The COVID-19 outbreak: FAQ for employers and employees

Below you will find guidance regarding the coronavirus outbreak in Finland and Sweden from an employment law perspective. The information reflects the situation on 3 April in Finland and 18 March 2020 in Sweden.

Finland

The Finnish government has recommended that parents, who have the opportunity to keep their children at home instead of in daycare or school, do so. However, the public kindergartens and schools for grades 1-3 are open and therefore, a parent’s decision to care for his/her children at home is voluntary. An employer is not obliged to pay salary, unless the parent works remotely from home. It is highly recommended to organize remote working possibilities.

The situation is different if the child is actually sick and therefore cannot go to school or kindergarten. In these situations, parents have a right to be absent from work and the employer is obliged to pay salary in accordance with the employer’s policy or applicable collective bargaining agreement, typically 3-4 days.

Temporary lay-offs are possible on the same grounds as usual: the employer’s possibility to offer work has temporarily decreased and there is no other work or necessary training available to the employees (maximum lay-off period 90 days). The employer can also lay off employees for a longer period of time, when the company has grounds to permanently reduce workforce. Employee consultations (Fi: yhteistoimintaneuvottelut) are usually (see below for an exception) necessary, if the company employs at least 20 employees. Under new temporary COVID-19 legislation, the process takes 15 days, including the lay-off notification period. Please remember to check the applicable collective bargaining agreement – collective bargaining agreements contain provisions on the consultation and lay-off notification periods that may be different from the legislation.

If a company employs at least 20 employees, the employer is, as a rule, obliged to complete employee consultations before making decisions on redundancies or temporary lay-offs. According to the Act on Cooperation within Undertakings, the consultation obligation can be by-passed in extraordinary situations. This requires unforeseeable, especially substantial grounds that would cause loss or damage to the company’s financial situation, or production or service operations preventing consultations. However, consultations need to be commenced immediately when the grounds no longer exist.

Currently, the employer and employee associations have announced, and the government has agreed, that the coronavirus situation can be deemed to fulfill the above criteria in certain companies. It is, however, necessary to make an employer-specific assessment of the situation before deciding to delay the consultation.

In the current situation, due to the occupational health and safety requirements, the consultations can also be arranged by remote communication devices. However, it is important that, if the consultations are held remotely, they are still interactive (employees have a possibility to comment and ask questions) and that employees or their representatives have access to all the necessary information.

With the Finnish borders closed and the Uusimaa region isolated, traveling possibilities are certainly very limited at the moment. Business travel should be limited or totally prohibited, in accordance with the recommendation made by the Finnish Ministry of  Foreign Affairs. The employer is obliged to take care of employees’ health and safety during work travel as well. Therefore, all authorities’ instructions and guidelines should be closely followed when planning business travel, also domestic travel.

The employer cannot validly and absolutely prohibit its employees’ private travel. The employer can raise awareness of and refer to the authorities’ travel instructions and travel prohibitions as in force from time to time. The employer can, in certain circumstances after 12 March 2020, refuse to pay the employee his/her salary, if the employee himself/herself has caused illness or isolation or similar by travelling abroad.

Provided that an employee’s work duties are such that they can be performed remotely, the employer should instruct employees to work from home. Most of employees who are able to, already work from home. If work cannot be performed remotely, but the employee is prohibited from coming to work (although he/she could come to work), the employer must continue to pay salary during this time. If the employee has deliberately left Finland after 12 March 2020 for private travel, when official instructions begun to recommend not to travel anywhere, it may be possible not to pay salary for 14 days and prohibit the employee from coming to the office. Also, if the employee has been in deliberate contact with a COVID-19 patient during her/his free time, and thus, has acted against the employer’s clear instructions, the employer may refrain from paying salary, depending on the circumstances.

there is no obligation to pay salary.

Any request by an employer for an employee to be on vacation must in accordance with the rules set forth in the Annual Holidays Act and applicable collective bargaining agreement. It is not possible for the employer to place an employee on unpaid leave without the employee’s consent, unless the employee has deliberately caused his/her absence due to e.g. travelling against official instructions.

