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Finland – What’s new in employment law in 2019

Written by
Dittmar & Indrenius, a leading Finnish law firm focused on creating exceptional added value to demanding corporate clients.
This article summarises the most important developments anticipated in Finnish employment law in 2019.

Working hours reform

The government proposal on a new Finnish Working Hours Act was submitted to parliament on 27 September 2018. The new Act would replace the current Working Hours Act dating from 1996. The aim of the reform is to create new tools for making local working hour arrangements and to meet the needs of present day working life. For instance, the proposed provisions would enable employers and employees to agree on working hours more flexibly, since the new Act would introduce a new working time arrangement for flexible work. The arrangement would be intended for specialist work where specific goals and overall timetables are more important than working during set hours. The new Act would also enable working hour ‘banks’ at all workplaces, allowing employees to ‘bank’ and combine hours worked, accrued leave or monetary benefits to be exchanged for leave. Currently, only certain collective agreements in Finland include provisions regarding working hour banks.

The reform is intended to enter into force on 1 January 2020. The reform will be one of the most substantial and important legislative changes in the field of employment law in the recent years and it will cause changes in many workplaces. In particular, the new Act will affect the working hour arrangements of employees working on specialist tasks. In addition, the Working Hours Act will affect employees working from home or otherwise outside the office. Many employers will also have to enter into agreements on flexible work with their specialist employees and to revise their practices related to working hours in general.


Proposal to simplify dismissals in small organisations

In October 2018 the government published a proposal to facilitate the dismissal of workers in small firms. Currently, the legal grounds for terminating the employment relationship are broadly similar for small and big employers. As a result of the reform, the size of the company will be one of the elements to consider when assessing whether the employer has proper and weighty reasons to terminate the employment relationship. The amendment would take into consideration the fact that small employers may have fewer resources to bear the consequences if an individual employee breaches or neglects his or her duties arising from the employment relationship. Therefore, the objective of the reform is to encourage small companies to hire permanent employees.

The proposal led to several political strikes during the autumn of 2018, with Finnish labour unions calling for strikes and overtime bans in response to the government’s plans. The content of the planned amendments has been confirmed by the parliament, but the amendments have not yet been ratified. The reform is intended to enter into force on 1 July 2019.

Employment Creation Premium

As of 1 January 2019, employers could be entitled to receive an employment creation premium of EUR 4,000 provided that the employer employs a long-term unemployed person or a person partly capable for work on wage subsidy. A wage subsidy is a subsidy granted by the employment and economic development office for promoting the employment of an unemployed jobseeker. It is granted to employers in order to cover costs arising from employing an unemployed jobseeker.

In order to receive the premium, the employment relationship of a long-term unemployed person or a person partly capable for work must be valid until further notice. Alternatively, the employer will be entitled to the employment creation premium if a fixed-term employment relationship is changed so it is valid until further notice during the payment period of the wage subsidy. The employee’s working hours must be over 80% of the maximum working hours applicable to a full-time employee working in the same industry.

The employer may apply for an employment creation premium from the local public employment and business services office within three months from the end of the calendar month during which a valid-until-further-notice employment agreement was concluded with the employee. However, the employment relationship must still be ongoing when the employer applies for the employment creation premium.

The employment creation premium arrangement is a temporary experiment in Finland. Employers can apply for the employment creation premium between 1 January 2019 and 30 June 2019.

Employees entitled to four weeks of annual holiday despite sickness absence

As a result of the amendments planned to the Finnish Annual Holidays Act, employees would be able to take additional holiday if they have earned less than 24 days of annual leave because of absence from work due to sickness or medical rehabilitation. The Government submitted its proposals to amend the Annual Holidays Act to Parliament on 1 November 2018.

The change relates to the implementation of EU legislation and it is expected to enter into force from 1 April 2019.

Minor amendments to Finnish National Legislation on Privacy in Working Life as a result of the GDPR

Despite the entry into force of the GDPR, the exceptionally strict Finnish national legislation on the protection of privacy in working life remains in force with minor changes. The Finnish Parliament is currently processing amendments to the Act on the Protection of Privacy in Working Life, which is the peculiar and important country-specific act governing employee data. This Act includes very strict provisions on, for example, employee monitoring, access to employee’s emails and background checks.

The changes are expected to enter into force during 2019. As a result of the reform, employers operating in Finland should review their policies and practices to ensure that they are in compliance with the GDPR and the amended Act on the Protection of Privacy in Working Life.

Seppo Havia
Partner - Finland
Dittmar & Indrenius
Iisa Koskela
Associate - Finland
Dittmar & Indrenius

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