The new Finnish government under the leadership of Petteri Orpo, leader of the National Coalition Party, has announced wide-reaching measures which amount to the most ambitious reform of the Finnish labour market in decades. The measures, published recently after several weeks of negotiations and consultations since the parliamentary election earlier this year, are intended to be implemented during the Government’s four-year term in office. The purpose of the reforms is to boost the labour market participation rate, which in Finland has been lagging in comparison to other countries.
The planned reforms concern employment legislation, unemployment benefits and work permits for foreign employees.
We have collected here the most important changes to employment legislation the Government aims at introducing:
This is the most far-reaching and important item on the Government’s reform list, at least with regard to employment law. Currently, dismissal on individual grounds requires proper and weighty grounds. Case-law has set the bar high for satisfying that requirement. The Government wants to replace the current standard with a ‘proper reason’ justification. While it remains to be seen what the proposed standard will mean in practice, it seems clear that the Government intends to make it substantially easier to fire employees on individual grounds. The change would sweep existing case-law and legal doctrine on termination grounds into the history books.
Sympathy actions will be made subject to a proportionality rule which would allow only actions that are proportional to the objectives pursued and that are not directed outside the parties to the industrial dispute which the sympathy action aims to support. There will also be an obligation to notify sympathy measures. Political industrial actions will be permitted but are not allowed to last longer than one day.
In addition, sanctions for unlawful industrial action will be increased by raising the minimum fine to EUR 10,000 and the maximum to EUR 150,000. For the first time, an individual employee could be fined for continuing industrial action which has been ruled unlawful by the Labour Court.
The Government has now taken office, and it is expected that the preparatory work on the labour market reforms will start in the coming months. The reforms will be prepared in a tripartite process, but the new legislation will not be subject to the approval of the tripartite constituents.
Trade unions have already voiced their opposition to the Government’s plans. Some turbulence may lie ahead for the Finnish labour market, and this will play over the coming years. One thing is sure though: these are very interesting times for Finnish employment law.
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