The Employment Contracts Act and the Act on Co-operation within Undertakings have been temporarily amended due to the crisis inflicted by the novel corona virus pandemic. The amendments enter into force on 1 April 2020 and remain in force until 31 December 2020.
The Finnish Hospitality Association MaRa and Service Union United PAM have already before agreed on certain temporary changes to the collective agreements. These guidelines consider both the changes in legislation and the changes to the collective agreements.
1. Fixed-term employment contract and lay-off (Employment Contracts Act)
A fixed-term employee can also be laid-off in a similar manner as an employee whose employment contract is valid until further notice.
Laying-off a fixed-term employee is possible irrespective of the term of the contract or the reasons used for entering a fixed-term contract.
Laying-off a fixed-term employee does not require any specific clause in the contract as it is applicable directly by law.
Lay-off of a fixed-term employee may continue also after 31 December 2020 if the lay-off has begun before 31 December 2020.
2. Cancellation of employment contract during trial period due to financial or production-related reasons (Employment Contracts Act)
The Employment Contracts Act was temporarily amended to exceptionally allow cancellation of employment contracts during trial period also due to financial or production related reasons attributable to the operation of the employer as prescribed in Chapter 7 Section 3 of the Employment Contracts Act.
Previously, cancellation during trial period was only possible due to reasons attributable to the employee or the employee’s work performance. The amendment does not affect these kinds of situations. Cancellations during trial period due to these kinds of reasons are still possible and the bases for cancellation remain unaffected.
The bases for cancellation of employment contract during trial period due to financial or production-related reasons (hereinafter also “trial period cancellation due to financial reasons”) are evaluated in a similar manner as the bases for giving notice due to financial or production related reasons:
- the work to be offered must have diminished substantially and permanently for financial or production-related reasons or for reasons arising from reorganisation of the employer's operations
- before executing a trial period cancellation due to financial reasons, the employer has to investigate whether the termination of employment can be avoided by placing the employee in other duties or training the employee for other duties as provided in Chapter 7 Section 4 of the Employment Contracts Act. If such is possible, the employer must offer these other duties or training to the employee as an alternative to the termination of employment
- a trial period cancellation due to financial reasons is not possible if the employer has either before termination or thereafter employed a new employee for similar duties even though the employer's operating conditions have not changed during the equivalent period
- the trial period cancellation due to financial reasons can be executed at the earliest on the day of the agreed or intended commencement of work.
In practice, the only difference between a trial period cancellation due to financial reasons and giving notice due to the same reasons is that in cases of trail period cancellation the employment ends without a notice period. The employment relationship ends at the end of the day.
The amendment does not affect the length of the trial period or the prerequisites for agreeing about a trial period. The maximum length of trial period is determined by the applicable collective agreement.
3. Derogation from the deadlines stipulated in chapter 8 of the Act on Co-operation within Undertakings
1. The negotiation proposal may be issued no later than three days before the negotiations begin. This time limit applies, however, only to employees and supervisors that fall under the scope of application of the collective agreements negotiated by MaRa. For employees, such as higher clerical employees, who do not fall under the scope of application of the collective agreements, the time limit is five days.
Example. If a negotiation proposal is issued on 1 April, the first negotiation may be held no earlier than 4 April.
2. The minimum negotiation period is five days if the employer is considering lay-offs.
Example. If the first negotiation is held on 4 April, the negotiations may end no earlier than 8 April unless a shorter period is agreed during the negotiations.
During the negotiations the parties may reach an agreement to shorten the negotiation period and agree about the fulfilment of the obligation to negotiate before the law-bound negotiation period has lapsed.
The duration of the intended lay-off is irrelevant to the application of the new reduced negotiation period. Thus, the lay-off may also last more than 90 days and still be subject to the minimum five-day negotiation period.
The amendment applies only to lay-offs. If the potential actions include transitions to part-time work or redundancy, the negotiation periods of 14 days or six weeks shall apply (depending on the amount of employed personnel and/or the number of targeted employees) as stated in the Act on Co-operation within Undertakings. However, also in these situations the parties may agree on a shorter period during the negotiations.
The aforementioned changes do not entitle the parties to derogate from the provisions or procedures stipulated in the Act on Co-operation within Undertakings in any other regard.
If the negotiations have begun during the period of validity of the temporary laws, the minimum five-day negotiation period may be applied even though the negotiations would extend over 31.12.2020.
4. Notice period for lay-offs
The notice period for lay-offs is five days.
Example. If notice of lay-offs is issued on 9 April, the first day of lay-offs may be no earlier than 14 April.
If notices of lay-offs were issued during the period of validity of the temporary laws, the minimum five-day notice period may be applied even though the lay-offs would take effect only after 31.12.2020.
5. Extension of the obligation to re-employ (Employment Contracts Act)
According to the Employment contracts Act, the employer has an obligation to offer work to an employee whose employment contract has been terminated due to financial or production related reasons (i.e. obligation to re-employ). The obligation begins after the employment relationship has ended. The length of the obligation is determined by law. The obligation exists if the employer’s demand for labour increases in same or similar kinds of work that the employee used to do during the re-employment period.
The law-bound re-employment period is extended from four or six months to nine months, if the employment contract is terminated by giving notice during the period of validity of the temporary laws effected due to the novel corona virus.
The re-employment obligation concerns only employees whose employment contract has been terminate by way of giving notice due to financial or production related reasons. The decisive factor is, when the notice of termination is given to the employee. If the employer has informed the employee about the termination of the employment contract during the period of validity of the temporary laws i.e. from 1 April to 31 December, the re-employment period is nine months. The actual termination date of the employment relationship is insignificant, that is to say, the notice period may lapse and the employment relationship end after 31 December without it having any effect to the length of the re-employment period.
6. Reporting absence due to illness and obligation to investigate the circumstances
The coronavirus epidemic is causing companies to temporarily alter their sick leave practices.
Companies should use a self-certification procedure for sick leave, due to the coronavirus pandemic.
A self-certification procedure means that employees can inform the employer themselves when they are not fit for work, without a requiring certificate from a doctor or nurse to confirm the loss of working capacity. Self-certification satisfies the requirements in the collective agreement for a reliable account of illness, and it is used when the wage or salary is paid for the period of illness.
The right to be absent due to illness based on self-certification can be used for absences lasting from three to seven calendar days when the employee is ill with the flu or coronavirus. The employer may specify the acceptable length of self-certified absence within the specified limits. The authorities recommend an absence of approximately one week to prevent the risk of infection.
The employer must be informed without delay when an employee is unable to work. If the employee fails to inform the employer without delay, either wilfully or through negligence, the obligation to pay wages or salary shall begin when the notification is made.
However, the employer may obligate the employee to provide a medical certificate covering the entire period of illness in order for the employee to receive wages or salary, if there are justified grounds for doing so.
If the employer designates a doctor to be consulted, the employer shall pay the costs of the medical certificate.
7. Reporting an absence due to the illness of a child under ten years of age
The aforementioned self-certification practice for employees who fall ill shall also apply to reporting the illness of a child under ten years of age.
In other regards, the provisions of the existing collective agreements shall apply to the illness of a child under ten years of age and the subsequent absence.