Roschier Insights Seminar, key takeaways: Overview of current employment law topics
In a recent hybrid event, our experts Anu Waaralinna, Mari Mohsen and Jenna Helenius provided an overview of current topics in the Finnish employment market. In particular, the seminar focused on the key changes planned to the new Co-operation Act, recent case law and practical guidance based on them, as well as the Whistleblower Protection Directive and its specific impact on the workplace from an employment law perspective.
The new Co-operation Act
The new Co-operation Act, which enters into force in 1 January 2022, consists of the following three elements: (i) a continuous dialogue between the employer and the employees; (ii) negotiations in changing situations (change negotiations); and (iii) personnel representation in the management of the company. As was the case with the former Act, the new Act will apply to companies and organizations employing at least 20 people.
The new Co-operation Act introduces a new procedure for developing the relationship between the employer and employees in the long term (a continuous dialogue). According to the new Act, the employer and the employee representatives must have regular interaction on at least a quarterly basis, unless agreed otherwise. The continuous dialogue should address, among other things, the financial situation of the company or organization, workplace rules and practices, and employee issues. The practical ways of implementing the dialogue are to be agreed at the workplace.
In the new Act, the previously separated negotiation procedures based on Chapters 6 and 8 are combined in the same Chapter. In the future, the negotiation process will be referred to as “change negotiations”. However, there are no major substantive changes to the obligations imposed on the employer to consult with employees.
The continuous dialogue and change negotiations together form an interrelated continuum. Possible developments, such as the loss of a customer and its impact on the use of personnel, could be discussed during the continuous dialogue even before the change negotiations, which would improve the flow of information and the basis for the negotiations. The continuous dialogue would also play an important role in the further processing of changes after the change negotiations have ended.
Lastly, the new Act sets out some new criteria to be taken into account when determining the amount of the compensation payable by an employer for breaches of the Act. Consideration will be given, among other things, to the nature and extent of the breach, reprehensibility of the breach and the employer’s efforts to rectify its procedures. The purpose of this provision is to encourage the employer to correct any mistakes made in the co-operation procedures on its own initiative.
Practical guidance for employers based on recent case law
In the Supreme Court’s judgment in KKO 2021:17, it was stated that the compensation under the current Co-operation within Undertakings Act can also be imposed on an employer when in breach of the codetermination obligations in situations where the employees are not dismissed but instead only the essential terms of their employment are unilaterally changed. This was already the interpretation made by many legal scholars prior to the judgment despite the fact that the wording of the law was ambiguous in this regard. In the future, the interpretation adopted in this case will be directly stated in the new Co-operation Act.
In relation to granting extra benefits and similar practices beyond those required by statute, it is important for employers to take into account the risk of forming an established practice (FI: vakiintunut käytäntö). In its recent judgement in KKO 2021:76, the Supreme Court held that a rest break practice applied to certain workers had been formed as an established practice and, thus, the employer had no grounds to unilaterally remove the rest break practice despite the fact that the workload of those employees had decreased.
Based on this judgement, if there are practices in place in the workplace that are linked to certain conditions, it is recommended for the employer to change the practices as the situation changes; otherwise, there is a risk of an established practice being formed that may no longer be capable of being unilaterally altered by the employer, even though it was initially unilaterally provided.
In practice, it is often recommended for employers to exercise caution when considering terminating an employee on the grounds of the absence of the employee from the workplace for seven consequent working days (referred to as “dissolution of employment”, FI: työsuhteen purkautuneena pitäminen).
In a recent judgment (KKO 2021:66), the Supreme Court emphasized the employer’s duty of loyalty towards the employee in cases of absence. The case concerned a situation where the employee in question neither had fixed weekly working hours nor a fixed place of work. In these circumstances, the Supreme Court stated that, despite the employee’s absence from work for seven days, the employer should have at least tried to reach the employee before regarding the employment as dissolved. Thus, it is recommended that employers should strive to contact the employee before regarding the employment as dissolved. As the Supreme Court stated, this obligation is particularly important when it comes to employees working under so-called zero-hours contracts.
The Whistleblower Protection Directive and its impact on the workplace
In the seminar, our experts also discussed the Whistleblower Protection Directive’s specific impact on the workplace from an employment law perspective.
The aim of the new whistleblower legislation is to enhance the protection for whistleblowers in certain areas, such as public procurement, environmental protection and consumer protection. The Finnish act implementing the Whistleblower Protection Directive will not enter into force by 17 December 2021 as required, partly due to the extensive feedback received on the draft Government Bill. According to information from the Finnish Ministry of Justice, the Government Bill will not be issued before February 2022 and therefore it is difficult to estimate when the national act will enter into force.
For further information relating to the Whistleblower Protection Directive and its national implementation, please see our recent articles on the topic. Roschier will be holding a third seminar concerning whistleblowing at the beginning of 2022 once the Government Bill has been issued.