In Finland, the universally binding nature of collective agreements raises the threshold for market entry and, thereby, limits competition, according to Libera, a Helsinki-based market-liberal think tank. (Credit: Heikki Saukkomaa – Lehtikuva)
Libera has announced it has submitted a complaint concerning the universally binding nature of collective bargaining agreements in Finland to the European Commission.
The Helsinki-based market-liberal think tank stated yesterday that the universally binding nature of the agreements provides large employers with legal tools to build a cartel while discriminating against smaller employers and hamstringing the national economy.
Companies with a dominant position in a small industry, it explained, can raise the threshold for entering the industry by thrashing out collective bargaining agreements that are beneficial to themselves and demanding that the agreements be universally binding, thus restricting competition in the industry.
Such a system is also discriminatory against foreign companies seeking to expand to Finland.
Libera stated that the provisions on the universally binding nature of collective bargaining contradict EU law and, especially, EU rules on the single market, which stipulate that the right of companies to freely select their domicile within the union is a fundamental principle of the internal market.
“The European Union Court of Justice has also remarked that utilising the right of domicile principally requires that companies have the freedom to define the quality and scope of their business operations in the receiving member state, particularly in regards to the number of permanent facilities and necessary employees,” it reminded.
