Recent changes to Finnish labour legislation due to COVID-19

By Nina Aura, Junior Associate, Aliant Finland

In addition to the Emergency Powers Act, The Finnish government has reacted to the situation by submitting several temporary changes to legislation. The amendments to the Employment Contracts Act, the Maritime Employment Contracts Act, and the Act on Co-operation in Enterprises are in force until 30 June 2020 (government bill HE 26/2020). Moreover, the amendments to the Unemployment Security Act are valid until 31 July 2020 (government bill HE 27/2020). Both of these government bills have been confirmed on 31 March 2020. However, the terms of collective agreements on layoff must be complied with despite changes in the law.

There have been no changes in the scope of the Co-operation Act. Consequently, a company with at least 20 regular employees must continue to hold co-operative negotiations before it can make decisions on measures that may lead to dismissal, layoff or transferring to part-time employment of one or more employees. Furthermore, there has been no change in the invitation period prior to the start of the co-operative negotiations. The employer must continue to submit a negotiation proposal for the start of the co-operative negotiations no later than five days before the start of the negotiations. However, the statutory minimum period was reduced to five days. Previously the period was 14 days or six weeks.

The reduction of the minimun negotiation period only applied in situations where the employer if considering only layoffs.

The employer must also continue to give the employee notice of layoff before the layoff begins. However, with the change, the statutory notice period was shortened to five days. Thus, the employer must notify the employee in person of the dismissal no later than five days before the start of the dismissal.

The government made significant temporary changes in the Unemployment Security Act to secure the livelihood of those who have been affected by the layoff of unemployment.

With the change, unemployed and laid-off persons can be paid unemployment benefit for the deductible period if the first day of the deductible is between March 16 and July 6. Usually, the deductible period is five working days.

The employment condition for earnings-related daily allowance and the basic daily allowance has been temporarily reduced from 26 weeks to 13 weeks. The reduced conditions of employment will apply from March 16 and will be applied to those, who have at least one week to be included in the employment condition after March 1, 2020.

Furthermore, it was decreed that if the layoff starts between March 16 and June 30, 2020, days during this period will not be taken into account for the maximum earning-related daily allowance of 300, 400, or 500 days.