New legislation regarding variable working time
On 4 May 2018 the Finnish Parliament approved new legislation concerning employment relationships where the working hours vary. As of 1 June 2018, those employment relationships that involve so-called zero-hour contracts (in Finnish nollatuntisopimus) or work performed on demand (in Finnish tarvittaessa töihin kutsuttava) will be governed by mandatory law. Until now, there has been no specific legislation on such arrangements.
The aim of the new law is to improve the position of the employees working irregular hours as well as to ensure that employment security works effectively. Below we discuss the main points of the new law and the obligations it sets for employers.
The new law will cover all working arrangements where the employee’s working hours vary between a certain minimum and maximum defined in the employment contract. It also covers situations where the employee commits to an on-demand work schedule.
The employer may no longer propose variable working time to the employee if the employer has a fixed need for the work in question. The minimum working time also may not be less than the employer’s real need for the work, unless otherwise requested by the employee.
If the actual working hours during the previous six months show that the agreed minimum working hours do not correspond to the employer’s real need for work, the employer must renegotiate the working hours clause at the employee’s request. The negotiations must be done within a reasonable time, approximately one or two weeks, and the employee is entitled to use support in these negotiations. If the parties do not agree on new working hours, the employer must provide a written justification for why the current working hours still meet the employer’s need for work.
Concerning employment contracts entered into before the new law comes into force (i.e., before 1 June 2018), these restrictions will also apply but only after a six-months transition period. If the agreed working hours clause does not comply with the new law, the employer must offer to change the terms to correspond to the employer’s actual need for work by the end of November 2018.
If the variable working time arrangement is agreed at the employer’s initiative, the employer must give the employee a written statement detailing in which situations and to what extent the employer will need labor. This obligation also applies to employment contracts entered into before 1 June 2018, and the employer must give the written statement to these employees by the end of November 2018. The written statement should, as a rule, be included in the employment contract for ease of reference, but may also be given separately.
An employee with a variable working time arrangement is entitled to sick leave if the incapacity falls on a day of the employee’s scheduled work shift or the work shift was otherwise agreed, or if circumstances clearly indicate that the employee, if able, would have been at work at that time.
If the employer reduces an employee’s variable working hours during the notice period from the average working hours for the past 12 weeks before the last work shift, the employee is entitled to compensation for loss of income. The employer’s obligation to compensate the employee does not apply if the employment has lasted less than one month before giving notice of termination of employment.
An employee with a variable working time arrangement can no longer give permanent consent to additional working hours, i.e., hours exceeding the minimum working hours agreed in the employment contract. The employee can validly consent to additional working hours only for each occasion separately or for a short period of time, e.g., for a peak period. If the employee has given permanent consent before the new law comes into force (i.e., before 1 June 2018), that consent is no longer valid and the above restrictions apply.
Regardless of the above, employees who have fixed working hours in a part-time employment contract can still validly give permanent consent to additional working hours.
If the employer wants to schedule additional working hours (i.e., hours exceeding the minimum agreed in the employment contract), the employer must consult the employee and take their perspective into account. The employer must set a deadline for receiving the employee’s response, but the deadline cannot be earlier than one week before the preparation of the work schedule.
These changes will require that employers assess and adjust current practices concerning variable working time staff. If you have any questions regarding the new legislation or need assistance, please contact us.