Collective agreement, also known by its Finnish acronym TES, is a labour market partner agreement on industry-specific working conditions such as pay rises, working hours, leaves, holiday bonuses, employee representation, communication and other applicable conditions in the scope of the agreement. Collective agreements are typically industry-specific and tied to the professional position of the salaried employee.

Why collective agreement is important?

Many key working conditions are agreed upon in collective agreements. Contrary to common belief, these conditions are not necessarily based on law.

As an example, the following working conditions are based on collective agreements:

  • Pay rises. Employer may raise or decide not to raise salaries at its discretion. Overall pay rises are not mandatory.
  • Sick leave pay. Employer has no responsibility to pay sick leave pay for any longer than the 1+9 working days as stipulated in the Employment Contracts Act.
  • Dispute settlement at workplace. Without collective agreement, no mandatory dispute settlement mechanism at workplace exists, with the exception of the provisions of the Act on Co-operation within Undertakings.
  • Holiday bonuses. The employer has no statutory obligation to pay holiday bonus or return-from-holiday bonus.
  • Paid family leaves. Collective agreements stipulate whether your family leave is paid or not.
  • Employee representation. Collective agreements specify the rights of the employee representative and often enable the selection of several representatives.
  • Dispute settlement in court. Disputes related to collective agreements are settled in the Labour Court. From the employee´s point of view, the procedure is simpler, faster and less expensive than in the District Court.

Private and public sector agreements

In the private sector, employers are most often represented by one of the member associations of EK, the Confederation of Finnish Industries, and employees by Akava’s private sector negotiating body YTN, the Federation of Professional and Managerial Staff. YTN negotiates private sector collective agreements for business school graduates.

In the public sector, specific public sector collective agreements apply. The contracting parties are JUKO, the Federation of Professional and Managerial Staff in the Public Sector, and the Local Authority Employers (KT), the Office for the Government as Employer (VTML) and the Labour Market Organisation of the Church (KIT). JUKO negotiates public sector collective agreements for business school graduates.

Collective agreements applicable to business school graduates

As a rule, collective agreements negotiated by YTN, the Federation of Professional and Managerial Staff, apply to the members of The Finnish Business School Graduates. Typical industries employing a large number of business school graduates and applying YTN-negotiated collective agreements include:

  • finance
  • technology industries
  • ITC services

Industries without collective agreements

A large number of business school graduates also work in industries with no YTN-negotiated collective agreement in force for the present. These industries include:

  • trade
  • audit and consulting services
  • food industries
  • insurance