Amendments to the employment legislation and collective agreements under preparation

D&I Alert

Posted on

23 Mar


Dittmar & Indrenius > Insight > Amendments to the employment legislation and collective agreements under preparation

Urgent legislative measures are currently under preparation for purposes of facilitating the position of the Finnish employers in adapting to the drastic changes in the market conditions in Finland during the last week in particular.

On 18 March 2020, the labour market parties published a list of concrete and substantial proposals for temporary legislation aimed at easing the situation for companies suffering from the impact of the COVID-19 crisis.

The Finnish government has just showed green light to most of the proposed changes in the applicable employment legislation, including the following:

  • Shortening the minimum co-operation consultation period regarding layoffs to five days (currently 14 days or 6 weeks);
  • Shortening the lay-off notice period to five days (currently 14 days);
  • Allowing employers to lay off fixed-term employees;
  • Acknowledging that the need to lay off a substantial part of the company’s personnel caused by a severe and sudden drop in the demand for products or services meets the criteria for carrying out lay-offs without preceding cooperation consultations in accordance with section 60 of the Act on Co-operation within Undertakings. The consultation obligation should still be met afterwards, as soon as practically possible;
  • Facilitating agreements on temporary lay-offs by entitling employees who have agreed on a temporary lay-off to unemployment benefits;
  • Allowing termination of employment for financial and production-related reasons during a probationary period (currently permitted only on individual grounds);
  • Extending the re-employment obligation period to nine months (current four or six months) following the expiry of the employment relationship.

The period of validity of these temporary measures would be three months.

In addition, the proposals govern the improvement of the laid-off employees’ income security and certain social security related changes. For instance, the government intends to reduce the employer’s pension contributions by 2.6 percentage points from 1 June, at the latest, to 31 December 2020. It is also proposed that the employers would have a right to request a deferral for TyEL insurance payments for a period of three months. Payment of TyEL-contributions by TyEL-relending would also be facilitated.

We understand that the enactment of the temporary legislation would be possible in a very short timeframe, possibly even within a couple of weeks.

Amendments to collective agreements

During the last few days, the labour market parties have also started concluding temporary collective agreements deviating from the provisions of the collective agreements currently in force with the aim of supporting the employers in these challenging circumstances. The agreements concluded so far contain provisions which are similar to the proposals of the labour market parties and the government but the specific contents of the agreements differ to certain extent.

Currently, these temporary collective agreements or provisions exist, amongst others, in the Commercial Sector, Car Trade business, Hospitality Sector, Facility Services Sector, Air Traffic Services as well as in the Technology Industries. We expect to see more of such agreements very shortly.

What next?

As a next step, we expect to see government proposals relating to the proposed legislative changes already later this week. We will continue monitoring these processes and keep you updated on any developments.

Share this