Finnish employment legislation is reviewed – what kind of amendments will come into effect next year, and what changes should still be expected?

Government bills proposing amendments to Finnish employment legislation were passed by the Finnish Parliament on 30 November 2016. The legislative amendments enter into force on 1 January 2017, and they concern, inter alia, fixed-term employment relationships, trial period, re-employment obligation, change security, co-operation between employers and employees and occupational health care. Furthermore, amendments to the Working Hours Act and the Annual Holidays Act are expected. The update of said Acts is currently in progress in a tripartite working group established by the Finnish Ministry of Economic Affairs and Employment.

Hiring a ‘long-term unemployed’ for a fixed-term without a justified reason

A ‘long-term unemployed’ can be hired for a fixed-term without any justified reason even if the employer has permanent need of labour. A ‘long-term unemployed’ refers to a person who has been an unemployed job-seeker continuously for the previous twelve months according to the Employment and Economic Development Office’s (TE-Office) notice.

The fixed-term contract mentioned above can be concluded for a maximum of twelve months. Alternatively, the employer and the employee can also under certain conditions agree to a maximum of three shorter fixed-term contracts provided that their total duration does not exceed twelve months.

Length of trial period extended to six months

The maximum length of trial period is extended from the current four months to six months. The employer is also entitled to extend the trial period if the employee is absent from work during the trial period due to family leave or disability. Such periods of absence do not automatically extend the trial period; in order to extend the trial period, the employer must always notify the employee of the continuation of the trial period before the end of the initial trial period. In a fixed-term employment relationship, the trial period may not exceed half (50 %) of the total duration of employment or six months, even when extended as described above.

Length of re-employment obligation decreased

The length of the re-employment obligation is shortened from the current nine months to four months. However, if the employment relationship has lasted uninterruptedly for twelve years until the termination of employment, the re-employment obligation is exceptionally six months. The upcoming amendments concern only the length of re-employment obligation; the obligation’s content will remain the same.

Obligation to provide education, training and continued occupational health care

Specifications have been made to the change security of those employees whose employment has been terminated on financial and production-related grounds after having worked for an employer continuously for at least five years prior to the termination of employment. The upcoming legislative change applies to employers who normally employ at least thirty persons. Such an employer is obligated to provide an opportunity for the above-mentioned dismissed employees to participate in training or education conducive to employment paid for by the employer. The value of said training or education must be equivalent to one month’s salary of the individual employee or, alternately, the average monthly salary of the personnel employed by the employer, whichever is higher. Moreover, the foregoing training or education should be executed within two months after the period of notice. Only upon a weighty cause may the training or education be executed at a later time. If the employer neglects the fulfillment of its above-mentioned obligation, the employer is obligated to pay the employee as a non-recurrent compensation an amount equivalent to the value of such training or education. Alternatively, the employer can fulfill it legal obligation by offering to pay either entirely or partially for the training or education that the employee has acquired himself or herself. Moreover, the upcoming legislative change takes into consideration industry-wide characteristics and requirements by allowing derogations to the obligation to provide training or education by national collective agreements. The possibility of concluding local agreements on the above-mentioned training or education is also provided for by the law.

Furthermore, the employer normally employing at least thirty persons is obliged to provide occupational health care to the above-mentioned dismissed employees for six months from the termination of the working obligation onwards. The employer is no longer obligated to provide the occupational health care if the employee concludes a new employment contract with another employer, provided that the new employment contract is valid indefinitely or lasts at least six months if made for a fixed term. The employee must notify the employer about the conclusion of a new employment contract due to which he or she will belong to the occupational health care provided by the new employer.

Amendments to the Co-operation Act

The scope of application of the Co-operation Act is extended to branches of foreign corporations that normally employ at least twenty persons. Moreover, an employer that normally employs at least thirty persons must negotiate the organizing principles of training or education conducive to employment that is to be provided for those employees who were dismissed on financial and production-related grounds. These negotiations must be carried out in conformity with the provisions set out in chapter 4 of the Co-operation Act. The principles regarding said training or education must also be included in the workplace’s personnel and training plan.

Evaluating the need for changes regarding the Working Hours Act and Annual Holidays Act

The objective of the working group set by the Finnish Ministry of Economic Affairs and Employment on 28 June 2016 is to prepare a proposal for a new Working Hours Act by the end of June 2017. The need for changes related to the Annual Holidays Act shall be reviewed afterwards. The working group is scheduled to finish its review on the Annual Holidays Act by the end of June 2018.

Have you already prepared your equality plan?

The Finnish Non-Discrimination Act, which entered into force on 1 January 2015, provides that an employer who regularly employs at least thirty persons must have a plan for the necessary measures for the promotion of equality. The equality plan must be in place as of 1 January 2017.

There is no set form for the equality plan, but it must be available for verification and inspection. The plan may be a separate document, or it can be included within another plan required for the workplace, such as the occupational safety and health policy, personnel plan or the gender equality plan. The measures for the promotion of equality and their effectiveness must be discussed with the personnel or their representatives. However, an employer is responsible for the preparation of the plan.