Notice period for lay-offs and the duration of co-operation negotiations will be temporarily shortened

The amendments to the Employment Contracts Act, the Seafarers’ Employment Contracts Act and the Act on Co-operation within Undertakings will be in force from 1 April to 30 June 2020. The aim is to allow employers to adapt their activities more quickly in a situation where the coronavirus epidemic has suddenly and dramatically weakened the demand for products and services.

Finnish Parliament approved the Government proposal regarding the amendments on 30 March 2020. The President approved the amendments on 31 March 2020.

Temporary changes affecting companies and employees

• The notice period for lay-offs is shortened: employers will be required to inform employees of the lay-off no later than five days before the lay-off begins.
• The duration of co-operation negotiations on lay-offs is shortened: the duration of the negotiations will be at least five days.
• Employees on a fixed-term contract may be laid off: employers will have the right to lay off an employee in a fixed-term employment relationship under the same conditions as an employee with an employment contract of unspecified duration.
• Termination of employment during trial period permitted: the employer may terminate the employment contract during the trial period for financial or production-related reasons.
• Employee re-employment obligation extended: the employer will be obligated, for a period of nine months, to re-employ those employees who were dismissed for financial or production-related reasons between 1 April and 30 June.

To the extent that the national collective agreement provides for minimum negotiation periods that are longer or shorter than five days, the negotiation and lay-off notice periods laid down in the collective agreement shall apply. The same applies to the provisions of collective agreements on re-employment obligation. The changes that reflect the new, temporary provisions, have already been made to about 90 per cent of the collective agreements.

The shorter notice periods for lay-offs will affect the livelihoods of wage and salary earners. The Ministry of Social Affairs and Health is currently preparing a government proposal to safeguard the livelihoods of employees during lay-off, among other things. More information on the submission of the proposal will be provided separately. In addition, a temporary amendment to the Unemployment Security Act will enter into force on 1 April 2020 that will extend employees’ right to unemployment benefit during lay-off. Those laid off will be entitled to unemployment benefit even if they are engaged in business activities or studies.

Inquiries:
Tarja Kröger, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 504 8937
Nico Steiner, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 504 9001