The Finnish labor market federations have together prepared a proposal for the national government in order to address the economic effects of the coronavirus epidemic endangering business conditions, employment and people’s livelihoods. The proposal concerns necessary actions contributing to cost savings in employment, flexibility of labor laws and improvements in the social security of unemployed or persons on temporary lay-off. The proposed solution is conditional on the adoption by the Finnish government.
Employer pension contributions will be temporarily decreased by 910 million euros
1. Employment pension contribution of a private sector employer
The employment pension contribution of employers is temporarily decreased by 2.6 percent. The decrease will be put into effect as soon as possible, by 1 June 2020 at the latest, and will be in force until 31 December 2020. This means that the employer pension contributions will be temporarily decreased by 910 million euros, in the aggregate, if the change is put into effect by 1 June 2020.
Employment pension insurance payments will be postponed
2. Employment pension payments will be postponed by three months
Employers and private sector pension insurance companies (including pension trusts and pension funds) will be encouraged to agree on the postponing of employment pension payments by three months.
3. Facilitation of employment pension re-borrowing
Finnvera will give securities required for the re-borrowing of pension funds in order to facilitate companies’ capability to pay employment pension insurance payments.
4. Pension insurance companies to refrain from bonuses
Pension insurance companies should refrain from customer bonus-payments during the time period when alleviations in pension insurance companies’ financial solidity rules and decreases in employers’ pension contributions are in place.
Temporary increases in labor law flexibility concerning the private sector will be made until 31 December 2020
5. Shorter minimum negotiation periods set in the Act on Co-operation within Undertakings
In regard of temporary lay-offs, the minimum negotiation periods in accordance with the Act on Co-operation within Undertakings will be reduced from the current 14 days or 6 weeks (as applicable) to 5 days.
6. Possibility to temporarily lay off employees with fixed-term contracts
The scope of temporary lay-offs would be extended to fixed-term employment contracts similarly as it applies to permanent employment contracts. Rights to unemployment security and the employee’s right to terminate the contract would be similarly extended.
7. Shorter minimum notification period for temporary lay-offs
The notification period in accordance with the Employment Contracts Act will be reduced from 14 days to 5 days.
8. Specifications to the possibility to temporarily lay off employees before the co-operation procedure is concluded
The central labor market organizations agree that the sudden and severe decline in the demand of products and services, and in consequence the need for temporary lay-offs, caused by the coronavirus epidemic constitutes exceptional circumstances within the meaning of Section 60 of the Act on Co-operation within Undertakings. The existence of such exceptional circumstances is assessed on a case-by-case basis and, when there are no more reasons to deviate from the customary co-operation obligations, the relevant procedures shall be commenced.
9. In exceptional circumstances the obligation to pay salaries transfers to the Finnish State
If working is prevented due to a public authority’s decision to suspense operations, the obligation to pay salaries ceases for the time of such suspension. This requires that the employee’s loss of income is reimbursed in full from the state’s funds (however, for no longer than 14 days).
In situations where working is prevented due to any other decision made by an authority or a school or a day-care center of a child under 12 being closed in order to prevent any further spread of a transmissible disease, the employee’s loss of income during the exceptional circumstance is reimbursed in full from the state’s funds.
10. Extension of right to terminate employment contracts during probation period
Employers are allowed to terminate employment contracts during the probation period based on production and economic reasons. In such situations a qualifying period of the unemployment security or waiting days will not apply.
11. Extension of obligation to re-employ
The employer’s obligation of re-employment of an employee is extended to 9 months, if the employee’s contract is terminated during the time period when the temporary amendments to employment legislation are in force.
Confirmation of subsistence security for temporarily laid off persons or the unemployed until 31 December 2020
12. Improvement of unemployment benefits
With these changes, the waiting days for unemployment benefits are removed and the maximum period of unemployment benefits will not be applicable during temporary lay-offs. These changes come into force retroactively starting from 16 March 2020. In addition, employees will have the right to daily unemployment allowance, even in situations where the temporary lay-off has been agreed upon.
13. Shortening the working requirement period
The working requirement period for the purposes of related benefits is shortened to 13 weeks for employment relationships that have begun after 1 January 2020 and that end on 31 December 2020 at the latest, if the working requirement is not otherwise fulfilled.
14. Employer’s obligation to inform about temporary laid-off employees
An employer, that has temporary laid off at least 10 employees, must report such lay-offs to the TE Office and the entity responsible for the payment of benefits. The employees that are mentioned in the report will be registered as unemployed job applicants. The unemployed applies for daily unemployment allowance from the benefit payer and the allowance is paid according to the temporary lay-off period that the employer has reported.
15. Guaranteeing the financing of temporary lay-off allowance
The Finnish State will participate in the financing of temporary lay-off allowances by supporting the earnings-based unemployment allowance until the end of 2020.
16. Guaranteeing the performance of unemployment funds and quick payment of benefits
The Finnish State is prepared to support the performance of unemployment funds during 2020 with an amount of 20 million euros.
SAK, “SAK:n hallitus hyväksyi työmarkkinoiden kriisipaketin”, 18.3.2020, https://www.sak.fi/ajankohtaista/uutiset/sakn-hallitus-hyvaksyi-tyomarkkinoiden-kriisipaketin
EK, “Työmarkkinajärjestöjen lista yritysten auttamiseksi koronakriisissä ’Askel oikeaan suuntaan, mutta lisää tekoja tarvitaan’”, 18.3.2020, https://ek.fi/ajankohtaista/uutiset/2020/03/18/tyomarkkinajarjestojen-lista-yritysten-auttamiseksi-koronakriisissa-askel-oikeaan-suuntaa-mutta-lisaa-tekoja-tarvitaan/