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COVID-19 EU PolicyWatch

Database of national-level responses

Eurofound's COVID-19 EU PolicyWatch collates information on the responses of government and social partners to the crisis, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for case FI-2020-14/263 Updated – measures in Finland

Temporary layoffs of employees on a fixed-term contracts

Määräaikaisen työntekijän lomauttaminen

Country Finland , applies nationwide
Time period Temporary, 01 April 2020 – 31 December 2020
Type Legislations or other statutory regulations
Category Promoting the economic, labour market and social recovery
– Flexibilisation and security
Author Amanda Kinnunen (Oxford Research) and Eurofound
Case created 03 April 2020 (updated 10 July 2020)

Background information

In accordance with section 9 Employment Contracts Act (55/2001), temporary lay-offs of fixed term employees are not possible unless "the employee is working as a substitute for a permanent employee and if the employer would be entitled to lay off the permanent employee if the permanent employee were working."

In order to make businesses' adaptation to the new market situation, the right to lay off has been temporarily extended to cover fixed-term employment contracts. The same conditions apply as in the case of lay-offs of employees with a permanent contract.

Content of measure

This measure covers all employers that need to temporarily lay off employees with fixed-term contracts during the period the temporary provisions are in force. Employees may be laid off when the potential of the employer to offer work to its employees has diminished (either temporarily or permanently) and the employer cannot provide the employee with other suitable work or training. Due to COVID-19, the notice period for lay-offs is shortened and during the period the temporary provisions are in force, employers need to be informed of the lay-off no more than five days before the lay-off begins.

Not applicable to the following employers: the State, municipalities, KELA, Åland Government, Evangelical Lutheran Church or Orthodox Church.

This measure does not involve any direct financial support but it makes adaption of workers to the new market situation easier as the right to lay-off is extended to fixed-term contracts.

Updates

The following updates to this measure have been made after it came into effect.

06 July 2020

In May 2020, the peak-level social partners proposed to the Government that the duration of the temporary amendments adopted in March 2020 should be extended until the end of 2020. This includes temporary layoffs of employees on a fixed-term contracts.

In June 2020, the Parliament accepted the Governments proposal to extend the duration of these temporary amendments until the end of 2020.

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:

  • Unknown
  • 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. Extending the right to lay off to cover employees on a fixed term contract was part of this set of proposed measures.

In May 2020, the peak-level social partners proposed to the Government that the duration of the temporary amendments to labour law should be extended 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’ proposals 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)

Citation

Eurofound (2020), Temporary layoffs of employees on a fixed-term contracts, case FI-2020-14/263 (measures in Finland), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch

Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.