Insight

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Supreme Court: Illegal Strike Organized Independently by the Employees Could Lead to Cancellation of Bonus
3 May 2016 According to a precedent judgement KKO 2016:12 issued by the Finnish Supreme Court on 3 March 2016, an employer may validly apply a bonus system condition according to which no bonus shall be paid to an employee who has participated in an illegal strike organized independently by a group of employees. Such condition may be applied only when the illegal strike has not been organized in cooperation with a labour union. In the case, the company's bonus system included a condition stating the annual bonus would not be paid in the event an employee participates in an illegal strike. A group of employees had organized a strike on 30 May 2010 and on 1–3 September 2010. Another group of employees had organized a four hour strike on 4 June 2010. The company had cancelled these employees' bonuses for 2010 due to the above industrial actions.According to the Supreme Court the company's decision was legal. The decision to cancel the bonuses was not considered discrimination on the basis of trade union activity as the strikes were not even considered trade union activity. The employees had made the decisions independently and without their union's cooperation. The cancellation was not considered an illegal indemnification. Instead, the cancellation was simply a result of the employees' failure to comply with one of the bonus payment preconditions. If the strikes would have been organized in cooperation with the employees' union, the company couldn't have cancelled the bonuses legally. This interpretation is based on an earlier Supreme Court precedent judgement KKO 2010:93. Even a Short Walkout of a Few Hours Could Cancel a Whole Year's Bonus A company may validly require that in exchange for an annual bonus, the employees must refrain from organizing illegal strikes.The Supreme Court's ruling allows cancellation of the bonus regardless of the duration of the illegal strike or the damages caused to the employer. The damages were not even taken into account as the Supreme Court considered the cancellation simply a result of one bonus precondition not being fulfilled. The ruling therefore enables the use of bonus system conditions aiming to prevent illegal industrial action taken without union support. Trade Union's Decision or Cooperation Protects an Employee from Personal Sanctions As a main rule, the labour union bares the responsibility for its own industrial action related decisions on behalf of the employees it represents. As a result, it is still forbidden to apply a bonus cancellation provision when the employees have taken industrial action initiated by their trade union. The sanctions of even illegal striking and other industrial action initiated by a union must be targeted at the union as the decision maker, not its individual member employees who have simply acted in accordance with their union's directions. The above rule is based on precedent judgment KKO 2010:93 submitted by the Finnish Supreme Court in 2010, where the Supreme Court considered it discriminatory to reduce the damages caused by an illegal strike from the same year's bonus accrual. The strike decision was made by the employees' union. A company may validly require that in exchange for an annual bonus, the employees must refrain from organizing illegal strikes. The high protection of trade union activity relates to actions where a union has been active in one way or the other, not to actions the employees have decided on their own. As a result, in the future the unions may be more likely to take the responsibility for illegal industrial action in the event the alternative is the cancellation of their member employees' bonuses. Remember the Following (i) Consider including a bonus entitlement precondition related to illegal industrial action but pay close attention to the wording of the provision. A broad interpretation of such provision may be considered discrimination even when it comes to taking illegal industrial action. (ii) Do not cancel the employees' bonus if their union has made the decision to initiate the industrial action or if it has been organized in cooperation with the union. In such event the correct object of sanctions is the union and the most likely sanction a compensatory fine as regulated in the Collective Labour Agreements Act (436/1946).
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I Am Being Bullied!
3 Nov 2015 A normal Monday morning at the office. Pekka is telling dirty jokes at the coffee table and his colleagues are laughing loudly. The only one not laughing is the new assistant Laura, who sits quietly to one side and does not seem to be enjoying Pekka's jokes. Later on in the afternoon Laura knocks on her boss' door. She closes the door and wants to talk in private. Laura feels that Pekka's behaviour is inappropriate and his jokes offensive. What should the boss and the company do? Harassment experiences are surprisingly common According to the latest Working Life Barometer (Työolobarometri) published by the Finnish Ministry of Employment and the Economy, 37% of employees sometimes experience harassment or mental violence at their workplace. The phenomenon is surprisingly common, and even superiors experience their share of it. “37% of employees sometimes experience harassment or mental violence at their workplace.” The employer has an obligation to ensure a safe working environment and must therefore intervene in cases of bullying. According to the Occupational Safety and Health Act (738/2002), the employer, after becoming aware of the harassment or other inappropriate treatment of an employee causing hazards or risks to the employee's health, must by available means take measures for remedying this situation. Once the employer has received notification of the harassment or other inappropriate treatment, there must be action. From a practical point of view, it is important to have sufficient procedures in place to make sure all superiors know their obligations to take action. Claims of inappropriate treatment are often presented in connection with litigation related to termination of employment. In Finland, it is also quite typical that the employer's passive approach leads to the employee presenting such allegations to the Regional State Administrative Agency which then initiates an investigation typically involving a number of questions and requests to the employer. Unsatisfactory answers and clarifications may lead to a criminal investigation, even regardless of whether the employee actually wants this. What is harassment? The Occupational Safety and Health Act (738/2002) does not define the terms "harassment" or "other inappropriate treatment". However, harassment is defined elsewhere in Finnish legislation. Harassment is defined by the new Non-discrimination Act (1325/2014), and the Act on Equality between Women and Men (609/1986) includes definitions on sexual harassment and gender-based harassment. However, it is not possible to create an exhaustive definition of harassment or other inappropriate treatment. The experience of harassment is always personal and it should not be disregarded even if it was not harassment or other inappropriate treatment. “The experience of harassment is always personal and it should not be disregarded.” Slight single actions are not normally considered as bullying. Neither are employer's measures and decisions which are based on the employer's right to supervise work. Elements of harassment or inappropriate treatment are, for example, underestimation, isolation, evasion, (non-verbal) inappropriate massages, discrimination, favouring, violation of reputation or status, criticism of personal characteristics and threatening behaviour. As outside counsels we have witnessed a broad spectrum of bullying allegations ranging from the superior giving non-ideal work tasks to claims of humiliating treatment by the superior. Always look into the matter In the event the employee has filed a request with the Regional State Administrative agency to investigate whether the employer has neglected its occupational safety obligations, it will be difficult to convince the investigating authorities if the employer can only say that there was no reason to investigate the matter since the employee had been overreacting. In comparison, if the employer is able to provide the investigating authority with even a brief memorandum listing the employer's actions and the matters that led to the conclusion that the employee was not being harassed, the employer's position is significantly better. Most importantly, any further time-consuming investigations may be avoided altogether if the employer takes the concern seriously. The initial investigation does not have to be in-depth. Even a simple form listing the actions performed as well as the conclusions, together with the reasons that led to those conclusions, will help in many cases. Failure to comply with the employer's obligation to act A failure to comply with the employer's obligations is a criminal offence and could lead to the representative of the employer being fined, or, in more extreme cases, even imprisonment. In addition, the employer could be sentenced to a corporate fine of EUR 850–850,000. Once the representative of the employer becomes aware of harassment or other inappropriate treatment, he/she should: begin to investigate immediately to discover what is going on discuss with the parties separately and jointly prohibit harassment and inappropriate treatment follow up the fulfilment of the agreed solutions remember to document the procedure in writing

Dittmar & Indrenius