Insights | May 19, 2020

The temporary changes in labor legislation and unemployment benefits may be in force until 31 December

On 14 May 2020, the central organizations for employer and employee unions proposed to the Finnish government that the temporary changes in labor legislation and unemployment benefits remain in force until the end of 2020.

This proposal means that the notification period for lay-offs, as well as the consultation period, would continue to be five days. In addition, changes regarding unemployment benefits would also be in force until the end of the year. The Finnish government has not yet taken a position on the proposal.

The following temporary changes came 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 nine months (if the termination has occurred when the changes to labor legislation due to the covid-19 situation are in effect).

These changes only apply to the private sector and are currently 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

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. The changes to unemployment benefits legislation entered into force on 1 April 2020 and are currently intended to remain in force until 31 July 2020. The changes apply to lay-offs beginning on or after 16 March 2020.

Further amendments to the Unemployment Benefits Act were made on 15 April 2020. These include abolishing the five-day waiting period before a person is eligible for unemployment security and shortening of the requirement concerning the period of employment for wage-earners that is a condition for being eligible for unemployment allowance from 26 weeks to 13 weeks. In addition, unemployment allowances paid on the grounds of lay-offs would not be taken into account in calculating the maximum period of payment that applies to the unemployment allowance. The amendments are currently to remain in force until 6 July 2020.