Different rules apply if isolation/quarantine restrictions imposed by authorities also affect the possibility to work.

The employee is naturally allowed to be absent due to isolation/quarantine restrictions or other compelling circumstances related to the coronavirus. For safety reasons, the employer should also prohibit the employee from coming to work if the employee is kept in quarantine. However, if the employee is not ill, the primary income for the employee is infectious disease daily allowance (Fi: tartuntatautipäiväraha). Please note that voluntary isolation or similar does not entitle an employee to infectious disease daily allowance.

If the employer pays salary during the period of absence, the employer may be entitled to the daily allowance instead of the employee. Remote work is also a possibility.

Employees accrue vacation days, if they are kept in quarantine due to authorities’ instructions.

Ill employees should stay at home. If the employee is ill, the employer has the right to prohibit him/her from coming to the office during the period of illness.  The general sick pay rules apply as long as the employee is sick.

The employee may be entitled to a special infectious disease daily allowance when absent from work due to the coronavirus (see above under question 7), pursuant to the Communicable Diseases Act (Fi. tartuntatautilaki).

If the employee is kept in quarantine after recovery, see the answer to question 7 above. If the employer does not wish an employee to come back to the office after having recovered from an illness but the employee is not kept in quarantine, then the answer to question 6 applies.

Yes. An employer is obliged to take necessary measures to take care of its employees’ health and safety at work. This includes, for example, assessing potential risks and hazards, as well as preventing and removing potential risks and hazards. Any initiatives taken by the authorities should be closely followed and may change the employer’s obligations.

Employers are currently recommended to give their employees clear instructions, for example concerning the following:

  1. how to prevent the disease spreading in the workplace;
  2. when and who to contact if you have symptoms or you have been in contact with a COVID-19 patient;
  3. contacts at the company in case of questions and contact details for occupational health care;
  4. sick leave notification practices;
  5. business travel instructions;
  6. remote working possibilities;
  7. instructions from relevant authorities;
  8. updating the instructions as the situation changes;
  9. instructions to follow the statements given by relevant authorities, including possible avoidance of travel (including private travel)

Sweden

According to a new proposal from the Swedish Government on 16 March 2020, employees can be temporarily laid off with reduced salaries, which will be financed by the state to a considerable extent. As the proposal was only recently introduced, many questions remain to be resolved. It is expected that more guidance will be given during the week to come, but the authorities recommend that employers start preparing now.

The proposal entails that employers’ salary costs can be reduced by 50 percent, and the central government will cover a larger share of the costs during 2020. The employees may receive more than 90 percent of their salary, but please note that the financial support is capped and only given for salaries amounting to a maximum of SEK 44,000/month. The short-term lay-off model can be applied from 16 March 2020 and is in effect throughout 2020. In order to obtain financial support, employers must apply to the Swedish Agency for Economic and Regional Growth (Sw. Tillväxtverket).

The system applies for companies that have suffered temporary financial difficulties due to force majeure, i.e., reasons beyond the employer’s control, which could not have been anticipated (such as pandemic viruses). Also, in order for the employer to be eligible, the employer must have taken other measures to reduce its labor costs (for example, by dismissing temporary employees not critical to the business). Further:

  • Companies bound by a collective bargaining agreement must be bound by both a central and local agreement that stipulates how the working hours are to be reduced. The Swedish National Mediation Office (Sw. Medlingsinstitutet) provides an up-to-date list of such collective bargaining agreements (for reference, please click here).
  • In the absence of a collective bargaining agreement, the company must enter into an agreement with at least 70 percent of the employees at the workplace regarding a reduction in working hours.

Government support for the proposed short-term lay-off system can be given for a maximum of six consecutive months. However, if the employer can show that the financial difficulties remain after six months, this period can be extended by an additional three months. The more generous subsidies are only valid during 2020 (not beyond this period).

Business travel can be limited or totally prohibited. The employer is obliged to take care of employees’ health and safety during work travel as well. Therefore, all authorities’ instructions and guidelines should be closely followed when planning business travel.

