Striking a Balance: Lessons from Finland's Firm Stance on Industrial Peace and the South African Perspective

Finland is adopting a firm stance against unprotected strikes, and there are lessons to be learned from a South African perspective.

Recently, Finland proposed amendments to its industrial peace legislation on 29th February 2024. Over the past two years, the country has grappled with persistent industrial action by unions protesting against the government’s labour reforms and welfare cuts.

The proposal outlines several changes to the current legislation:

1. The compensatory fines for participating in an unlawful strike would increase from EUR 37,400.00 to a maximum of EUR 150,000.00 and a minimum of EUR 10,000.00. These fines can only be imposed on a party to a collective agreement bound by the peace obligation in the agreement.
2. An employee continuing industrial action deemed unlawful by the Labour Court could face a fine of EUR 200.00.
3. When the obligation to maintain industrial peace is in force, solidarity actions cannot be carried out if their harmful consequences for those not party to the main dispute would be disproportionate.
4. Political work stoppages would be limited to a maximum duration of 24 hours, and other industrial action to 2 weeks.
5. Seven days’ notice must be given before organising a solidarity action or political industrial action in the form of a work stoppage.

If accepted, these amendments will come into force on 1st July 2024.

Comparing the proposed amendments to Finland's industrial peace legislation with the current legislation and practices in South Africa, with its stagnant economy and highly unionised environment, rife with a history of violent and damaging labour unrest, reveals parallels between the two countries. Finland's objective with the reform is to significantly reduce instances of industrial action, aiming to safeguard the productivity and competitiveness of Finnish companies while improving the overall image of Finland as a country with a stable labour environment to attract investment into local markets.

Currently, in South Africa, the only remedies employers have against unprotected strikes are:

1. Restraining interdicts - Section 68(1) grants the Labour Court exclusive jurisdiction to grant an interdict restraining any person from participating in a strike that does not comply with the provisions of the Act or any conduct in contemplation or in furtherance of such a strike.
2. Compensation - payment of ‘just and equitable compensation’ for any loss attributable to an unprotected strike. In the recent case of NUMSA obo Dhludhlu & others v Marley Pipe Systems (SA) (Pty) Ltd (unreported, JS878/17, 23 January 2020), the Labour Court found that each of the 145 employees is jointly and severally liable for the payment of R829,835.00 for losses incurred by the Employer on the day of the unprotected strike.
3. Discouragement – the employer may withhold wages during unprotected strikes, and the employer may also consider other measures to dissuade employees from striking, e.g., withholding bonuses, rewarding non-striking employees with additional bonuses, etc.
4. Disciplinary action - The disciplinary penalty most often imposed on strikers after their return to work is a written or final written warning. However, the Code of Good Practice: Dismissal, expressly states that unprotected strikes may be regarded as a form of misconduct justifying dismissal.
5. Lockout – an employer may consider locking out employees until they comply with the employer's proposal.

South Africa currently does not have legislation allowing for the issuance of fines to unions or employees who embark on unprotected strikes. In Finland, the amendments to fine unions and employees seek a deterrent effect that will influence the willingness of individuals to embark on unprotected industrial action and for the increased fine to affect the work of a trade union.

In Finland, solidarity action can be compared to what we know in South Africa as Secondary Strikes. The current practice in Finland enables a trade union to support the industrial action of another trade union, or they allow workers organised in other collective bargaining sectors of the same trade union to support workers in some particular sector other than their own. Trade unions in Finland use sympathy strikes to accelerate collective bargaining in exceptionally difficult circumstances. Sympathy strikes are lawful if they are called in support of already lawful industrial action. With the amendments, a lawful sympathy strike should be reasonable in relation to the objectives. This means that if the amendments are adopted, an external arbiter would have to determine when a sympathy strike is lawful. Recently in South Africa, the Constitutional Court in Association of Mineworkers and Construction Union and Others v Anglo Gold Ashanti Limited t/a Anglo Gold Ashanti and Others, took a similar stance and determined that a “Secondary Strike” must be “proportionate” to be “reasonable”, although the only recourse Employers have is to approach the Labour Court to have the secondary interdicted and declared unprotected. Similar to Finland’s proposed amendments, one of the elements for a protected strike in accordance with Section 66(2) is that at least seven days’ notice must be given before embarking on a secondary strike.

Perhaps the most contentious amendment is the limit on the duration of political work stoppages and industrial action. Freedom of association and the associated right to engage in industrial action are enshrined in the European Convention on Human Rights and in the Constitution of Finland. In South Africa, the right to strike is also enshrined in our Constitution under section 23, and limitations to this right, in the interest of other values and interests, are provided through the Labour Relations Act.

Finland’s political work stoppages is akin to South African protest actions and have deep roots in South Africa's history and persist as a common form of expression today. According to section 77 of the LRA, non-essential service or maintenance service employees have the right to engage in protest action under specific conditions:

1. The protest action must be called by a registered trade union or federation of trade unions.
2. The said union or federation must have served a notice on NEDLAC, outlining the reasons and nature of the protest action (s77(1)(b) notice).
3. The issue prompting the intended protest action must have been deliberated upon by NEDLAC or any other relevant forum where concerned parties can participate in resolving the matter.
4. At least 14 days prior to the protest action's commencement, the registered trade union or federation must have served a notice on NEDLAC expressing their intention to proceed with the protest action.

Examining Finland's proposed amendments to its industrial peace legislation, particularly regarding the imposition of fines and limitations on industrial action duration, contrasted against the current South African context, significant parallels and contrasts emerge. Finland's bold stance aims to curtail disruptive strikes and foster a more stable labour environment conducive to economic growth and investment. Comparatively, South Africa grapples with a different landscape, where remedies against unprotected strikes are limited to interdicts, compensation, discouragement measures, disciplinary actions, and lockouts. The absence of fines for unions or employees undertaking unprotected strikes in South Africa underscores a divergence in approach. The proposed amendments signal a shift towards deterrence, echoing global trends in labour regulation. The notion of proportionality in solidarity actions, akin to South Africa's secondary strikes, highlights a shared concern for balanced labour relations. However, the requirement for external arbitration in determining the lawfulness of sympathy strikes introduces a nuanced layer, aligning with recent South African jurisprudence. Nonetheless, the proposed limit on strike duration remains contentious, invoking debates around the delicate balance between the right to strike and other societal interests. Both Finland and South Africa navigate the complexities of labour rights within constitutional frameworks, underscoring the ongoing evolution of labour law in response to economic and social imperatives. As Finland charts a course towards enhanced industrial peace, South Africa stands poised to draw valuable insights from this trajectory, enriching its own labour landscape with lessons learned and shared experiences.