HELSINKI Finland's largest trade unions' central organization SAK conditionally approved a labor reform deal on Monday aimed at boosting export competitiveness in the recession-hit country, saying the government must sweeten the deal with tax reductions.
The deal, expected to yield 35,000 new jobs, now covers about 80 percent of Finnish employees and would mean that the country could avert a year of strikes and tough wage rounds.
The agreement follows a year of on-off negotiations and it is due to replace a tougher government plan to cut worker benefits that triggered strikes and protests last year.
"We have approved the deal... But we have conditions, we require the government to cancel additional spending cuts and carry out tax reductions," SAK chairman Lauri Lyly told reporters.
The agreement will lengthen annual working hours, lower holiday bonuses, freeze wages, lift pension contributions for workers and lower them for employers, and gradually shift away from centralized wage-setting toward export-sector-driven, more company-level labor deals.
The reform is part of the center-right government's campaign to cut spending by 10 billion euros ($11 billion) by 2030 with measures that also encompass health care and local government reforms.
High unit costs and rigid labor markets have been seen as a major obstacle for spurring growth in the country which has also been pressured by a decline in Nokia's former handset business, recession in neighboring Russia as well as a fast-ageing population.
The government and business representatives have approved the deal, although it is less ambitious than measures that Prime Minister Juha Sipila initially called for.
Sipila said last week that depending on how the proposed deal is implemented, the government will cancel additional cuts and may also implement income tax reductions of 1 billion euros. ($1 = 0.9127 euros)
(Reporting by Jussi Rosendahl and Tuomas Forsell; Editing by Dominic Evans)
