ultimate fate of the agreement rests with the unions and respective employer organizations. The agreement will not come into effect unless a substantial proportion of the national unions and their opposite numbers from the employer organizations can agree on sector based collective agreements, respecting the framework set up by the confederations. Rejecting this framework would mean losing out on tax cuts and other measures promised by the government as well as putting at risk the concessions made by the employers during the confederation level negotiations.

Presidents of the union confederations - SAK's Lauri Lyly, STTK's Mikko Mäenpää and Akava's Sture Fjäder – place much emphasis on two facets in particular, namely, the increase in purchasing power and the qualitative improvements of working life, that the agreement offers.

The signatory parties will sum up the results of the sector based negotiations on November 25. If the framework agreement is largely approved it will then come into effect leaving the onus on the government to do its duty and carry through with its promises to the labour market confederations.

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