Global Employment Briefing: Finland, June 2017

• United Kingdom

• Employment law

01-06-2017

Recent changes to ease administrative and financial burdens on employers

An aim of the current Finnish government has been to ease the administrative burden of citizens and companies by abolishing unnecessary legislation and regulations. However, new measures have additionally sought to ease employers’ burdens in other respects also.

Notification of dismissal

With effect from 1 May 2017, amendments to the Finnish Employment Contracts Act (55/2001) aim to reduce employers’ notification and clarification obligations, smaller businesses in particular having struggled with the associated workload and administrative burdens of these provisions - especially those employing fewer than 20 employees.

The changes mean that employers are no longer obliged to notify the Employment and Economic Development Office of dismissals arising on the grounds of financial or production issues. Additional changes also mean that employers do not have to provide employees with information regarding the services of the Employment and Economic Development Office or to notify the Employment and Economic Development Office of redundancies.

However, obligations to notify the authorities of a business transfer which is likely to affect employment (as provided by the Act on Co-operation within Undertakings (334/2007), have not been amended and continue to apply to employers who regularly employ at least 20 persons and are subject to that Act.

New support for employers covering the cost of family leave

From 1 April 2017, employers are entitled to a lump-sum payment of 2.500 euros to cover for the costs of family leave. The amendment to the Health Insurance Act (1224/2004) is intended to promote the employment and equal treatment of women, as well as a more equal division of parenting costs between the employer and the government.

The compensation payment is payable in respect of leave taken for pregnancy or adoption on or after 1st April and is available to the employer from the Social Insurance Institution (KELA) within six months from the end of the parental allowance period.

The conditions for obtaining the compensation are as follows:

• maternity allowance or maternity grant must have been paid to the employee
• the employer must have paid salary to the employee for at least one month during the maternity allowance or maternity grant period
• the employment of the employee must have lasted for at least three months before the beginning of the maternity leave
• the employment contract must have been in place for at least a year, although two or more consecutive fixed-term contracts will fulfill this requirement if these together have lasted at least a year
• at the beginning of the maternity leave, the working hours of the employee must have been at least 80 % of the working hours of a full-time employee in the field