Coronavirus, employment relationships and daily working life

D&I Quarterly Q1/2020

Posted on

26 Mar


D&I Quarterly

D&I Quarterly Q1/2020 brings together a selection of our experts’ articles published on our digital magazine Quarterly and here on D&I Insight.

For this Quarterly, we have put together the most current insight on the legal implications of the coronavirus outbreak. We hope that you will find these articles useful. Please be informed that all coronavirus –related articles will be regularly updated in our D&I Hub for COVID-19.

Dittmar & Indrenius > Insight > Coronavirus, employment relationships and daily working life

The coronavirus outbreak has taken the Finnish society and workplaces by storm. Our ways of working and daily routines have dramatically changed during just a week.

Business activities have already dramatically dropped, and such drop threatens many companies in the near future. Some of us work from home which puts our remote working facilities (and abilities) to the test. Most of us have had to adapt to new daily routines at the workplace and at home. It appears that we are approaching the new normal, at least for a couple of months.

Changes at the legislative level

On 18 March 2020, the labour market parties published a list of proposals for temporary legislation aimed at easing the situation for companies suffering from the corona crisis. The Finnish government has just shown the green light to most of the proposed changes.

The temporary changes are concrete and substantial. The proposals govern issues from postponement of TyEL-payments to improvement of laid-off employees’ income security. In addition, the proposals include the following measures, which appear to particularly interest our clients right now:

  • Shortening the minimum co-operation consultation period regarding layoffs to five days (currently 14 days or 6 weeks);
  • Shortening the layoff notice period to five days (currently 14 days);
  • Allowing employers to layoff fixed-term employees;
  • Acknowledging that the need to layoff a substantial part of the company’s personnel because of a severe and sudden drop in the demand for products or services meets the criteria for carrying-out temporary layoffs without preceding co-operation 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 practicably possible;
  • Allowing termination of employment for financial and production-related reasons during a probationary period (currently permitted only on individual grounds);
  • Facilitating agreements on temporary layoffs by entitling employees who have agreed on a temporary layoff to unemployment benefits;
  • Extending the re-employment obligation period to nine months (currently four or six months) following the expiry of the employment relationship;
  • Reducing employers’ pension contributions by 2.6 percentage points from 1 June, at the latest, to 31 December 2020.

These proposals are likely to lead to temporary legislation in a very short timeframe, possibly even within a couple of weeks. The period of validity of the temporary measures is three months.

Amendments to collective agreements

During the last couple of 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 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 deviate to some extent. Employers should primarily follow the provisions of the applicable collective agreements, if any, instead of the possibly deviating statutory rules.

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

Typical questions regarding the coronavirus and employment relations

During the last couple of weeks, our Employment, Benefits & Pensions practice has been very busy with questions related to the corona crisis. We have assisted our clients in adapting to the sudden changes in the market conditions, in determining the course of their HR-matters during the coming months and, of course, in understanding the relevant legal context.

Besides the more targeted questions, many of our clients request information on the general principles and legal rules which they should at least understand now. Therefore, we have collected the following list of fundamental matters which Finnish employers should at least take into consideration when contemplating what to do in these unexpected circumstances.

1. An employer is obliged to ensure workplace health and safety

As is evident, an employer has an obligation to take necessary measures to promote and ensure the employees’ health and safety at the workplace and when the employees are performing remote work. Besides an employer’s own preventive actions, this also means providing the personnel with appropriate instructions and information on how to act under different circumstances.

The exact contents of such policies depend on the workplace and the operations of the employer. Given the severity of the circumstances, hygiene and physical distance should be a priority for employers, to the extent practically possible. In addition, an employer’s instructions should govern other relevant practicalities, for instance, mandating that employees with any flu symptoms keep their distance from the workplace. Employers should also pay particular attention to the protection of high(er) risk employees.

The employer’s instructions should be based on the latest information available from the authorities and from the occupational healthcare service provider. As the authorities amend their instructions and recommendations constantly, also employers should closely follow the information available and implement changes to the applicable policies without delay.

2 Payment of salary

Voluntary measures taken by an employer do not affect the payment of salaries

Possible voluntary quarantines, closing down of facilities or corresponding measures limiting the employee’s ability to perform work do not affect an employer’s obligation to pay salary to the employees subject to such measures.

Normal sick leave rules apply

If an employee, an employee’s children or family members are infected by coronavirus, the general rules regarding sick leave, childcare leave and temporary leave for taking care of a family member apply.

As referred to above, given the severity of the situation, employers should also oblige everyone with even the slightest flu symptoms to stay away from the workplace until they are completely recovered. It is also recommended that employees be permitted to take sick leave for even up to nine days after the first day of sickness by notifying their sickness to their employer instead of being required to provide medical certificates. After this nine-day-period, a medical certificate is required for receiving sickness allowance from the state. The medical certificate can be obtained from a remote doctor’s appointment, for instance, or by phone.

