Recent employment law developments

Non-discrimination and equality legislation reform imposes new obligations on employers. Other topical employment law issues are a recent case by the CJEU regarding posted workers and the application of a Finnish collective agreement and a Supreme Court case where the court assessed how operationally and economically independent units should be defined in an employer’s determination of whether grounds exist for terminating an employment relationship.

Reform of non-discrimination and equality legislation

Reformed non-discrimination and equality legislation applies to almost all private and public actions. The legal amendments impose sanctioned obligations on employers. The reform came into effect at the beginning of this year, but the ramifications of its effects on companies will most likely clarify over the next few years.

Generally speaking, the reform aims to develop company practices so that non-discriminatory and equal treatment of employees can be ensured at work places, which are becoming more and more diverse. From an employer’s point of view, the Act on Non-discrimination includes the most important amendments. Breach of its provisions entitles an injury party to claim compensation, which is no longer statutorily limited to maximum euro amount. The provision on prohibited grounds of discrimination was amended to add political actions, trade union activity and family relations (e.g. an employee’s marital status) to the list. The Act on Equality between Women and Men still contains provisions on gender equality.

Currently, if an employer does not take sufficient measures to eliminate disturbance between its employees after receiving information about the matter, an employer can be considered to be committing a discriminatory action. In practice, an employer might become responsible in a situation where an incidence of disturbance occurs among its employees. The object of the reform, among other things, is to prompt companies to evaluate and develop their operation models and working conditions so that they have equal and non-discriminatory working environments. As a consequence, the Act on Non-discrimination, for example, imposes an obligation on companies employing at least 30 persons to draft a plan detailing the measures required in order to advance the realisation of non-discrimination at a work place.

CJEU case

According to the case C-396/13 of the Court of Justice of the European Union (CJEU), a Finnish trade union was, contrary to the Polish employer’s claims, entitled to bring a pay claim action before a Finnish court and represent posted Polish workers in the court proceedings. In its ruling, the CJEU confirmed an EU law principle according to which posted workers’ minimum pay is defined in accordance with the legislation or practice of the member state in which the work is performed.

According to the CJEU, the company that has posted workers to another member state’s territory must follow the salary provisions of that member state’s universally applicable collective agreements. Provisions of a Finnish collective agreement applied to a Polish company’s Polish workers that were performing work in Finland. The CJEU stated that it was not sufficient for the Polish company to abide by merely the provisions on minimum pay. Instead, it was required to also follow the provisions on daily allowances and travelling time and holiday compensation.

Supreme Court case

In its recent case 2015:7, the Supreme Court took a stand on the question how an employer should evaluate its operational units effected by a decrease of work, when considering whether or not grounds for terminating an employment relationship exist.

By referring to its previous case law, the Supreme Court stated that when an employer considers redundancies, the grounds for notice should be evaluated by taking into consideration such units of the company that are operationally and economically independent. In the case at issue, an employee was given notice of termination on financial and production-related grounds. The employing company’s need for work force had decreased after a contract of service, which provided work for the employee in question, was terminated. Subsequently, the employer concluded a new contract of service with its customer on different terms.

In its ruling, the Supreme Court stated that the company did not examine the existence of grounds for termination broadly enough. The company was not entitled to regard a single contract of service and related work duties as such an independent unit that could justify its decision to assess the grounds for notice only in relation to the contract of service at issue.