Local negotiations and agreements are part of the negotiation activities related to the employment terms and supplement national collective agreements. Local agreements require that an employee representative, OAJ’s shop steward or JUKO’s shop steward, has been elected at the workplace.
Local agreements have been agreed in collective agreements, for example, in the main agreement in the public sector and as part of the collective agreement in the private sector. These regulations define who has the right to negotiate and agree locally, how and what is recorded about local agreements and any communication obligations of employer and employee organisations.
The collective agreements specify set matters that must be negotiated and agreed locally. These include local instalments included in salary increases during the agreement period. The employer must negotiate with the shop steward before making a decision on their allocation.
Local salary systems
In the public sector, the framework for the local salary systems is part of the collective agreements. However, local agreements must define how the employer applies the assessment systems for work performance and how demanding the job is. These assessment systems must therefore be negotiated locally prior to implementation.
What are the requirements for effective local agreements?
Employers’ unions often highlight the requirement to increase the use of local agreements during rounds of negotiations.
There are various employers in the private sector, from small workshops to large international companies. The range of educational institutions is also diverse. There are educational institutions ranging from music schools held by only a handful of teachers to specialised vocational educational institutions and multidisciplinary universities of applied sciences with several locations and hundreds of employees. Different educational institutions have highly varying levels of readiness for local negotiations.
Conditions for local agreements
At best, local solutions can be found that benefit both the employer and the employees.
Employers in the education sector have very different readiness to negotiate and agree locally. Consequently, knowledge of labour law and collective agreements also varies greatly. The largest employers have their own HR departments with HR managers and lawyers. For small employers, the principal handles both the day’s mail and teaching, is responsible for finances and acts as the supervisor of employees.
It is unreasonable to require the employer to develop a local collective agreement unless time, resources and the required training have been allocated.
At the central level, common principles according to which remuneration could be developed locally must be agreed. At present, such guiding principles are lacking in Finnish Education Employers’ private teaching sector, for example.
Local agreements require
- sufficient knowledge of the legislation and the collective agreement,
- understanding of what can be agreed and to what extent and
- time and resources.
When the negotiating group has more representatives from both the employer and employee sides, a more comprehensive view is obtained and the competence will be more diverse.
Employee representatives, i.e. shop stewards, must have a de facto opportunity to negotiate equally alongside the employer. The shop steward system must be strengthened so that it supports competence and balances the negotiation structure.
When an employer organisation requires a significant part of the salary increase reserve to be decided locally, this also means that the share of the general increase is reduced. In this case, the negotiators should be on the same line. If there is a common view of the distribution of local instalments and the development needs are worthwhile in the opinion of both the employer and the personnel, local agreements can serve all parties.
If, on the other hand, there is no common development perspective, the equality of the negotiation position requires that the agreed increase reserve is allocated to the entire personnel in the same way as the general increase. This forces the employer to genuinely seek a solution if they want to make use of local instalments.
Common framework towards fairer salary bases
Local agreements will be considerably easier if the collective agreement defines common principles for salary development. These are called the bases of the salary system. It is unrealistic to expect each employer to build their own pay system independently.
When a common framework for the entire agreement sector is agreed for the salary system, it is a move towards transparent and open remuneration. This can also increase performance and promote fairer salaries.
A functioning salary system is not dependent on increases in central-level agreements. A responsible employer rewards employees systematically and automatically when tasks become more demanding or their work performance is excellent. There is no need to wait for the next round of negotiations or its increase reserve.
If the employer does not exercise its employer powers and instead hides behind agreement increases, there is also no actual need to develop local agreements. There will also be no sense in speaking of the advantages of local agreements.
Employer-specific consideration in other provisions
Local application must also be negotiated with the employee representatives in the provisions of other collective agreements that include some kind of employer-specific consideration. These include, for example, the grounds for granting discretionary leaves of absence.
In addition, other procedures and instructions given to employees must be negotiated with the personnel representative in the spirit of cooperation. However, these will not become actual local agreements; they are the employer’s instructions, which the employer must inform the personnel of after the negotiations.
Local deviations from national agreements
A local agreement may deviate from the collective agreement applied at the workplace. In other words, local agreements can only be concluded on matters that are specified in the collective agreement.
Collective agreements have restrictions on what can be agreed locally. Local agreements cannot be used to deviate from
- working hours regulations,
- the length of the annual leave or
- regulations concerning sickness absences or family leaves.
The salary of an employee or civil servant cannot be agreed lower than what has been agreed nationwide as the minimum salary by way of a collective agreement.
Local questions of interpretation
If there is a local disagreement on the application of the provisions of a collective agreement, the shop steward shall first seek to find a common view with the employer on the interpretation of the provision.