Background information

In order facilitate fast adaptation of businesses to the weakened demand of services and products, amendments to the Employment Contracts Act (2001/55) have been made. These amendments shorten the notice period for temporary lay-offs.

In Finland, employers are responsible for informing about temporary lay-offs. In normal circumstances, the notice period for temporary lay-offs is 14 days. As a result of the COVID-19 outbreak, the Act was amended in March 2020 and therefore the notice period will be 5 days between April and June 2020.

Many collective agreements further regulate the notice period for temporary lay-offs and these regulations laid down in collective agreements shall apply. In accordance with Chapter 13, this regulation may differ from the notice period regulated in Employment Contracts Act. Even during the period the temporary provision is in force, employers shall follow the rules set in the collective agreement.

However, approximately 90% of employees who work for employers who are members to peak-level employers's organisation Confederation of Finnish Industries EK are covered by collective agreements that have been temporarily adapted to follow this legislative amendment.

Content of measure

This measure covers all employers that need to temporarily lay off personnel.

Employees may be laid off when the potential of the employer to offer work has diminished (either temporarily or permanently) and the employer cannot provide the employee with other suitable work or training.

The right to shortened notice period is not applicable to the public sector employers.

There are no direct monetary aspects involved in this measure. However, considering that during the notice period companies must pay employees' salary whereas during lay-offs the state and unemployment funds pay out unemployment allowance (or labour market subsidy) for the employees, the shortened notice period has significant financial benefits for companies as it allows them to faster adapt to the COVID-19 related market disturbances.

Use of measure

No information to date.

Target groups

Workers	Businesses	Citizens
Employees in standard employment	Does not apply to businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government Social partners jointly	No special funding required

Social partners

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

	Trade unions	Employers' organisations
Role	Agreed (outcome) incl. social partner initiative	Agreed (outcome) incl. social partner initiative
Form	Any other form of consultation, institutionalised (as stable working groups or committees) or informal	Any other form of consultation, institutionalised (as stable working groups or committees) or informal

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

• Social partners jointly
• Main level of involvement: Peak or cross-sectoral level

Involvement

In March 2020, the peak-level social partners jointly proposed a set of actions for the Finnish Government. These proposed measures seek to amend labour law and facilitate adaptation of businesses to the new circumstances. Shortening the lay-off notice period was among the proposed measures.

In May 2020, the peak-level social partners jointly proposed the extension of the duration of these temporary measures until the end of 2020.

Views and reactions

The peak-level social partners stress that this measure is part of the wider package of measures (proposed by them in March 2020) and amendments to labour law that include both measures that facilitate adaptation of businesses to the new market situation but also measures that support employees who are being either temporarily or permanently dismissed.

Sources

• 10 April 2019: European Monitoring Center on Change - Finland: temporary lay off (www.eurofound.europa.eu)
• 20 March 2020: Social partners' proposal to help businesses in the corona crisis (akava.fi)
• 31 March 2020: Notice period for lay-offs and the duration of co-operation negotiations will be temporarily shortened (tem.fi)
• 14 May 2020: Labor market organizations agree on layoffs and unemployment security (Työmarkkinakeskusjärjestöt sopuun lomautuksista ja työttömyysturvasta) (ek.fi)
• 05 June 2020: Government proposal HE 92/2020 vp (Hallituksen esitys HE 92/2020 vp) (www.eduskunta.fi)
• 23 June 2020: Measures that have brought security and flexibility to labour markets during coronavirus epidemic will be extended (Jatkoa toimille, joilla on tuotu turvaa ja joustoa työmarkkinoille korona-aikana) (tem.fi)