8 TRIPARTISM
Tripartism is the three-partner model upon which Finnish labour relations are based.
Labour and capital, with
their respective organisations, are at opposite ends of the triangle’s base line and the government is at the apex.
This is tripartism’s strategic triangle. This triangle forms the basis of negotiations between employers, employees
and the government on economic, social and financial goals in the labour market.
The outcome forms the
Incomes Policy Agreement, based upon which sectoral unions negotiate and conclude collective and legally
binding labour agreements, which may be adapted in specific workplaces to fit their needs.
The tripartism model was formed by the pressure of the Winter War in 1940, its rules being laid down in the
“January Engagement”, according to which, through active encouragement from the government (which acted as
a match-maker in the engagement), employers conceded the right of unionisation
and workers the right of
employers to manage and distribute work.
The first tripartite agreement was concluded in 1945. The Confederation of Finnish Employers (STK)
represented the employers, and the Confederation of Finnish Trade Unions (SAK) represented the workers. The
state acted as the agreement’s guarantor through price and wage regulation laws.
The first experiences of tripartism were encouraging, but the agreement did not manage to guarantee real
income development or peaceful labour relations during the years of post-war shortages. Despite its problems,
however, the participants and the state were convinced of the usefulness of tripartism, especially when bilateral
agreements in 1956
– 1977 yielded poor results because they lacked
grounding in the economic, labour and
social politics that are typical of tripartism.
1968 saw a return to tripartism in the midst of high unemployment with the first collective Incomes Policy
Agreement that comprehensively covered the entire society. Organisations representing
blue and white-collar
workers as well as academics, on the one hand, and employer organisations representing private and municipal
employers and the state on the other, all participated. In the 40 years that it has endured the agreement played a
large role in Finland’s development as a Nordic welfare state.
Demands regarding the flexibility of working life led to experimentation with a bipartite model between 2007
–
2011, but the results produced inflation and failed to suppor the ability to remain competitive on one hand and
the goals of reducing unemployment on the other. Heavy pressure from the government in 2012 saw a return to
tripartite negotiations and a two-year framework agreement was introduced: organisations that represent the
employers agreed on the level of expenses and unions on pay rises on the basis of this agreement.
Local
adaptations may be negotiated in specific workplaces. The Finnish model is a three-level tripartite solution.
The Finnish model of tripartism has been very successful, taking into account employers’ needs to improve
international competitiveness, workers’ needs for real income increases, and
government demands for low
unemployment and sustainable economic growth.
Tripartism has helped Finland rise to become one of the most competitive countries in the world, according to
a World Economic Forum study, and European Commission statistics show that Finland is the leading country in
IT innovations and applications. Education has also been developed successfully under the tripartite system, as
can be seen from the agreements on education in working life and the OECD’s PISA study, which puts Finnish
pupils at the top of the class in reading and arithmetic. Tripartism must also be thanked for developing labour
market and social policy legislation in particular and giving Finland a relatively equal income distribution and
being the force behind progress in realising equal opportunities to the extent that Finland has become one of the
world’s leading welfare states in which, according to an EU comparative study, people see themselves as being
happy.
Timo Kauppinen
– European Foundation for the Improvement of Living & Working Condition Research
Director 1999
–2008
