Erosion of working conditions

A radical change is coming in terms and conditions of employment. The first Government measure will seek to reduce the status of workers’ representatives.

No wages for the first day of sick leave

Government Programme entry

Sick pay will be amended to classify the first day of absence due to illness as a waiting day for which the employer would have no duty to pay wages unless otherwise stipulated in the collective agreement or employment contract. The waiting day would not apply to sick leave periods of five days or longer, or to cases in which the incapacity to work is due to a work-related accident or occupational disease.

Current practice

There is no legislation governing sick leave waiting days. Several collective agreements stipulate that wages are paid from the first day of illness. All benefits are renegotiated when revising a collective agreement, meaning that such clauses may also be dropped. The statutory minimum would then apply when the collective agreement no longer governs this issue.

Impact

  1. The first day of sick leave will be unpaid in future unless the collective agreement or individual employment contract specifies otherwise. This may encourage sick employees to come to work, thereby infecting their colleagues and others at the workplace. This poses a particular risk in sectors where employees work with people who are ill or elderly. Many people also suffer from recurrent short-term ailments, such as migraine. Working through a migraine can even pose a safety risk.
  2. The new law will treat people in an inequitable way. Industries organised by SAK-affiliated trade unions in particular provide fewer opportunities to work remotely. Individuals cannot work from home in these sectors, for example during an epidemic of a highly contagious disease such as the common cold.

"Relevant grounds" related to the individual employee will suffice for dismissal

Government Programme entry

Provisions governing individual dismissal will be modified to make relevant grounds related to the individual sufficient for terminating an employment contract.

Current practice

An employer may only terminate an employment contract on serious and relevant grounds arising from or related to the individual employee. The grievances of small businesses concerning difficulties in terminating employment were already addressed in an amendment to the Employment Contracts Act that took effect in July 2019. This amendment incorporated a provision on comprehensive assessment, enabling consideration of the number of employees in the employer's service and the overall circumstances of the employer and the employee when assessing the relevance and seriousness of the grounds for terminating employment.

Impact

  1. The amendment will lower the threshold for dismissal, making individual termination easier in practice.
  2. This is a loss of job security from the employee's perspective. It may discourage employees from calling attention to problems at the workplace, for example.
  3. An employee who has been dismissed on individual grounds is deemed to have caused the termination of employment, and is accordingly sanctioned with a waiting period on eligibility for unemployment benefit. The significant cuts in unemployment and other social welfare benefit included in the Government Programme exacerbate the impact of reduced job security on employees.
  4. The alleged employment-boosting impacts of this reduction are questionable, to say the least. Instead of promoting employment, deteriorating job security may increase the psychosocial demands of working, which has been found to impair productivity.

Special grounds will only be required for temporary employment when the job lasts for longer than one year

Government Programme entry

The current provisions of the Employment Contracts Act governing temporary employment contracts will be amended to enable conclusion of an employment contract for a fixed term of one year with no special grounds. Legislation will also ensure that the amendment does not enlarge the unfounded use of successive temporary employment contracts.

Current practice

Temporary employment may currently only be entered into on justified grounds. No temporary employment contract may be concluded when the need for labour is permanent. Employment contracts concluded with long-term unemployed workers form an exception to this rule.

Impact

  1. Use of temporary employment will probably increase. This will in turn increase the uncertainty experienced by employees and fragmentation in working careers.
  2. Unlawful use of successive employment contracts is already prohibited, but supervision of this ban remains extremely difficult.
  3. An increase in temporary employment may increasingly impair the ability of employees to accrue and take annual leave. Employees enjoy a statutory entitlement to 2.5 days of annual leave for each full leave-earning month. This entitlement is reduced to two weekdays per month if uninterrupted employment has continued for less than one year by the end of the leave-earning year. Employees who are continually hired for limited periods may never qualify for leave at the higher rate of 2.5 days per leave-earning month. This means in practice that employees may pursue quite long working careers without ever enjoying the increased rate of holiday accrual.
  4. A temporary employee is not free to resign in the same way as a permanent employee, even on securing permanent employment elsewhere. These employees are locked into their employment for a specified period unless otherwise stipulated in the employment contract.
  5. Temporary employment is most common among young and female employees. Young women in particular do a great deal of temporary work. They also suffer substantial discrimination due to pregnancy and family leave. Failure to continue temporary employment is one of the most typical features of discrimination cases involving pregnancy and family leave. Any increase in temporary employment may tend to boost discrimination in practice.

Shorter notice required for temporary layoffs

Government Programme entry 1

The minimum restructuring negotiation periods under the Act on Cooperation within Undertakings will be halved.

Current practice

The Act on Cooperation within Undertakings stipulates minimum restructuring negotiation periods of 6 weeks or 14 days, depending on the size of the enterprise, the number of employees affected by a proposed restructuring, and the duration of any layoff.

Impact

  1. Halving the periods for restructuring negotiation means that the new periods will be 3 weeks or 7 days. This effectively gives employee representatives as little as one week to study the proposed reductions, discuss them with the staff, and formulate a common position.
  2. The amendment will fundamentally limit the ability of employees to submit their own views on alternative solutions, for example when an employer is threatening redundancies.
  3. The amendment will probably increase the number of industrial disputes, as there would not be enough time to clarify procedures and justifications.

