Finland’s strong workers’ rights extend to dark stores

This article is written by guest author Fanny Malinen. It is intended as an independent journalistic snapshot of dark stores and workers’ conditions in Finland. It was commissioned as part of a joint project between the FES Competence Centre on the Future of Work and UNI Europa.

Like in many other metropolitan areas in Europe, in Finnish cities it is now possible to order almost anything to your door, near instantly. The trend that started with takeaway food has broadened to flowers, football merchandise – and especially since the Covid-19 pandemic, everyday groceries. 

With this, the concept of dark stores has been born. Although some online shopping gets picked in supermarkets amongst customers, there are also dedicated stores only for pickers.

Anni Uutela works in a dark store in the city of Jyväskylä. Having previously picked online orders in conventional supermarkets, when she moved city, a job at the quick commerce company Foodora caught her eye. Her workplace is one of ten Foodora Markets.

Uutela likes the work, which involves unloading goods when they arrive, shelving, then picking shopping to order. “I knew from my previous work that you need to be quick but also careful and accurate so customers get the right products, they are in good condition and dates are in order.”

The work is faster in the absence of customers. The pace of deliveries is different, too: Foodora does 30-minute delivery, whereas traditional supermarkets deliver with at least a day’s notice. “We need to be alert when an order comes through to the scanner. In previous workplaces the lists of how many orders we pick each day came through a few days earlier, here we never know the amount of what we pick”, Uutela says. However, this does not affect her workload or shifts: she works 20 hours per week and is employed directly by the company. 

Foodora expanded into retail in early 2021. Anni Ahnger, Head of Department at the company explains that they first had to estimate demand, but it has now settled. Foodora use data to know their customer base so they are able to plan work shifts the required six weeks in advance.

A growing market

Foodora, owned by German Delivery Hero, is one of Finland’s two quick commerce companies. Restaurant takeaways still form the majority of its business, however retail is growing faster: 310 percent in 2022. Main competitor is Wolt, a Finnish start-up that in 2022 was sold to US company Doordash.

The Finnish grocery sector is heavily concentrated: overall, two players S group and the K group together hold over 80 percent of the market. Online shopping exploded for them too during the pandemic. HOK-Elanto, S group’s regional cooperative of Helsinki area, has a small number of dark stores and employers pickers in larger supermarkets.

Jani Pölönen is the trade union representative at HOK-Elanto. He has not come across any major issues – pickers generally like the work.

“The pace is quite fast. It takes people a while to locate the products, especially in the larger supermarkets. That is a challenge before people learn the job. Sometimes complaints or not finding a product can slow down the work”, he explains. “When I visit workplaces, it is sometimes hard to interrupt the pickers with their lists because they have this work drive. People like it, days go quickly when they are very focused.”

The larger grocery chains deliver online shopping through transport companies. There is also co-operation between them and newer companies: shopping can be ordered from some of S group’s smaller stores through quick delivery from Wolt.

Senior researcher Mikko Perkiö from Tampere University has led a research project into delivery couriers in Finland. He says the quick commerce companies are still exploring the revenue potential of the Finnish market. “They are looking at a reasonable price for example. The fee the platform companies have been charging restaurants for the delivery has probably felt quite high for the retail sector. The grocery chains are wondering whether quick commerce makes sense, or whether they should do the deliveries themselves rather than outsourcing them to large delivery operators. That is not quite settled yet.”

According to Perkiö, the overall good working conditions in the retail sector are due to the fact that workers are fairly well organized into unions.

Collective bargaining is legally binding

Minimum pay and working conditions in Finland are covered by collective bargaining agreements for each sector. These are negotiated by representation from employees and employers: trade unions and employers’ associations.

When negotiating parties represent enough of the sector, the collective agreement becomes legally binding for the sector – even for employers who were absent from the bargaining.

This means trade unions and employers’ representatives maintain good relationships, as the agreements need to work for both sides and the institution needs to be maintained and developed, explains Sirpa Leppäkangas, collective bargaining specialist from the Service Union United (Palvelualojen ammattiliitto, PAM). “That forces us to work together, which is lucky because we have for a long time had a very good relationship [with the Commerce Federation].”

Couriers still the weak link

Outside the stores however, there are still unresolved issues in the quick commerce sector. Same couriers deliver groceries as takeaway food, and they currently operate as self-employed persons. This brings flexibility but also leaves them more exposed to social risks, lacking the comprehensive social security coverage that employees have. Self-employed workers insure themselves to very different extents, Perkiö explains.

In Finland, people can join different unemployment funds depending on their employment status and sector. This means that if couriers join PAM’s unemployment fund, it is possible that in case of unemployment they would be classed as self-employed and the union would not be able to pay them, Leppäkangas explains. This means that they would also have to join another unemployment fund just in case.

The union is on the case with these workers, she says. PAM has a helpline for employment related queries, and also proactively reach out to workplaces they know are not well unionised.

The couriers’ status has been subject to scrutiny from the point of view of taxation and social security. “There are different decisions from different authorities”, Leppäkangas says. The union would like the starting point to be that the delivery personnel are employees, unless there are good reasons for self-employed status. PAM has brought a legal challenge to determine delivery couriers’ status under employment law.

Ahnger from Foodora says the company is following the cases actively and will act accordingly. “It would mean changes, including that the couriers who work very few hours might quit. If this change comes, it comes, like it has in other countries.”

Leppäkangas says bogus self-employment in Finland is becoming more common. Although work is changing faster than the structures that guide it, collective bargaining allows for resolving problems that arise. “We have incredibly flexible sector-wide collective agreements in the private service sectors. Work can be organised very flexibly from both the company and the worker’s perspective, also as employment.”

As an example she cites seasonal work. Work in ski centres was previously temporary, but after negotiations between the parties and a pilot scheme, an agreement was negotiated that allows for large seasonal fluctuation in working hours but enables year-round permanent contracts.

“All situations have been resolved when people have sat around the table and looked for a solution”, she says. “If employers want to have work done without taking on any risk, that is more an ideological choice than a question of the collective agreement’s rigidity.”