Significant amendments in the field of Finnish employment law

27 April 2017

Maisa Nikkola, Nora Jaari Hakola

Notifications related to dismissals on financial and production-related grounds will be removed

The objective of the incumbent government of Finland is to facilitate business by reducing companies' administrative burden. As such, notification duties pursuant to Chapter 9 sections 3(a) and (b) of the Finnish Employment Contracts Act will be removed from 1 May 2017, meaning that employers will no longer have a duty to notify the Employment and Economic Development Office of dismissals on financial or production-related grounds, nor will they be under an obligation to provide information to their employees on any employment plan. Such duties had been applicable if the employer had terminated the employment contracts of at least ten employees.

However, the employer shall still have a duty to notify the authorities in accordance with Section 48 of the Act on Co-operation within Undertakings.

Employer's right to claim compensation for costs arising from family leave

From 1 April 2017, amendments to the Health Insurance Act provide that the employer of a female employee is now entitled to a lump-sum compensation of EUR 2,500 for the costs arising from parenting and family leave. The amendments aim to promote women's equality in employment, but they also seek to divide the costs arising from parenting equally between the employer and the government.

The concept of employers' rights to compensation is new, with all compensation claimed from the Social Insurance Institution. The employer may be entitled to compensation if it has paid salary to the employee for at least one month during the maternity allowance period, or during the parental grant period for adoptive parents.In addition, the employment of the employee must have lasted for at least three months prior the beginning of maternity leave, and the employment contract must have been valid for at least a year. This minimum requirement of one year can also be fulfilled where the time period consists of two or several consecutive fixed-term contracts. The employer of part-time employees may also be entitled to compensation provided that the working hours of the employee were at least 80% of the working hours of a full-time employee in the field at the beginning of maternity leave. Employers have a right to compensation for each pregnancy or adoption.

The employer is entitled to lump-sum compensation if an employee's first day of maternity allowance period was 1 April 2017 or thereafter.

Notification on posted workers will provisionally become effective as of 1 September 2017

An employer's new duty to notify of posted workers will provisionally come into force as of 1 September 2017. The posting undertaking shall notify the occupational health and safety authority on the posting of workers to Finland before work commences there. The rest of the Act on Posting Workers is already in force, but section 7 of the Act concerning the notification comes into force later, to allow for changes in the data systems of the occupational safety and health authorities to be made in order for the section to become effective.

The exact time of entry into force has not yet been confirmed. Pursuant to the pending government proposal (HE 34/2017), it is estimated to be effective from 1 September 2017.

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