UPM and Paperworkers’ Union agree on first-ever business-specific collective labour agreements – strike ends at UPM mills in Finland

Investor news 22.4.2022 16:15 EEST

UPM and the Paperworkers’ Union have agreed on first-ever business-specific collective labour agreements for five UPM businesses. The strike at UPM mills in Finland will end immediately and employees will return to work. The strike covered UPM Pulp, UPM Communication Papers, UPM Specialty Papers, UPM Raflatac and UPM Biofuels units in Finland. UPM will restart customer deliveries as soon as possible.

The conciliator submitted settlement proposals for separate collective labour agreements for UPM Pulp, UPM Communication Papers, UPM Specialty Papers, UPM Raflatac ja UPM Biofuels yesterday, and both parties approved them today.

“We are very pleased that the parties have approved all settlement proposals and that the Paperworkers’ Union’s long strike ends. UPM and the union have made history together by agreeing on five business-specific collective labour agreements, which replace the paper industry´s old agreement stemming from the 1940’s. UPM’s long-standing goal has been to take collective bargaining to a level where the conditions of the work are best known, i.e. the individual businesses. The negotiations lead to agreements that benefit both the businesses and the employees and strengthen the premises for success well into the future,” says Riitta Savonlahti, Executive Vice President, Human Resources, UPM.

“In the negotiations, many aspects of the contracts were viewed from a totally new standpoint. The process was long but, in the end, we were able to agree on terms of employment that take the needs and special features of our businesses into account. New terms enhance the productivity and competitiveness of the businesses and mills as well as ensure good terms for employees, too,” says Jyrki Hollmén, Vice President, Labour Markets at UPM.

The contract period of the new agreements is four years. Pay increases are in line with the current industry norm. Revisions to wages will be negotiated after the first two years. New agreements are structurally less complicated than the old one, and the number of pages is about half of the earlier.

A significant change in all business-specific agreements is the substitution of periodical pay with hourly pay. Hourly wages are paid by the work done, making the formulation of the pay easier to understand. New collective labour agreements make it possible to take competence and performance into account in wage formulation. All businesses also agreed on added flexibility to shift arrangements and the use of working time.

Business-specific solutions to increase productivity

UPM Pulp agreed on switching to uninterrupted 365-day running of the pulp mills and more flexible use of workforce during the long maintenance shutdowns. Restrictions on the use of fixed-term employees were removed. Going forward, wage formulation supports learning and competence, and the development of workplace practices.

UPM Communication Papers, our graphic paper business, agreed on additional hours and flexible use of working time, which are essential for smooth operation. Depending on the working time format, working hours will increase by 24-32 hours per year, except for day work, where the working hours remain unchanged. With the changeover to hourly pay, the extra hours increase earnings accordingly. On weekly level, the increase of working hours is about half an hour per week. In addition, an encouraging pay system was agreed, which improves particularly the earnings of maintenance and day work. The agreement includes a wage payment guarantee for the first two years of the contract period.

UPM Specialty Papers agreed on terms that improve competitiveness and reliability of deliveries. The new collective labour agreement widens the scope of local bargaining also at mill level and improves operational profitability during public holidays. The formulation of pay rewards good performance better than previously.

UPM Raflatac’s collective labour agreement makes it possible to build more flexible working hour arrangements and resourcing of Tampere factory. Thus, the new agreement paves the way for an increase in capacity utilization, that improves production efficiency and opens opportunities for employment.

UPM Biofuelsi.e., the Lappeenranta biorefinery, agreed on flexible use of shifts and training in shift work. Pay structure supports personal development and good performance better than before. In addition, the parties agreed on arrangements, which enable the refinery to be kept in production-ready state, instead of complete ramp-down, also under possible work stoppages.

“In Finland, we have excellent mills and highly skilled employees. It is good that we get to start the work at mills again. Now it’s time to move on together,” says Riitta Savonlahti.

The Paperworkers Union’s strike at most UPM mills in Finland began on 1 January 2022 and lasted almost four months. Originally, approximately 2,100 members of the union went on strike, but approximately 200 of them were ordered to uphold tasks critical to society, such as heat generation and water management, by a court order.

UPM’s businesses in the mechanical forest industry, UPM Plywood and UPM Timber, signed each a 3-year collective labour agreement with the Industrial Union already in December 2021 prior to the ending of the previous agreement. The agreements allow for flexible market related adjustments in operations and have already benefited both the businesses and their employees.

UPM’s interim report will be published on 26 April 2022.

For further information please contact:
Jyrki Hollmén, VP, Labour Markets, UPM, tel. +358 20 4150 051
Juha Kääriäinen, Head of UPM Pulp negotiation team, tel. +358 40 775 0355
Antti Hermonen, Head of UPM Communication Papers negotiation team, tel. +358 400 280 839
Tomi Hytönen, Head of UPM Specialty Papers negotiation team, tel. +358 40 5417714
Joni Salmi, Head of UPM Raflatac negotiation team, tel. +358 40 631 7285
Jaakko Nousiainen, Head of UPM Biofuels negotiation team, tel. +358 40 758 6881

UPM, Media Relations
Mon-Fri 9:00-16:00 EET
tel. +358 40 588 3284

We deliver renewable and responsible solutions and innovate for a future beyond fossils across six business areas: UPM Fibres, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Communication Papers and UPM Plywood. As the industry leader in responsibility, we are committed to the UN Business Ambition for 1.5°C and the science-based targets to mitigate climate change. We employ 17,000 people worldwide and our annual sales are approximately EUR 9.8 billion. Our shares are listed on Nasdaq Helsinki Ltd. UPM Biofore – Beyond fossils. www.upm.com

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