COVID-19: Labour law and Co-operation negotiations.

The government approved a number of temporary changes to labor law to ease the situation for companies and workers during the coronavirus pandemic. The changes will enable operations and the workforce to adapt quickly as demand weakens in exceptional circumstances.

Initially, the amendments were valid from April 1 to June 30, 2020, but the government extended the validity until December 31, 2020.

It is important to note that the law only defines the minimum attributes for the layoff process. Some fields of industries have negotiated their own collective agreements (”CBA” for short, ”työehtosopimus” or ”TES” in Finnish) which have their own regulations concerning the duration and form of the various stages of the lay-off process. If there is an applicable CBA, its provisions shall overrule the law. Therefore, it is necessary to check before starting the process whether there is an applicable CBA and furthermore, what is the current status of the CBA in question. For example, the temporary changes to the CBA’s negotiated by PAM are listed here: (in Finnish)

Accelerated lay-off process (applicable in the absence of an applicable CBA)

The lay-off process of companies covered by the Co-operation Act has been accelerated, the time periods are 5 + 5 + 5, ie the negotiation proposal must be submitted five days before the start of negotiations, the negotiations must last five days and the lay-off notice itself must be given five days before the start. It is important to note that both the negotiation proposal and the negotiations themselves meet the requirements of Chapter 8 of the Co-operation Act, despite the exceptional situation.

Companies covered by the Co-operation Act, which have an exceptional situation in accordance with section 60 of the Co-operation Act, may submit lay-off notifications without co-operation negotiations. According to this Section, an employer may dismiss without collective negotiations on the grounds of “particularly serious causes of damage to the undertaking’s production and service activities or to the undertaking’s economy which could not have been known in advance constitute an obstacle to collective bargaining.” Deviation is only possible if the co-operative negotiations are hindered by particularly serious reasons that could not have been known in advance. An assessment of the exceptional situation is made on a case-by-case basis.

Companies that regularly employ less than 20 people are not covered by the Co-operation Act but instead comply with the Employment Contracts Act or the CBA regarding lay-offs. With the temporary amendment to the Employment Contracts Act, the layoff process will take 5 days. Pursuant to Chapter 5, Section 3 of the Employment Contracts Act, the employer must provide the employee with a preliminary statement of the grounds for the dismissal and its estimated scope, method of implementation, start date and duration. Prior notice shall be given to the worker or their representatives as soon as the need for redundancy becomes known and thereafter they shall be given an opportunity to be heard.

The temporary amendment to the law also makes it possible to lay off a fixed-term employee under the same conditions as in Chapter 5, Section 2 of the Employment Contracts Act as a permanent employee.

Termination of employment during the probation period

The temporary amendment to Chapter 1, Section 4 of the Employment Contracts Act allows a probationary employee to be dismissed for a production or financial reason. However, the precondition is that the grounds for termination are the grounds pursuant to Chapter 7, Sections 3-4 of the Employment Contracts Act.

Reinstatement obligation for a dismissed employee has been extended to 9 months

The temporary amendment to Chapter 6, Section 6 of the Employment Contracts Act extends the employee’s reinstatement obligation to 9 months in situations where the employee has been dismissed for production or financial reasons but the employer needs employees for the same or similar tasks as those of the terminated employee’s. The 9-month reinstatement period must be observed in situations where the employer has given the actual notice of termination to the employee during the term of the law, ie before 31.12.2020.