Saturday guests | Elina Pylkkänen and Martti Hetemäki failed to resolve the nurses’ labor dispute in the spring, but now they have a new proposal

Life With a stick and Martti in Hetemäki is a new proposal to resolve the protracted labor dispute among nurses.

In the spring, the two headed the mediation board, which came into being with the settlement proposal given by the municipal sector three-year contracts. The nursing unions Tehy and Super were left out of the solution because they want a salary program that is larger than other sectors. They have said that they are preparing mass layoffs.

Pylkkänen, who works as undersecretary of the Ministry of Labor and Economic Affairs, and Hetemäki, former state secretary of the Ministry of Finance, are no longer in an official position to resolve the dispute. The activities of the Conciliation Board have ended, and no new actual settlement proposal is being made. They still want to share their thoughts on how the parties could move on from the stalemate.

The duo think that the nurses’ unions and the Municipal and Welfare Area Employers (KT) should try to agree on reforming the sector’s salary system. The money for the reform would come from the wage program and the harmonization of wages, i.e. the so-called wage harmonization, which in any case is ahead in the new welfare areas.

“Salary harmonization creates potential for salary payment reserves. It makes it possible to allocate higher wages to professions with a labor shortage,” says Pylkkänen in the premises of the Ministry of Labor and Economic Affairs.

“The harmonization pot is big. It’s more than the cost effect of the wage structure program,” adds Hetemäki.

With wage harmonization means that the salary levels of nurses and other employees performing the same tasks in the welfare areas starting next year will be harmonized over a few years. In practice, other lower wages are increased towards the highest wages, so the average wage level rises.

KT considers the most likely calculation according to which harmonization will increase annual labor costs by 5.8 percent. With his analogy, Hetemäki refers to the fact that the salary program coming to the municipal sector will raise the average salary level by 5.1 percent in five years. In his and Pylkkänen’s opinion, the nurses’ demand for a salary program much larger than this could be achieved with a comprehensive reform of the salary system, which would use the money for both the salary program and harmonization.

“The goal would be a model that encourages productivity and competence. The salary system must be created in such a way that the social security sector has the opportunity to achieve a better salary development through its own efforts”, says Pylkkänen.

Do it and Super have considered that the salary harmonization required by law does not belong at all on the salary negotiation table. According to Pylkkänen and Hetemäki, it should be included. They say that they have recently asked legal experts whether the social partners can influence the way harmonization is implemented.

“According to our understanding, there is no obstacle to employers’ and employees’ organizations instructing regions to implement good wage harmonization. It is necessary for the parties to take the need for harmonization into account in the collective agreement and in the salary reform,” says Hetemäki.

According to him, the attractiveness of the care sector is not only about basic salaries: the problem is that there is no salary development at all, and many employees have to work at a salary according to their original position throughout their working career.

Pylkkänen continues by listing what reforming the salary system would mean. The purpose would not be to automatically raise everyone’s wages, but to strive to reward employees in a more encouraging way than at present.

“Let’s go through the task titles, possibly create new ones. Work experience, competence, responsibility and achievements are taken into account more than at present in hiring. Let’s expand the salary spread both between job titles and within them.”

Hetemäki says that reforming the salary can also help with the management problems of the social security sector.

“Now when workplaces discuss management and well-being at work, salaries are not included in the discussion. If an employee’s annual performance discussion in any field has no connection to salary, it is easily perceived as fake. When the salaries come in the mail, developing well-being and competence at work doesn’t seem so important.”

Pylkkäsen and Hetemäki’s proposal is an informal discussion opening, but they hope the parties will consider it seriously. They say that they thought about using the harmonization money to reform the salary system already in the spring, but in the midst of fierce negotiations, they could not throw ideas around as freely.

The key question is whether nursing unions would settle for the same salary program as other sectors only with the help of salary harmonization money. Tehy and Super have known all along that wages will rise anyway thanks to harmonization. They have therefore not wanted to confuse harmonization with wage negotiations.

According to Hetemäki and Pylkkänen, the key is that the parties agree on the implementation of wage harmonization and can thus rapidly increase wage costs.