Government Programme entry 2

The Government will increase the threshold for applying the Act on Cooperation within Undertakings to the level permitted under EU provisions.

Current practice

The Act on Cooperation within Undertakings applies to enterprises and organisations that regularly employ no fewer than 20 people.

Impact

  1. The Government claims that EU provisions allow an increase in the application threshold to 50 employees. This would exclude at least 200,000 employees from the scope of the Act on Cooperation within Undertakings.
  2. Businesses falling outside the scope of the Act are not required to comply with restructuring negotiation periods, provide access to information, arrange participation in developing workplace operations, provide protection against dismissal, or observe general negotiating conditions.
  3. The amendment will remove the level competitive playing field for businesses and place employees in an inequitable position according to the size of the workplace.
  4. It will impair the ability of small and medium-sized workplaces to consult employees over labour deployment procedures, the skills requirements of staff, development prospects, and other issues that form part of statutory codetermination.

Businesses with fewer than 50 employees will have no duty to re-engage redundant workers when operations recover

Government Programme entry

The duty to re-engage an employee under the Employment Contracts Act will be abolished for enterprises and organisations that regularly employ fewer than 50 people. This provision will apply irrespective of any stipulation of a collective agreement.

Current practice

The duty to re-engage applies to employees who have been made redundant, or who have been dismissed in the context of a restructuring procedure.
An employer must offer work to a former employee who was made redundant if the employer subsequently needs new employees for the same or similar duties within a certain period. This duty to re-engage currently continues for four or six months, depending on the duration of employment. It does not depend on the size of the employer.

Impact

  1. The amendment will reduce the job security of employees in workplaces with fewer than 50 employees. It places employees in an inequitable position that depends on the size of their workplace.
    It will also limit the contractual autonomy of the parties to a collective agreement, meaning their ability to genuinely agree on the benefits and responsibilities of their members at work.

Workplaces with no shop steward allowed to agree local employment conditions that fall below the statutory standard

From the Government Programme

The Government will reform legislation to increase opportunities for local bargaining at company level. The Government’s vision is that local collective bargaining will be equally possible in all companies regardless of whether the company is a member of an employer association or what kind of employee representation system is in place at the company.

The Government will expand the conditions for local bargaining by removing from labour legislation bans on local bargaining in non-organised companies that comply with a generally applicable collective agreement. Labour legislation will be amended to allow a company-specific collective agreement to derogate, by agreement, from the same provisions of labour legislation from which a derogation is now only possible by means of a national collective agreement.

Current practice

Labour legislation fundamentally seeks to protect the weaker party in employment and impose a minimum standard of working conditions. Collective agreements specify the issues that are open to local collective bargaining and the negotiating parties. The minimum standards established in labour law may only be set aside under a collective agreement concluded by a trade union and a federation of employers. Only businesses organised in such a federation may conclude local agreements that set aside statutory minimum employment standards.

Impact

  1. The parties to a local agreement concluded with no shop steward will lack the necessary expertise and understanding of the content of the collective agreement and of labour law. Without the involvement of a trade union that is familiar with collective agreements and industry conditions, there is nobody to ensure that local agreements are balanced, or that they do not establish impaired standards on matters that should not be subject to local collective bargaining.
  2. A preference for non-organised businesses will reduce the interest of employers in joining a federation. The duty of an employers’ federation to monitor compliance with collective agreements only extends to affiliated businesses.
  3. Any preference for enterprise-specific and local collective bargaining will discourage employers from joining federations, with fewer national collective agreements concluded in future. A decline in national collective agreements will mean a corresponding reduction in universally binding collective agreements, with fewer and fewer employees covered by guaranteed minimum terms and conditions of employment.

Reduced powers of the national conciliator hamper settlement of industrial disputes

Government Programme entry

A provision will be included in the Act on Mediation in Labour Disputes preventing any settlement proposal issued by the Office of the National Conciliator or by a conciliation board from exceeding the general level of wage adjustments.

Current practice

The National Conciliator has no statutory obligation to comply with the general policy.

Impact

  1. The National Conciliator plays an integral role in the Finnish labour market system. Imposing statutory limits on the powers of the National Conciliator would break the system, rather than reinforcing it.
  2. The amendment will hamper the settlement of industrial disputes by limiting the powers of the National Conciliator. This may prolong such disputes.
  3. There is no way to reduce pay differentials between industries and occupations if the system rules out deviations of any kind. For example, the amendment would make it very difficult to reduce the wage gap between the sexes by awarding higher pay rises in low-wage sectors with a high proportion of female employees.
  4. Who decides the general policy? It cannot arise from a collective bargaining settlement awarded in any single industry, neither does any bundle of multiple collective agreements provide a workable solution. The cost impacts of collective agreements are also often open to interpretation. For example, the national conciliator currently relies on cost calculations made by employer organisations. No general policy can be determined solely on the basis of cost impact calculations made by the employers.