An employee’s right to the specific sickness allowance for mandatory quarantines

If a doctor has ordered an employee and/or the employee’s child of less than 16 years old into quarantine, the employee is entitled to sickness allowance from the state (Fi: tartuntatautipäiväraha). The allowance compensates the employee’s lost earnings for the quarantine period. If the employer has paid the employee salary during the quarantine period, the allowance is paid to the employer.

If an employee presents a quarantine order to their employer, the employer is obliged to report the employee’s earnings to the Finnish Social Security Institution KELA for the payment of the allowance.

Nevertheless, if the employee is able to work remotely from home or on holiday, the employer is obliged to pay the employee his/her normal compensation and the employee does not have a right to the allowance.

Normal holiday rules apply

The corona crisis does not, as a starting point, impact an employee’s right to accrue and take holidays. Most of the employees take their agreed holidays during the ‘corona period’ normally. Other periods of annual holiday can also be given, applying the normal practices.

Employees are, however, entitled to postpone their holidays if they are on sick leave at the start of the holiday. If the sick leave starts during a period of annual leave, the right to postpone can be used after a waiting period of six days.

Holidays accrue normally for up to 75 working days when an employee is on sick leave. In cases where an employee’s right to annual holiday would be less than four weeks due to sickness absence, the employer has an obligation to offer complementing annual leave days so that the employee can take at least four weeks of annual holiday in a holiday year.

Absences for taking care of children when schools have been closed down

As a starting point, there are no specific rules governing a parent’s right to stay home to take care of their children who are not attending school or daycare. On the basis of the information currently available, such amendments to current legislation are not expected either.

Accordingly, an employee is entitled to take family leave as in normal circumstances. Absence for compelling family reasons may also be possible. In addition, the parties to an employment relationship may at any time agree on specific arrangements to facilitate the employee’s wishes and the government’s recommendation to stay at home with children even if the children would have a possibility to attend daycare, preschool or school.

3 Authorities deciding to close down an employer’s operations

If the authorities have closed down the operations of an employer, or operations in the employer’s area of business, or if the performance of work is otherwise impossible due to exceptional external circumstances (rather than the employer’s own decision or changes in the market conditions), the employer may be entitled to stop paying salaries to the employees after working has been impossible for a period of 14 days.

It should be noted that, except for employers whose operations have already been closed down or employers receiving compensation from business interruption insurance, the practical significance of this provision will be reduced after the expected changes in the employment legislation and applicable collective agreements regarding the shortening of layoff processes take effect.

4 Temporary layoffs

If an employer’s ability to offer work is temporarily reduced, for instance, due to the effects of coronavirus or indirect effects of the authorities’ related decisions, the employer may be entitled to temporarily lay off employees. In addition, layoffs may be used as an alternative to redundancies.

For employers employing more than 20 employees, a co-operation consultation procedure should precede layoffs. In addition, all employers are obliged to provide the employees with a prior notice of layoff.

As referred to above, it is expected that the minimum co-operation consultation period would be shortened to five days and the layoff notice period to five days. Assuming that these proposals will be enacted into legislation, employers could start layoffs after a period of altogether 15 days from the date of invitation to the co-operation consultations, unless the applicable collective agreement states otherwise. In the most severe cases, the employer could even implement the layoffs without a preceding co-operation consultation procedure. On the other hand, agreeing on layoffs with the employees is also possible.

As mentioned, we also expect to see changes in the applicable collective agreements providing similar possibilities during the coming days. These changes are likely to take effect immediately.

5 Privacy aspects

The coronavirus situation does not entitle employers to collect further data on the state of health of employees in comparison to normal circumstances, in which such rights are very limited. In practice, such data can be collected only to the extent mandatory to meet an employer’s statutory obligations. The data on an employee’s state of health should primarily be handled by the occupational health services provider and the health authorities, as applicable.

However, the exceptional circumstances at hand may also require processing of types of employee data other than health data. For instance, collecting information on whether an employee has travelled in countries considered epidemic areas, the fact that an employee is in quarantine or, e.g., information about who an employee has worked with before being placed under quarantine) is not covered by the restrictions related to health data. In addition, if an employee himself/ herself reports on possible exposure, this data can be recorded.

What next?

It is certain that during the next couple of months, we will see a number of changes in working life and the rules governing Finnish employment relationships. It is also certain that these rapid changes will trigger a number of novel legal and practical questions in the field of employment law.

As always, we will continue monitoring the legislative changes and guidelines published by the authorities to provide latest insight and information on the impacts of coronavirus to our distinguished clients – although from our home offices for the time being.

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