Temporary Amendments to Employment Legislation Due to the Coronavirus – New Government Bill Published on 26 March 2020

Author: Marta Kauppinen

Following our last employment blog post written by my colleague Susanna Hernberg, the new government bill prepared by the Ministry of Economic Affairs and Employment of Finland including the proposals of the central Finnish labour market organisations (a.k.a the “crisis package”) was published on 26 March 2020.

The bill includes temporary amendments to the Finnish employment legislation intended to provide increased flexibility for companies struggling with the financial impact of coronavirus on companies operating in Finland. The amendments are expected to enter into force on 1 April 2020, and they will remain in force until 30 June 2020. The contents of the government bill are largely identical to the proposals listed in our last employment blog post. The main amendments are listed below as a recap.

Some unions have already temporarily agreed on time periods shorter than those introduced in the temporary legislation. Moreover, some unions have agreed to temporarily amend the time periods set forth in the collective agreements in order to bring them in line with the provisions of the upcoming amended legislation, while others are currently preparing the same. The intention is to avoid situations where collective agreements referring to the current time periods applied based on the normally applicable legislation would restrain or delay companies’ possibilities to directly apply the reduced time periods introduced by the temporary legislation.

Temporary Amendments to the Employment Contracts Act

• Notification of temporary lay-offs reduced from 14 days to five days
  • Concerns temporary lay-offs executed during the validity of the temporary amendments
  • Will not affect shorter/longer notification periods already agreed on under collective agreements
• Possibility for employers to temporarily also lay off fixed-term employees
  • Under the same grounds as in the case of permanent employees
• Possibility to cancel an employment relationship with immediate effect during a trial period on financial and production-related grounds
• Employer’s re-employment obligation extended from four or six months to nine months
  • Concerns all redundancies effected during the validity of the temporary amendments irrespective of the duration of the employment relationship
  • Extended duration is also binding on transferees in transfers of undertakings
  • Will not affect shorter re-employment obligations agreed on under collective agreements

Temporary Amendments to the Act on Cooperation within Undertakings

• Reduction of minimum length of cooperation negotiations regarding temporary lay-offs reduced from 14 days or six weeks to five days
  • Will not affect minimum negotiation periods agreed on under collective agreements
• Illustrations of the time-saving effect of the temporary legislative amendments for companies normally employing at least 20 employees:

Temporary Amendments to the Unemployment Benefit Act

• Concerns unemployment benefits granted to individuals temporarily laid off from 16 March 2020 onwards
• Individuals who are granted unemployment benefit due to temporary lay-offs will not be required to look for work or to improve their capacity for entering or getting back into the job market as is currently required from unemployed jobseekers
• Individuals who are granted unemployment benefit due to temporary lay-offs will not be subject to qualifying periods, for instance, for turning down a job offer or for refusing a so-called re-employment plan drawn up by the local TE Office
  • Unemployment benefit would be granted automatically to unemployed jobseekers until the end of July 2020, after which the unemployed jobseeker’s status would need to be re-evaluated in order to continue their entitlement to unemployment benefit from 1 August 2020 onwards

A separate amendment to legislation is being prepared by the Finnish Ministry of Social Affairs and Health regarding, for instance, the removal of the qualifying period for the unemployment benefit and the amendments related to the statutory TyEL pension system. We will post a new update in our employment blog as soon as the new government bill is published.