Observation (CEACR) - adopted 1993, published 80th ILC session (1993)

Employment Policy Convention, 1964 (No. 122) - Finland (Ratification: 1968)

1. The Committee took note of the Government's report and of the comments of the Central Organization of Finnish Trade Unions (SAK), the Finnish Employers' Confederation (STK), the Employers' Confederation of Service Industries (LTK) and the Local Authority Employers' Commission (KT) which were included. It also notes the texts of the legislation amending the 1987 Employment Act which was supplied by the Government.

2. The information contained in the Government's report reveal a rapid and worrying decline in the employment situation. The deep recession in economic activity - characterized by a 6.5 per cent drop in production in 1991 - led to a 6.2 per cent decline in total employment in 1991. The unemployment rate, which rose from 3.5 per cent in 1990 to 7.6 per cent in 1991, reached 12 per cent in 1992. The drop in employment was particularly marked in industry, construction and commerce, and there was a sharp increase in unemployment among young people and long-term unemployment.

3. The Government indicates that its labour market policy, which is an essential component of its employment policy, is still based on the provisions of the Employment Act of 13 March 1987 (Legislative Series 1987-Fin. 1) which organizes the placement of unemployed workers and, where appropriate, requires the State and the municipalities to provide temporary employment for unemployed youth and the long-term unemployed. Implementation of this requirement, however, has not curbed the increase in long-term unemployment which affected 26,000 persons in 1992 - as opposed to 3,000 in 1990 - nor the increase in unemployment among persons under the age of 25, for whom the estimated unemployment rate in 1992 was 23 per cent. Furthermore, in view of the difficulties of applying the Act at a time of recession and high and rising unemployment, and in view of the objective of lower public expenditure, the obligations on public administrations and services have been considerably reduced. Thus, for example, municipalities are no longer required to provide full-time temporary employment, but only part-time temporary employment. The Committee notes in this connection that, according to the KT, the municipalities are having to reduce their own permanent staff and are experiencing great difficulties in finding enough jobs that match the skills of the unemployed and are likely to improve their chances of employment in the open labour market.

4. The Committee notes with interest the information concerning the measures taken to improve the efficiency of the employment services, and measures in the area of the development of human resources, particularly the promotion of training for the labour market in cooperation with enterprises, which was a measure designed and implemented as an alternative to lay-offs. The Committee asks the Government to refer in this connection to its comments under Convention No. 88, of which it examined the first report this year, and Convention No. 142.

5. In its comments on the Government's report, the SAK considers that the funds allocated to training for the labour market are inadequate. Although public expenditure on unemployment rose from 2 to 4 per cent of GDP during the period under consideration, saving measures mainly affected the programmes for the long-term unemployed. According to this organization, fiscal issues related to the equilibrium of the budget economy have been given more attention than the long-term targets of labour market policy. The OECD confirms in its study published in August 1992 that the relative share of resources devoted to active labour market measures has decreased.

6. It emerges from the information available to the Committee that labour market policy measures have not been able to contain growing unemployment, particularly youth and long-term unemployment. Moreover, full application of the provisions of the 1987 Act has been impaired by the requirements of a balanced budget, and the amendments to them have had the effect of limiting the financial commitment of the public authorities, which is likely to make the measures envisaged less effective. Should this prove to be so, the objective of "ensuring full employment", established in the 1987 Act, is likely to be put in jeopardy or postponed. The Committee would appreciate any information which the Government might be prepared to provide on any substantive debates that have taken place, particularly when the various amendments were made to the Act, on the question of full employment both as an objective and as a means of ensuring the right to work laid down in the Constitution.

7. If the foregoing evaluation of the employment situation is accurate, then the Committee suggests that it would be advisable to review in depth both the instruments of employment policy and, more generally, the "relationships between employment objectives and other economic and social objectives" (Article 1, paragraph 3, of the Convention). The Committee wishes to recall in this connection that under Article 2 States parties to the Convention must decide and keep under review, within the framework of a coordinated economic and social policy, the measures to be adopted for attaining the objectives of employment. It trusts that in its next report the Government will provide detailed information on the manner in which its choice of economic policy contributes to the promotion of full, productive and freely chosen employment, stating, in particular, how the measures adopted in the areas of budgetary, taxation and monetary policies, industrial and trade policies, and prices, incomes and wages policies contribute to attaining this essential objective. The Committee notes that section 5 of the Act of 1987, as recently amended, no longer requires the Council of Ministers to establish annually a list of short-term employment policy objectives, and asks the Government to indicate the procedures by which the commitment of the various ministerial departments and the coordination of their actions are now ensured in this area.

8. Lastly, the Committee notes the joint communication from the STK and the LTK concerning the representation of employers' organizations in the tripartite bodies set up in connection with the Ministry of Labour. The Committee also refers to its pending comments on Conventions Nos. 88 and 142, and would be grateful if the Government would indicate the procedures for the appointment of representatives of employers, workers or other persons affected who participate in consultations on employment policy and cooperate in its implementation, in accordance with the provisions of Article 3, to which the Committee pays a particular attention.