“Even if the price of salary harmonization would increase from current estimates, in the long term, the reform of the salary system would lead to improved productivity, curb the increase in costs and support the attractiveness and retention of the industry. In this case, the state also benefits from the use of additional money”, Pylkkänen estimates.

Hetemäki in my opinion, the state’s voice should now be heard at the negotiating table. At the turn of the year, salaries in the Social Security sector will practically be paid entirely by the state, because the welfare regions that start at the turn of the year receive almost all of their funding from the state.

If the parties do not come to an agreement on reforming the salary system and the principles of harmonization, the two fear that the employer side will engage in “short-sighted optimization”. In that case, the employer would allocate local wage increases in the coming years to those employees whose wages would otherwise be increased by harmonization. In this case, the price tag of harmonization for the employer would be reduced.

According to Hetemäki and Pylkkänen, reforming the salary system would be in the interest of both parties. However, they say they understand that the employee side is likely to want some kind of upfront commitment on the amount of money to be used to improve the salary level.

“In order for an agreement to be made, it is probably necessary to lock in a number. You could think like that”, says Hetemäki.

Do it and Super barked at the proposal given by the conciliation board in the spring “absolutely unclassably bad“. However, other municipal organizations accepted it. After this, the labor market partners on the private side criticized the agreement, but for completely different reasons than the nursing unions.

According to critics, it is a big mistake to tie salary increases in the municipal sector to salary solutions in export sectors. In the coming years, employees in the municipal sector will automatically receive higher contract increases than employees in private export sectors.

Two weeks ago, the conciliation board’s model barked into a crack in the ground In an interview with Helsingin Sanomat SDP Member of Parliament, former Prime Minister and current Deputy Speaker of the Parliament Antti Rinne. Rinne called the solution “exceptionally unsuccessful” and “dangerous”.

Read more: Antti Rinne digs into the gap in the wage settlement in the municipal sector – presents his model to bring sanity back to collective bargaining

“The solution created a trap for the salary development in the private sector. It easily leads to salary competition and shorter and restless negotiation rounds. Unions may now start applying for higher raises than each other just because one sector was given an automatic, where they always get higher pay raises than the others,” said Rinne.

Pylkkäsen and Hetemäki thinks the review is unwarranted.

Pylkkänen, who chaired the committee, says that their task was to seek a solution that both the employee and employer sides would accept. According to him, in order to achieve long-term labor peace, it was necessary to tie wage increases to the general development of wages and not to agree on the increase percentages in advance. For example, no one knows how much prices will rise in the next few years.

“It wasn’t realistic that the municipal sector would commit blindfolded to a wage settlement for three years without knowing what kind of wage increases were agreed on, for example, in industry.”

In Pylkkänen’s opinion, too little attention has also been paid to the fact that the entire wage program pot of the municipal sector and 30 percent of contract increases are distributed to employees locally. If the parties cannot reach an agreement, the employer decides on the allocation of salary increases.

Hetemäki, who is known to be calm and stone-faced, has a touch of frustration in his tone of voice when he responds to the criticism directed at the activities of the mediation board.

“This is exactly what has long been hoped for, that salary increases in the public sector be tied to open sector solutions. When this long-awaited coordination comes, suddenly it is terribly harmful or even destructive. Now it is in the hands of the open sector how the salary solutions will be, whether there will be a salary cycle and so on. It seems that this was not only put out incorrectly, but the fire department was wrong.”

Review seems to have focused above all on the fact that the wage program in the municipal sector guarantees higher contract increases than in the private sector. According to Hetemäki, however, the matter has been looked at unnecessarily one-sidedly, because in industry the so-called salary slippages are typically clearly larger than in the municipal sector. Sliding refers to the part of earnings development that exceeds the contractual increase.

In the industry, the average slips have been about one percent per year for employees who have continued in the same positions over the past ten years. In the coming years, the number may be higher due to the accelerated rise in prices.

According to Hetemäki, the purpose of the salary program, which brings additional increases of about one percent per year, is to prevent salaries in the municipal sector from falling behind, in addition to reforming salaries.

“No one has publicly said that they would like the municipal sector to fall behind in wages. We already have, for example, in the care sector difficult situation, because there is a shortage of workers. If salary development still lags behind other sectors, the problem would probably get worse,” says Hetemäki.