Local agreements and posting companies

Workplace bulletin 2/2025 | Published in English on 12 May 2025

The legislative changes that entered into force on 1 January 2025 provide more opportunities for local bargaining. Local bargaining refers to workplace-specific bargaining on a specific provision of a collective agreement, such as working hours, annual holidays or pay. The increased scope of the right to local bargaining also applies to EU/EEA -based companies that post workers to Finland. An unorganised employer may only conclude a local agreement on the basis of collective agreements concluded after the turn of the year. Once a local agreement has been concluded, it must be submitted to the occupational safety and health authority.

Right to local bargaining for posting companies in the EU/EEA has increased

Handshake.

An amendment was made to the Act on Posting Workers adding the possibility of concluding a local agreement. After the amendment, all companies, including companies posting workers to Finland, are now able to engage in bargaining on matters that organised companies were already able to conclude local agreements on previously. For example, local bargaining may in future be used to agree on working hours between posting companies and their posted workers, if permitted by the collective agreement.

The posting of workers involves a person being posted from another country to carry out work in Finland under an agreement as subcontracted work, as an internal transfer within a company or as temporary agency work. The posting of workers contributes to the freedom to provide services within the European Union.

As a result of the legislative amendment, local bargaining is possible for posting companies and their personnel under the same conditions as it is for employers based in Finland. However, the possibility for concluding local agreements is limited to companies domiciled in the EU/EEA. In other words, a local agreement cannot be concluded in the future by companies domiciled outside the European Union or the European Economic Area.

What changed from the perspective of posting workers?

The employer no longer needs to be organised, i.e. a member of the employers’ association, for the company to be able to undertake local bargaining on the matters that are permitted by the collective agreement. In the past, local agreements based on collective agreements were only possible for employers belonging to a union.

The possibilities for representing employees were also increased. However, the starting point is that the local agreement is concluded between the contracting parties required by the collective agreement.

If the collective agreement requires that a shop steward is the contracting party representing employees, and one has been elected by the employees, the agreement is concluded with the shop steward. If no shop steward has been elected, the secondary procedures laid down in the collective agreement shall be followed. If the collective agreement does not specify how an agreement will be concluded in the absence of a shop steward, the agreement can be concluded with the elected representative. In this case, posted workers must elect a representative from among themselves to represent them in matters concerning the local agreement. The employer must ensure that the elected representative is sufficiently well placed to manage the tasks arising from local agreement.

Conclusion of an agreement and financial sanctions

The parties to a local agreement are the employer and the representative of the employees, such as the elected representative, if the collective agreement allows agreement with the elected representative.

However, the possibility for an agreement is not unlimited. The limits of the agreement are set in generally applicable collective agreements, i.e. the collective agreement in the sector outlines what can be agreed on. A local agreement also cannot deviate from the provision according to which the terms of employment in the country of origin must apply to posted workers if they are more favourable to the employee.

The local agreement must be concluded in writing and it must be submitted to the occupational safety and health authority within one month of the conclusion of the agreement. A financial sanction of EUR 1,000 to 10,000 may be imposed for neglecting the obligation to submit the agreement. A combined financial sanction of up to EUR 15 000 may be imposed for two or more instances of negligence.

Posting companies are also required to submit any local agreements that comply with the generally applicable collective agreement that applies to them to the occupational safety and health authority. A local agreement is submitted to the registry of the Occupational Safety and Health Division in whose area the employees work. The contact details for registries are listed at Contact information.

If a company has Suomi.fi IDs in use, the local agreement can be submitted through the occupational safety and health e-service. The possibility to submit contract via the e-service will become available during the spring.

Information that must be submitted to the occupational safety and health authority

The following information must be submitted to the occupational safety and health authority at the time of concluding a local agreement:
  • Employer’s details
  • Details for the party submitting the agreement
  • Person providing additional information (if different from the party submitting agreement)
  • Local agreement details
  • Date on which the agreement was concluded
  • Agreement start and end date
  • The collective agreement on which the agreement is based, including, if necessary, the section of the collective agreement on which the agreement is based
  • Personnel representative or party with whom the agreement has been concluded (e.g. shop steward, elected representative, other party specified in the collective agreement)
  • Information on whether the agreement contains confidential information.

The expansion of scope only applies to new collective agreements

Due to a transitional provision, an unorganised employer may only conclude a local agreement on the basis of collective agreements concluded after 1 January 2025. However, an employer who is not a member of an employers’ organisation may only conclude a local agreement after the collective agreement has been concluded again after 1 January 2025.

The regular working hours systems laid down in the Working Hours Act are an exception to this. With regard to these, local bargaining is also possible on the basis of older collective agreements. Old agreements do not need to be submitted to the occupational safety and health authority, but agreements concluded after 1 January 2025 must be submitted.

The occupational safety and health authority supervises and provides advice

The occupational safety and health authority supervises the local bargaining of both companies based in Finland and companies posting workers to Finland. The supervision includes the examination of both the content of an agreement and matters related to the contracting parties.

More information on local bargaining:

Contact persons:
Riikka Mandelin-Hakala, Senior Officer, +358 295 018 095
Antero Seppänen, Senior Officer, +358 295 018 181
Email: [email protected]
Occupational Safety and Health Division, Regional State Administrative Agency for Southwestern Finland