In the future, negotiations on wages and labor conditions will be left up to individual companies and their employees.

A forest by the lake in Lapland. Photograph: Ilkka Jukarainen/Flickr

Last week, the Finnish Forest Industries Federation (FFIF) announced that it would no longer participate in the collective bargaining system, instead opting to leave negotiations about wages and labor conditions up to individual companies and their employees.

The move came as a surprise to many, including legislators. Collective bargaining has been a staple of the Finnish labor market for decades and is meant to be a means to secure good working conditions and decent wages for employees across industries.

This is achieved because national unions negotiate with employers on behalf of workers to determine standards that then apply to the whole industry nation-wide, rather than each single company.

Ilkka Hämälä, board chair of FFIF and CEO of Metsä Group, explained that the new system will be better tailored to meet the needs of individual businesses and will enable the forest industry in Finland to continue thriving.

“The different needs of companies in different situations can be better met when employment terms and conditions are decided upon at the company and product group level,” he pointed out.

Collective bargaining, in the view of FFIF, does not allow for this flexibility in an industry that comprises over 150 factories and employs around 140,000 people.