Background information

A temporary layoff scheme, or an obligatory unpaid holiday, is the Finnish version of flexible protection of employment.

According to the Employment Contracts Act [Työsopimuslaki] 55/2001, the term 'laying off' means a temporary interruption of work and payment of wages (either for a fixed or indefinite period of time), while the employment contract in other regards remains in force.

During the COVID-19 emergency, to facilitate businesses' adaptation to the new market situation, the right to temporary layoff has been temporarily extended to cover fixed-term employment contracts.

Content of measure

The instrument is available for employers who need to (temporarily) reduce their workforce due to lack of business.

The measure applies to situations where:

1. the employer could (as an alternative to the temporary layoff) dismiss the employee because the work to be offered has diminished substantially and permanently due to financial or production-related reasons, or for reasons arising from reorganisation of the employer’s operations; or
2. the work or the employer's potential to offer work has diminished temporarily (expected duration maximum 90 days); and
3. the employer cannot reasonably provide the employee with other suitable work or training.

The employer may make the layoff decision unilaterally, or it may be negotiated with the employee(s). Employers are responsible for informing the employees about the lay-offs. The notice period preceding the layoffs is 14 days. Employers with a staff of at least 20 people must commence cooperation negotiations if the employer is considering layoffs. The temporary layoff can be either on a full-time basis, or it can involve a reduction in regular working hours. During the layoff period, the employee is allowed to work for other employers and/or is entitled to unemployment benefits. The maximum duration of an indefinite layoff (when work is permanently diminished) is undefined by law.

A fixed-term employee may only be temporarily laid off if she/he is substituting a permanent employee who could be temporarily laid off.

Use of measure

The effects of the COVID-19 pandemic have significantly increased the number of employees that have been laid off either on a full-time basis or whose working hours have been shortened. In April 2020, the number of employees who were laid-off on a full-time basis was 164,000. This is 152,000 employees more than in April the year before. The number of employees whose working hours had been temporarily reduced was 20,300 which is 14,500 more than in April the year before.

In September, 2022, 14,600 were on a temporary lay-off, which is 16,900 less than in September 2021.

In May 2024, 20,300 unemployed job seekers were on full-time lay-off, which is 7 100 fewer than in April. Compared to May of the previous year, the number of full-time laid-off employees had increased by 5,800.

Target groups

Workers	Businesses	Citizens
Employees in standard employment	Applies to all businesses	Applies to all citizens

Actors and funding

Actors	Funding
National government Public employment service	Companies Employees National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Consulted	Consulted
Form	Direct consultation outside a formal body	Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

• Unknown
• Main level of involvement: Peak or cross-sectoral level

Involvement

Social partners were invited to leave a statement before parliamentary proceedings took place in 2000.

Views and reactions

Trade unions found that employers took to the instrument too lightly without considering alternatives such as training their staff.

Trade unions have estimated that employers sometimes simply transfer the workload and make the non-laid-off employees work more without proper compensation.

Sources

• 16 January 2009: Kansan Uutiset (2009), 'Mieluummin lomautus kuin irtisanominen', 16 January. (www.kansanuutiset.fi)
• 05 March 2014: Demokraatti.fi (2014), 'Ylityöt lisääntyvät lomautusten aikana' - 'Kaikki palavat loppuun', 5 March. (demokraatti.fi)
• 03 May 2014: Kaleva.fi (2014), 'Ihalainen Aamulehdelle: Lomautuksia on liian vähän', 3 May. (www.kaleva.fi)
• 01 February 2018: Ministry of Economic Affairs and Employment TEM (2018), 'Työllisyyskatsaus Helmikuu 2018' (julkaisut.valtioneuvosto.fi)
• 01 February 2019: Ministry of Economic Affairs and Employment TEM (2019), 'Työllisyyskatsaus Helmikuu 2019' (julkaisut.valtioneuvosto.fi)
• 05 February 2019: Employment Contracts Act (55/2001) (www.finlex.fi)
• 14 May 2020: Confederation of Finnish Industries (2020) Työmarkkinakeskusjärjestöt sopuun lomautuksista ja työttömyysturvasta (ek.fi)
• 23 June 2020: Ministry of Economic Affairs and Employment (2020) Measures that have brought security and flexibility to labour markets during coronavirus epidemic will be extended (tem.fi)
• 10 December 2021: Eurofound, ERM database on restructuring related legislation - Working time flexibility (apps.eurofound.europa.eu)
• 02 January 2022: SAK (2022) 'Lomautusta ja muita työehtoja koskevat määräaikaiset poikkeukset' (www.sak.fi)
• 08 July 2022: Työsopimuslaki (55/2001) (www.finlex.fi)
• 25 October 2022: Employment overview September 2022 (Työllisyyskatsaus Syyskuu 2022) (julkaisut.valtioneuvosto.fi)
• 31 May 2024: Ministry of Economic Affairs and Employment (2024) Työllisyyskatsaus (julkaisut.valtioneuvosto.fi)