The employer cannot validly and absolutely prohibit its employees’ private travel. The employer can raise awareness of and refer to the authorities’ travel instructions and travel prohibitions as in force from time to time. With reference to the employees’ obligation to contribute to health and safety in the work environment, it is reasonable to ask the employees to limit their private travel, especially to restricted areas.

Currently, employers are instructed to consider whether they could implement remote working possibilities for employees returning from affected areas. Accordingly, the employee and the employer could agree that the employee work remotely for a certain period of time.

Any request by an employer for an employee to be on vacation must be in accordance with the rules set forth in the Swedish Annual Leave Act (Sw. Semesterlagen) and applicable collective bargaining agreement. In exceptional circumstances, it is possible for the employer to place an employee on annual leave without their consent. It is not possible to place employees on unpaid leave without the employee’s consent.

If it is not possible for the employee to work remotely due to the nature of the work, but the employer does not wish the employee to come to the office, the employer is entitled to release the employee from his/her work duties for a certain period of time (and prohibit him/her from coming to the office). In this case, the employer would be obliged to pay the employee his/her salary.

The employee is allowed to be absent due to isolation/quarantine restrictions or other compelling circumstances related to the coronavirus. For safety reasons, the employer should also prohibit the employee from coming to work if the employee is kept in quarantine. However, if the employee is not ill, the employer is not obliged to pay him/her salary. The employer can voluntarily pay salary in this kind of situation, if it so wishes. If this kind of policy is adopted, it is advisable to treat all employees equally.

An employee kept in quarantine may be entitled to an infectious disease daily allowance (Sw. smittbärarpenning) when absent from work.

Ill employees should stay at home. If the employee is ill, the employer has the right to prohibit him/her from coming to the office during the period of illness. The general sick pay rules apply for such time as the employee is sick. However, please note that the central government will pay the sick pay between sick day 1 and 14 during April and May.

The employee may be entitled to a special infectious disease daily allowance when absent from work due to the coronavirus (see above under question 3).

If the employee is kept in quarantine after recovery, see the answer to question 3 above. If the employer does not wish an employee to come back to the office after having recovered from an illness but the employee is not kept in quarantine, the employer may be entitled to release the employee from his/her work duties for a certain period of time (and prohibit him/her from coming to the office). However, for employees covered by the Swedish Employment Protection Act (Sw. lagen om anställningsskydd), this entitlement should be exercised with caution. Furthermore, please note that the employer would be obliged to pay the employee his/her salary during the period of leave (unless the new measure regarding temporary lay-offs is exercised).

Yes. An employer is obliged to take necessary measures to take care of its employees’ health and safety at work. This includes, for example, assessing potential risks and hazards, as well as preventing and removing potential risks and hazards. Any initiatives taken by the authorities should be closely followed and may change the employer’s obligations.

Employers are currently recommended to give their employees clear instructions, for example concerning the following:

  1. how to prevent the disease spreading in the workplace;
  2. when and who to contact if you have symptoms or are coming from an affected area;
  3. contacts at the company in case of questions and contact details for occupational health care;
  4. sick leave notification practices;
  5. business travel instructions;
  6. remote working possibilities;
  7. instructions from relevant authorities;
  8. updating the instructions as the situation changes;
  9. instructions to follow the statements given by relevant authorities, including possible avoidance of travel to identified countries/areas (including private travel)
  10. instructions to inform the employer of any private travel to restricted areas and areas in close proximity to restricted areas.

It is proposed that companies can defer payment of employers’ social security contributions (Sw. arbetsgivaravgifter), preliminary tax on salaries, and VAT that are reported monthly or quarterly. This tax relief covers tax payments for three months and is granted for up to 12 months. The application can be made on 7 April 2020 at the earliest, but can be applied retroactively as from 1 January 2020. Please note, however, that the yearly cost for deferring such payment will be approximately 6 percent of the total amount.

Author

Anu Waaralinna 
Partner
Helsinki
Leenamaija Heinonen 
Senior Associate
Helsinki
Mari Mohsen 
Senior Associate
Helsinki
Elin Osbeck 
Associate
Stockholm