Unemployment fund or trade union?

Topics

• Income security
• YTK

Can an unemployment fund and a trade union be compared? In principle, there is no point in comparing the two, because the unemployment fund and the union are different things. However, as a consumer choice, the comparison can make sense.

Every now and then I find myself in a debate or come across a debate where I see unemployment funds and trade unions getting helplessly confused with each other. This is understandable, as unemployment funds have a history in trade unionism and even today almost all unemployment funds are closely linked to trade unions. It is also misleading, especially if the discussion turns to comparing the YTK as an unemployment fund with a trade union.

The Fund and the Union have different roles

What the unemployment fund and the trade union have in common is that both are linked to the world of work and both collect membership fees from their members. However, they have different tasks, funding and operating logic.

The unemployment fund is easy to define because its activities are based directly on the law. According to the Unemployment Fund Act, the Unemployment Fund is a mutually liable body whose task is to provide a daily earnings-related allowance to its members. The Unemployment Fund may not do anything else.

Trade unions are associations and their activities are therefore limited by the Associations Act. Associations are quite free to define their activities in their statutes. Typically, their statutes state that their mission is to safeguard, defend and improve the social, economic, professional and educational interests of their members. Unemployment allowances cannot be paid by the association to its members as it is not an unemployment fund.

The unemployment fund and the Trade Union are therefore not alternatives to each other. Membership of the unemployment fund does not preclude membership of the union, nor does membership of the union preclude membership of the unemployment fund. Moreover, each has its own functions which the other is not legally allowed to perform. Clearly, there is no point in comparing the unemployment fund with the union.

What can you get and for what money?

However, the difference is not clearly visible, as the communication and marketing of the unions often presents the earnings-related daily allowance as part of the union’s range of services and membership fee. The point is that, when joining a union, you can also join an unemployment fund that is close to the union. In this case, from the member’s point of view, one membership fee includes two membership fees: the union and the unemployment fund.

If one compares a single unemployment fund with a combination of a union and an unemployment fund, the result is clear. The combination of a union and an unemployment fund provides a wider range of services but at a significantly higher price. In this comparison, the unemployment fund alone provides only unemployment benefit, but it is inexpensive.

The unemployment fund and the union are different actors and comparing them does not make sense. However, as a consumer choice, it makes perfect sense to compare the unemployment fund and the combination of the union and the unemployment fund. In the end, it is a question of what kind of services you feel you need and what you are prepared to pay for them.

Originally published 13.8.2019.

Petja Eklund

Senior Specialist

YTK’s Petja Eklund has made enough mistakes to call himself a Senior Specialist. And it is special indeed that the YTK has such a renaissance genius who blogs from about anywhere. To the point and analyses, but rarely is he able to resist the temptation to mix in humour. Despite all his virtues, Eklund is always manages to defend mankind and an open society. Norms and institutions are for citizens, never the other way around.