Observation (CEACR) - adopted 1996, published 85th ILC session (1997)

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

1. The Committee notes the Government's detailed report and the observations made by the Confederation of Finnish Industry and Employers (TT), the Employers' Confederation of Service Industries (LTK), the Central Organization of Finnish Trade Unions (SAK), the Confederation of Unions of Academic Professionals in Finland (AKAVA) and the Finnish Confederation of Salaried Employees (STTK).

2. The Committee notes that the recovery in the growth rate resulted in an unemployment rate of 17.2 per cent in 1995, but that the fall in unemployment has slowed down since then. The STTK emphasizes that the economic recovery has only had a slight impact on the labour market, which remains affected by mass unemployment. The AKAVA draws attention to the rise in unemployment among graduates and the more general trend towards atypical forms of employment, including fixed-term employment in the public service. One serious aspect of the employment situation noted by the Committee is the growth in the proportion of long-term unemployment, which now accounts for over 30 per cent of all unemployment.

3. When it adopted its employment programme in 1995, the Government set the objective of reducing unemployment by half by 1999. In its report, it describes the principal components of its strategy to promote economic growth and employment, which consist of maintaining a low level of inflation by containing labour costs, reducing the public debt, lowering interest rates to encourage investment and consumption, decreasing taxes on labour, promoting entrepreneurship and the creation of small and medium-sized enterprises, strengthening education and training and seeking greater flexibility in the labour market, particularly as regards hours of work. The Committee notes that the organizations of employers and workers express contrasting opinions with regard to this strategy. In their common observations, the TT and the LTK consider that the Government is on the right track, but that the growth in production will not be sufficient to create new jobs rapidly. They consider that the programme does not place sufficient emphasis on flexibility and the reduction of the indirect costs of labour, which would require much more radical measures. However, the SAK is of the opinion that the Government's excessively restrictive monetary policy will prevent it achieving the objective of reducing unemployment.

4. The Government states that the projections for the convergence programme designed to fulfil the conditions required for European monetary union foresee an unemployment rate of 12.5 per cent in 1999, and that only a higher growth rate would make it possible to achieve the objective of the employment programme. The Committee notes that the Government's medium-term employment objectives are far from that of full employment within the meaning of Article 1 of the Convention, and that they are also combined with other objectives to which it may appear that higher priority is given. The Committee requests the Government to re-examine the measures to be adopted with a view to promoting, as a major goal, full, productive and freely chosen employment within the framework of a coordinated economic and social policy, in accordance with Article 2, and to transmit its own observations.

5. The Committee notes the information on the various active labour market policy measures which, under the terms of the Government's programme, should cover 5 per cent of the active population. For the TT and LTK, this objective is an error and it would be better to facilitate finding jobs on the open labour market. In contrast, the SAK considers that the number of beneficiaries should be further increased. In the light of the above terms of the Convention and in consultation with the representatives of the persons affected, the Committee requests the Government to examine measures designed not only to reduce the rate of registered unemployment, but also to generate new jobs, also taking into account the provisions of Convention No. 168 and the comments made by the Committee on the application of that Convention.

6. Article 3. The Committee notes that, according to the TT and LTK, the competent tripartite bodies in the field of employment and labour market policy do not operate in a fully satisfactory manner and that they are only informed so that they can discuss solutions already adopted. The Committee recalls that, under the terms of the Convention, representatives of the persons affected, and in particular representatives of employers and workers, have to be consulted concerning employment policies with a view to taking fully into account their experience and views and securing their full cooperation in formulating and enlisting support for such policies. It hopes that the Government will not fail to examine with the various representatives concerned more satisfactory arrangements for achieving this objective and that it will provide all the necessary information.