Pam Magazine 2/2015: Salary reduction is an unlawful measure in competitive bidding
After competitive bidding, ISS offered the same position for a lower salary. The Supreme Court agreed with Milla Reijonen: this is not acceptable behaviour.
ISS Palvelut dismissed Milla Reijonen, postal employee, six years ago on economic and production-related grounds, when she refused to continue in her old employment with a lower salary. The legality of the dismissal was first handled by the district court, then the court of appeal, and after ISS' appeal, the Supreme Court. All court instances considered the firing illegal.
Reijonen worked for Nokia Siemens Networks in Tampere and her salary was reduced when her unit's service agreement was subjected to competitive bidding. The competitive procurement was won by ISS Palvelut that had managed the postal services until the bidding. The new service agreement was reduced with regard to duties and pay. In the employer's view, it was justified to reduce the salary as there was less work in sorting the mail. However, Reijonen's work remained the same, and this was given emphasis in court.
The court also stated that mail sorting was not an independent economic or administrative part of ISS, and there was no financial reason to reduce the salary on the big business level. Therefore, ISS did not have economic and production-related grounds, or reasons due to the reduction of the amount of work, to dismiss an employee because she did not agree to a salary reduction.
It is difficult to obtain leave to appeal to the Supreme Court from the decisions of the lower courts. The decisions of the Supreme Court establish precedents and provide support for resolving similar disputes.
– No one can complain now: salaries cannot be competed with, Reijonen says.
Reijonen is in the same employment, even following the trials. The Act provides that if a company dismisses an employee for economic and production-related grounds and requires more workforce after a period of nine months, work has to be offered to those dismissed. This is how Reijonen got her job back. She had to start as a “new employee” after the competitive bidding, and the terms of her employment had changed.
– My salary is now lower than what it was 16 years ago when I started working here.
However, she enjoys her work, which she did before ISS became the employer. Now that the legal proceedings are finally over, Reijonen is hopeful of receiving compensation.
PAM lawyer Arja Pohjola considers the Supreme Court judgment extremely significant.
– Had the end result been different, it could have been used as a justification to reduce the salaries of the employees in competitive bidding in the future, Pohjola explains.
Milla Reijonen agrees.
– This does not only concern me; it’s about a large number of employees in all fields where competitive bidding occurs. If salary reductions were allowed, I wonder how many times my salary would have been reduced?
Text:: Tiina Ritala