Government continues work on measures to improve competitiveness
The Government continues to prepare measures geared to improve competitiveness in line with the earlier announced guidelines. It is necessary to restore a path of economic growth in order to reverse the rapid rise in general government indebtedness and to provide a sustainable basis for the funding of the welfare society.
After discussing the situation, the Government decided to replace the proposed Sunday and overtime pay cuts by cutting holiday bonus by 30 per cent. The peremptory nature of provisions will be adjusted by introducing three-year fixed-term legislation.
The Government aims to achieve a 5 per cent productivity leap through the following measures:
- Epiphany and Ascension Day will be changed into unpaid public holidays without reducing annual working time. If an employee does not work on those days, the equivalent hours can be worked at another time and compensation paid accordingly. In sectors that work every day of the week, Epiphany and Ascension Day no longer entitle Sunday pay but normal compensation will be paid for those days.
- Provisions regarding pay during illness are to be amended so that the first day is unpaid and 80 per cent of pay will be paid for days 2–9. Pay during the following sick days will be paid according to the applicable collective agreement.
- The maximum holiday length will be six weeks. This means that the longest holidays will be shortened in the public sector and some industries in the private sector.
- A statutory right to holiday bonus will be provided by law. To target the measures equally, provisions will be issued to set a maximum holiday bonus to be paid in addition to holiday pay and holiday compensation. The holiday bonus would be around 30 per cent less that in most sectors now.
- The private employer’s social security contribution will be reduced by 1.72 percentage points. More details on the structure of financing, the schedule and possible staggering of the measures will be given in the context of the general government fiscal plan of the spring of 2016.
In addition to measures to boost competitiveness, the Government will improve workers’ change security and even out family leave costs. Change security will be enhanced in redundancies that take place for financial or production-related reasons.
- Workers of companies employing more than 20 people will be offered, alongside redundancy pay, the right to re-employment training, with a value at least equal to the company staff’s average monthly pay.
- Equal treatment and employment of young women will be promoted by equalising the costs arising to employers from family leave, with a lump sum of EUR 2,500.
- In a company employing more than 20 people, the employer must provide occupational health care services for a six-month period after redundancy.
The aim of the Government is that the peremptory nature of provisions that concern the measures now proposed would be in force for the duration of three years through fixed-term legislation.
"The key is to create jobs and thus strengthen the Finnish general government finances", Prime Minister Juha Sipilä said.
He reminded that in many EU member states unemployment decreases but in Finland it rises.
"This negative trend can be turned, as long as bold decisions are made and swiftly implemented", Sipilä said.
The Government submitted a statement on measures to improve cost-competitiveness on 28 September 2015. The statement will be discussed by Parliament on Wednesday 30 September 2015.
Government statement on measures to improve cost-competitiveness on 28 September 2015 (in Finnish)
Inquiries: Riina Nevamäki, Special Adviser to the Prime Minister (Political Affairs), tel. +358 40 705 2593 and Markus Lahtinen, Special Adviser to the Prime Minister (Economic Policy Affairs), tel. +358 295 160 404, Prime Minister's Office and Juha Majanen, Deputy Director General of the Budget Department, tel. +358 295 530 247, Ministry of Finance
English translation of the press release published on 29 September 2015