Insights | March 31, 2020

Changes to the Finnish labor legislation on 1 April 2020

The Finnish parliament has on 30 March 2020 approved the Finnish government proposals concerning temporary changes to the labor and unemployment benefits legislation. The new legislation has been verified by the President of the Republic of Finland on 31 March 2020.

The following temporary changes will come into force on 1 April 2020:

Labor legislation

Shortening of the lay-off notification period to 5 days (from 14 days).

  • Shortening of the minimum co-operation negotiation period regarding lay-offs to 5 days (instead of the current 14 days or 6-week period).
  • Fixed-term employees can also be laid off (following the same rules that apply to employment contracts valid indefinitely).
  • Employment contracts can be terminated with immediate effect on financial and production-related grounds during the probationary period.
  • Obligation to re-hire employees made redundant on financial and production-related grounds is extended to 9 months (if the termination has occurred when the changes to labor legislation due to the coronavirus situation are in effect).

These changes only apply to the private sector and are meant to be in force until 30 June 2020.

Despite the legislative changes, some collective bargaining agreements may contain provisions that differ from the legislation. Before adapting these legislative changes, one should first review the applicable collective bargaining agreement.

Unemployment benefits

The changes to unemployment benefits are intended to enter into force on 1 April 2020 and will remain in force until 31 July 2020. The changes would apply to lay-offs beginning on or after 16 March 2020. Laid off employees would be entitled to unemployment benefits regardless of, among other things, possible student or part-time entrepreneur status. However, those laid off would retain the obligation under the Unemployment Security Act to accept employment offered by the employer.

Further changes regarding unemployment benefits legislation are to be drafted by the Finnish Ministry of Social Affairs and Health. We will keep you updated on this issue.