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Frequently asked questions from companies in Finland during COVID-19

 

1. We have to lay off temporarily our employees in Finland. What is the process?

support.svgThe process is depending on the number of employees you have in Finland. If you have at least 20 employees, then you have to follow provisions of the Act of Co-operation within Undertaking (similar to Swedish Medbästämmande lag) and Employment Contracts Act. In practice this means that you have to give an invitation to negotiations 5 calendar days before negotiations to employees. Then negotiations take place for a period of 5 calendar days. After negotiations you can give employees lay off notices.

But if you employ less than 20 employees you need to follow only the Employment Contracts Act. This process is much simpler. The employer must explain the situation to employees (this can be quite an informal meeting) and then give them  lay off notices.

2. Is Finnish Government providing any financial assistance to companies during the COVID-19 crises?

support.svgThe Government does not provide straight financial support. But there are possibilities to negotiate about tax paying and have loans.

3. An employer may lay off employees with a simpler process than usually between 1st April and 30th June 2020. Can the employer terminate employments easier than before also?

support.svgThe employer may not terminate employment contracts differently than before. Lay-offs are regulated temporarily in a different way than legislation usually demands. But that does not affect termination of employment which must be handled by the original legislation.

4. An employer does not need to lay off employees full time; the lay-offs can also be part-time. But is the employer entitled to decide how much working hours are reduced?

support.svgThe employer may decide how much working hours are reduced. And also the employer may decide how new working hours are used. New working hours might mean that an employee works 3 - 4 full days per week or that the employee works 5 days per week but shorter days.

The employees are entitled to unemployment allowances in part-time lay-offs, if the working time does not exceed 80% of the full-time work applicable in the sector.

5. We have laid off employees for a period of 90 days. This period will end at the end of June. What do we do then?

support.svgIn a best situation lay-offs just end and employees can get back to work. But if this is not possible the employer may decide whether to continue lay-offs or even terminate some employment contracts. In both situations the employer must follow provisions of the Employment Contracts Act and if the employer has at least 20 employees in Finland, then also Co-operation legislation. There are certain timetables and processes that must be followed.

6. Can the employee terminate the employment contract during the lay-off?

support.svgYes. During a lay-off, employees are entitled to terminate their employment contract without a notice period regardless of its duration. If the date when the lay-off ends is known by the employee, this right shall not apply for seven days preceding the end of the lay-off period. 

7. Is the employee entitled to work with another employer during the lay-off?

support.svgYes. However, the second job must not be a competitive activity with the employer, as the prohibition of competitive activity also applies during the lay-off. An employee may not disclose the employer's business or professional secrets during the lay-off.

8. Can the employees have their annual holidays during the lay-offs?

support.svgYes. The annual holiday can be taken also during the lay-offs. During the holiday, the employer pays holiday pay and the employee is not entitled to the unemployment allowance.

Also during this corona pandemic the employer must comply with the normal provisions of the Annual Holidays Act / Collective Bargaining Agreement.

According to the law, summer leave (first 24 days of the leave) must be given during the summer holiday period (between 2 May and 30 September) unless otherwise agreed. The employer must notify the employees of the holidays no later than one month before the start of the holiday. If this is not possible, at least two weeks before the start.

Before determining the date of the leave, the employer must give the employee the opportunity to express his or her views on the date.

9. Does the annual holiday accrue during the lay-off?

support.svgFull-time layoff: An employee earns annual holiday on days when he or she is prevented from doing his or her work due to lay-offs, but for a maximum of 30 working days.

Part-time lay-off (e.g. by shortening the working week): Annual holiday accrues from the days on which the employee is prevented from performing his or her work, up to a maximum of six months at a time.

Please contact us for further information

Katriina Huhtala

Katriina Huhtala 
Senior Legal Advisor
+358 50 597 5066
katriina.huhtala@azets.com

Mika Pahlsten

Mika Pahlsten 
Senior Legal Advisor
+358 50 325 7275
mika.pahlsten@azets.com