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Finnish Change Security

par Robert Arnkill - 15 Juillet 2010

How would you describe the main characteristics of the Change security system and to what extent it is more efficient that the previous system of PES dealing with restructuring?

 

Transition

Change Security is a co-operation model agreed between Social Partners and the Ministry of Labour since 2005. The key cooperation parties are the employer, the employee and the Employment and Economic Development Office  (as employment offices now are called in Finland). The goal is to enhance proactive job-to-job transition in redundancy situations.

 

For the employee it means a right for employment leave (5 - 20 days depending on the length of employment) with full pay during notice period, help in finding a new job and an individual employment plan done together by specialised employment office effort, and raised unemployment benefit for the period of 20 - 185 days (depending on length of employment) during active job search, training or other active measures.  For employers there is an obligation to inform the employees and the employment office beforehand and to prepare with the help of the employment office an action plan concerning the redundancy situation.

 

The employment office provides information and normal active labour market measures, individual assistance and an activation plan and in case of more than 10 redundancies, often services on-site. There is a network of officials in the employment offices, specialised in dealing with Change Security, covering the whole of Finland, who actively exchange experiences of dealing with the situations.

 

In an independent evaluation Change security was deemed more efficient than normal routine measures dealing with redundancies. An important outcome was the higher professionalism of PES in dealing with major redundancies and the better early cooperation of stakeholders. Re-employment and activation rates were better, but not in a dramatic way. But there are also displacement effects, where workers with long and good industrial work histories crowd out young entrants to the labour market in the area, and also clear selection effects according to age, gender and health, despite quite well applied activation measures.

 

What did the Change security system modify in Finland in terms of PES practices but also in terms of other practices: companies, trade unions, local authorities? Are there ongoing debates running on Change security?

For PES Change security meant a more active and specialised role in dealing with redundancies, especially big ones. By forming a network of Change Security specialists, engaging in mutual learning, and also training other PES-officials in dealing with the situations, the dissemination of good professional practice was enhanced. Altogether Change security meant a more working-life and company oriented practice in the PES.

 

The Change Security system has increased early cooperation between companies, public services, the workers, and also other parties like labour unions and local and regional actors. The measure was quite well received by all stakeholders and it has clearly meant a well-received positive role for the PES in helping to deal with difficult situations.

 

There is no major debate around the measure, there seems to be broad agreement that it needs to be generally further improved. One debate relating to Change security is about severance pay, where some unions in particular, have been active in demanding higher levels. Also Change security alone is not enough in dealing with really major company closures, like what has happened in paper industry, especially in locations, which have grown and thrived around the big factories, so people in different parts of Finland have been demanding further and bigger measures to deal with the situations, and this in turn, is a matter broader industrial and employment development.

 

Is flexicurity under debate in Finland now and if yes what are the terms of its debate?

Flexicurity has been taken as a concept to be further developed in Finland, but there is no really active or heated debate around it. It seems that the concept has been, more or less, absorbed in the "development of everything", without really new or cutting edge initiatives- at least not as yet. In 2009 a tripartite agreement on the principles and guidelines on the development of flexicurity was agreed, involving the national government, key ministries and the social partners. Three working groups were set to make suggestions by the end of 2010 on three topics: (1) enhancing job-to-job transitions (2) new initiatives in labour market regulation (3) quality of working life. In general terms, the major strategic question underpinning the flexicurity development and debate in Finland is the need to prolong working careers both at the beginning and end, i.e. transition from education to work (which is prolonged) and rise the actual pension age (which now effectively is about 59 years). Finland has one of the steepest demographic changes and is facing shortages of labour once the global crisis is over.

 
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Auteur(s) : Robert Arnkill