COVID-19 Newsroom

The pandemic and its effects on business in Finland.

Process to be followed before temporary layoffs during the Covid-19 pandemic

The Finnish government approved on 1 April 2020 temporary amendments that will expedite the process in case an employer is forced to layoff employees temporarily due to the disruptions caused by the COVID-19 virus or the measures implemented in order to decrease the spread of the virus. The temporary measures will remain in place until the end of June 2020. The shorter consultation period and the shorter notice periods provided for in the new legislation may be applied even in processes that have started before the new legislation entered into force.

Employers having 20 or more employees in Finland are generally obliged to consult with the employees or their representatives before the employer may decide to layoff any employees. Normally the formal consultation process may take at least 19 days or even seven weeks, but now the process may be decreased to ten days.

The employer must formally notify the employees about the consultation process at least five days before the first consultation meeting and the deadline remains in place also under the temporary system. However, some collective agreements have implemented a shorter notice period benefitting the employers bound by such collective agreements.

Under the temporary system the minimum duration of the consultations is decreased to five days calculated from the first consultation meeting. Many collective agreements have implemented similar provisions and the employers bound by such collective agreements may apply the shorter consultation period. However, if the applicable collective agreement have not been amended and the collective agreement stipulates that the normal minimum consultation period of 14 days applies, employers bound by such collective agreement are obliged to observe the consultation period defined in the collective agreement and may not benefit from the shorter consultation periods defined in the temporary legislation.

The shorter consultation periods apply only if the consultations concern potential temporary layoffs. If an employer is contemplating outright terminations, the standard minimum periods apply and the consultations have to continue at least for a period of 14 days after the first consultation meeting. The minimum duration is increased to six weeks if the employer employs at least 30 employees and the contemplated measures may result in a termination of 10 or more employees.

Layoff notice

Once the decision on temporary layoffs is made the employees must be notified of the decision. Under the temporary system the notice period for layoff notices have been decreased from 14 days to five. Many collective agreements have been amended to also include a notice period of five or seven days. However, if the applicable collective agreement provides for a longer notice period, employers bound by such a collective agreement are obliged to observe the notice period defined in the applicable collective agreement even if the temporary legislation would provide for a shorter notice period.

Fixed term employees

Normally employees on fixed-term contracts may be temporarily laid off only if the employee is working as substitute for another employee during the other employee’s leave of absence. However, the Employment Contracts Act was now temporarily amended to allow employers to temporarily lay off employees on fixed-term contracts in the same way as employees on permanent contracts.

Obligation to rehire employees

Under Finnish law, if an employer terminates an employee’s employment due to redundancy and the employer later needs a new employee for a similar role, the employer is obliged to rehire the former employee. Normally the rehire obligation remains in place for a period of four months after the termination of the employee’s employment if the employee has been employed by the employer for less than 12 years and six months if the employee has been employed for 12 years or more. However if the employer terminates an employee’s employment due to redundancy between 1 April 2020 and 30 June 2020, the employer’s obligation to rehire the employee will remain in place for a period of nine months after the termination of the employee’s employment.

For more information, please contact:

Jouni Kautto
Specialist Partner
Tuurna