Traditionally the State takes on a somewhat discreet role during collective negotiations facilitating the conclusion of agreements by proposing changes in legislation so as to implement agreements or by subsidizing certain measures. Prime Minister Juha Sipilä’s government, a center-right, right, extreme-right anti-immigration anti-European coalition has just deviated from this line in presenting on May 29 a government program listing a range of sanctions to apply if the social partners do not conclude a ‘social agreement’ that cuts unit labor costs, introduces more flexibility into employment contracts, and improves unemployment conditions via training provisions to speed up the return to employment. The social partners have until 21 August to come to agreement.
At the time of his election Sipilä had put forward this social contract but the social partners hadn’t been able to agree and indeed both the employee representatives thought the price they had to pay was too high whilst the business leaders also rejected several topics including pay ceilings for management.
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