Finland's four-party government coalition has reached a critical compromise on implementing the EU's Pay Transparency Directive, ending a months-long internal dispute that threatened to stall the flagship equality legislation. A proposal is now set to be sent for official consultation, marking a significant step toward meeting the June 2026 EU deadline. The breakthrough came after the nationalist Finns Party secured concessions addressing its core fear that the directive would undermine Finland's cherished collective bargaining system.
A Political Impasse Over Finnish Labor Traditions
The coalition, led by Prime Minister Petteri Orpo's National Coalition Party, had been locked in tense negotiations since the directive was adopted. The Finns Party argued that the EU's four criteria for evaluating work of equal value—competence, workload, responsibility, and working conditions—could force harmonization of wages across different collective agreements within the same company. This, they contended, would increase employer costs and incentivize a shift toward company-specific agreements, eroding the national bargaining framework.
“In multi-sector companies, situations could arise where pay across different collective agreements is harmonized within the same job classification level,” argued Finns Party MPs during internal debates. Their coalition partners from the National Coalition Party privately suggested the Finns were advancing arguments aligned with Finland's main employer confederation, EK. The deadlock centered on a fundamental question: could EU-mandated pay transparency coexist with Finland's autonomous labor market model?
The Technical Fix That Unlocked the Deal
The compromise proposal, crafted under the leadership of Social Security Minister Sanni Grahn-Laasonen, introduces a crucial limitation. According to the draft text obtained by Nordics Today, jobs based on different collective bargaining agreements will not be considered comparable if they involve “inherently different types of work.” This technical formulation directly addresses the Finns Party's primary concern by preventing mandatory wage comparisons between, for example, a plumber and a firefighter working for the same municipality but under separate union-negotiated contracts.
Minister Grahn-Laasonen's office and the Ministry of Economic Affairs and Employment now assess that the proposal does not endanger the collective agreement system. A key clause states that if a collective agreement already uses gender-neutral criteria to determine pay, an assessment of work of equal value may be possible under certain conditions. This creates a pathway for transparency while respecting existing bargaining structures.
Trade Unions and Employers Weigh In
The Finnish trade union movement has viewed the Finns Party's concerns with skepticism. Jarkko Eloranta, Chairman of the Central Organisation of Finnish Trade Unions (SAK), has previously dismissed the risk to the collective bargaining system as a “straw man constructed by employers.” From the union perspective, the directive is a tool to combat gender-based pay discrimination, not an instrument to dismantle Finland's labor market institutions. The current proposal is not causing celebration on the employee side, but is seen as a workable foundation.
Employer organizations have been closely monitoring the government's interpretation. Their central worry has been the potential administrative burden and cost implications of expansive comparability requirements. The compromise, by narrowing the scope of comparison, alleviates some of those practical concerns. The final legislation will still require companies with over 100 employees to report on gender pay gaps, a significant new transparency obligation for Finnish businesses.
The Long Road to Implementation
While the political agreement to send the proposal for consultation is a major hurdle cleared, the process is far from over. The consultation round will gather feedback from unions, employer groups, NGOs, and other stakeholders. This feedback may lead to further technical adjustments. The government aims to have the proposal in consultation before Christmas, setting the stage for legislative drafting in early 2025.
Finland's implementation will be watched closely by other Nordic EU members with strong collective bargaining traditions, such as Sweden and Denmark. The Finnish solution—prioritizing the autonomy of different collective agreements—could serve as a model for balancing EU equality directives with national labor market models. The directive itself allows member states flexibility in how they achieve its goals, particularly regarding the assessment of work of equal value.
A Test for Coalition Cohesion
This agreement represents a vital test of cohesion for Orpo's right-wing coalition, which has faced other policy disputes. Finding a legally sound solution that satisfied the Finns Party's demands without diluting the directive's purpose was a delicate political and legal task. The outcome suggests a government capable of negotiating complex EU transposition issues, even on politically sensitive topics touching national identity like labor relations.
Experts note that the real impact will only become clear once the law is applied. “The final legislation will inevitably involve compromises,” said Dr. Laura Aho, a labor law professor at the University of Helsinki. “The key will be whether the implemented rules provide meaningful transparency for identifying gender discrimination while avoiding chaotic interference in a system that has generally served Finland well.”
The government's next challenge is to draft legislation that is both legally compliant and practically functional, ensuring that the pursuit of pay equality strengthens, rather than destabilizes, the Finnish workplace.