Collective agreements specify industry-specific minimum terms and conditions with which employment contracts and employment relationships must comply. Collective agreements define, for example, the salaries, sickness allowances, working hours, leaves and midweek holiday compensations of each industry. The agreements are concluded between trade unions and employers’ associations.
Complying with collective agreements
A collective agreement may be either universally or normally binding.
If a collective agreement is universally binding, all companies operating in the industry it concerns must comply with its regulations even if the company in question does not belong to an employers’ association.
If a collective agreement is normally binding, it only concerns companies that have signed it or belong to an association that has signed it.
Collective agreements and your company’s everyday operation
Collective agreements affect the conclusion of employment contracts. The terms and conditions of your company’s employment contracts may not contradict the applicable collective agreement. In addition, from the employee’s perspective, the terms and conditions may not be inferior than those of the collective agreement. Use industry-specific employment contract forms in order to ensure that all terms and conditions required by law and relevant to the industry in question are included in the contract.
Make the Employment Contracts Act and the nationwide collective agreement freely available to your employees.
For further information on collective agreements, contact the Regional State Administrative Agencies’ occupational safety and health officials. They will provide you with advice on questions related to, for example, employment contracts, salaries, working hours and annual leave. The occupational health and safety officials monitor compliance with universally binding collective agreements also in companies that do not belong to an employers’ association.