Guide to Finland’s Employment Regulations
Before heading off to Finland to work, it is essential that everyone finds out a little about their future destination and what they can expect to find there. Employment law, in particular, is one aspect that all workers should look at before committing to a move. For anyone considering looking for work in Finland, here is a brief guide to Finland’s employment regulations which everyone should read.
Contracts and statements of employment
Employment contracts in Finland may be oral or in writing. For oral contracts where employment is to exceed one month, however, employers must give the employee a written contract too . This must give details of:
- The business location and place of work.
- The starting date of the employment and the length of the probationary period, if any.
- Main duties and normal working hours.
- Any relevant collective agreements.
- How remuneration is calculated and when salaries are paid.
- How holiday entitlements are calculated.
- The duration and justification for a fixed term contract, if applicable.
- Required period of notice and how it is calculated.
In addition, if an employee has to work abroad for a month or more, then the employer is required to furnish the employee with the following information a reasonable time before the departure date:
- The duration of the overseas work.
- Terms for repatriation of the employee.
- The currency in which the salary will be paid.
- Remuneration and any fringe benefits that will apply.
Collective agreements are very common in Finland where around 80% of employees are members of a trade union. Employers and employees are bound by the agreements, which often provide for conditions better than those stipulated in employment legislation. There is no statutory minimum wage in Finland, but collective agreements stipulate minimum salaries for particular sectors.
Employees may not work more than 40 hours a week or eight hours a day, unless their job falls outside the provisions of the Working Hours Act (senior executives for example). Working hours in Finland can be arranged, however, so that the weekly average is 40 hours over a 52-week period. Sunday work performed as part of an employeeâ€™s normal weekly hours is paid at twice the usual hourly rate. Employees under the age of 18 are subject to stricter rules regarding working hours.
Rest periods and emergency work are addressed in separate provisions of the Working Hours Act.
Generally speaking, overtime is restricted to a maximum of 250 hours per year but the affected parties â€“ employers, employees and employeesâ€™ representatives â€“ can agree to a further 80 hours. Employees are required to give their consent before working overtime.
Overtime is paid at standard rate plus 50%.
According to the Annual Holidays Act, for every full month worked employees are entitled to 2.5 days holiday, giving 30 days of holiday a year, equating to five weeks (six holiday days being taken up for each full holiday week). This entitlement is reduced to two days for each full month if employment has been for less than 12 months. To qualify for the entitlement, employees must work a minimum of 14 days or 35 hours during the month in question.
In Finland there are two holiday seasons. The summer season runs from 2 May till 30 September â€“ by right, employees may take up to 24 days of their annual leave entitlement during this period. The winter holiday season is from 1 October to 1 May.
Finnish workers also enjoy 13 public holidays a year in addition to the annual holiday entitlement stipulated in the annual Holidays Act.
Bonuses and other benefits
Bonus schemes are a common feature of jobs in Finland. There are no official guidelines regarding bonuses but the Supreme Court of Finland has held that, unless an employer has proper and justified reasons, permanent employees and part-time or fixed-term employees shall enjoy the same terms.Employment Benefits in Finland
Employers are required to provide free occupational health care. However, this is only required to cover work-related health risks.
Temporary and agency workers
Employers are not allowed to differentiate between temporary and permanent staff simply because of their working hours or duration of employment. Agency workers are also entitled to similar benefits, albeit the employerâ€™s obligations are divided between the employee and the agency. Temporary and agency workers are not subject to qualifying periods.
Employees who cannot work due to accident or illness are entitled to the following:
- Full salary for 10 days if employment has lasted for one month or more.
- Half salary for 10 days if employment has lasted for less than half a month.
- After 10 days, a national sickness allowance based on the employeeâ€™s earned income is payable by Kela (Finnish Social Insurance Institution) under the Sickness Insurance Act 2004. It is paid for a maximum of 300 days.
Employers cannot normally recover the salary they pay during the first 10 days but if obliged by a collective agreement to pay a sickness allowance for more than that period then they can be reimbursed the national sickness allowance by Kela for that period to the amount paid to the employee.
It is usually the case that employees under a collective agreement receive greater benefits. In any event, however, they are not entitled to any payment when recovering from sickness or accident that is caused deliberately or through negligence.
Both parties can agree on a notice period, but in the case of no agreement and no collective agreement then the employer must give notice of between 14 days and six months. The employeeâ€™s notice period cannot be longer than that of the employer â€“ if it is, the legal obligation on the employee is only to the time of the employerâ€™s notice period.
In the case of dismissal, employers do not have to give severance pay unless a payment has been specifically agreed or the dismissal is deemed to be unfair, in which case compensation will be payable.
Termination of Employment in Finland
Employers may dismiss employees collectively if financial or production-related issues or reorganisation of the business results in a significant and permanent reduction in the amount of work available. Before dismissing any staff, however, employers must try to find alternative employment for them in their organisation and provide retraining if it is necessary. Also, if vacancies for similar work arise in the organisation within nine months of the redundancies, then these must first be offered to those dismissed employees still looking for work via an employment office.
Before implementing redundancies, employers having 20 or more staff must follow a specified co-operation procedure. At least five days before it takes place, they must submit a written proposal for negotiations and provide relevant information to affected employees. Negotiations must then last a minimum of 14 days, with the employer only permitted to make a final decision on redundancies after the co-operation period is complete.
Employees dismissed on legitimate collective grounds have no entitlement to extra compensation or redundancy pay. However, if they are dismissed without the proper co-operation procedure being followed then they may be entitled to up to 31,570 Euros in compensation.
The rights of parents and caregivers
Mothers in Finland are entitled to 105 working days maternity leave and 158 days parental allowance. They are allowed to begin their leave from 50 to 30 days before the due date of their confinement. During maternity leave they receive income-related compensation from the Social Insurance Institution, provided that they have a permanent home in Finland.Working parents’ rights in Finland
Fathers are allowed to take 18 days leave with benefits during the maternity leave period. An additional 12 days can be taken (as part of the 158 days parental leave allowance). And, the father can have up to another 24 days off if he takes at least the last 12 days of the parental leave allowance.
Adoptive parents are entitled to similar rights except that they do not get the maternity allowance.
The 158 days parental allowance can be taken by either the mother or the father or else shared between them. Once they have used up their family leave, parents are eligible for childcare leave, which allows them to take care of their children under the age of three. However, both parents are not permitted to take full time leave concurrently. The Social Care Institution pays parents looking after a child under three years of age a home care allowance comprising a care allowance and a care supplement.
Alternatively, parents may choose to take part-time as opposed to full-time childcare leave. This allows them to work fewer hours, for which the employer pays on a pro rata basis, up till the end of the year in which their child first goes to school.
If an employeeâ€™s child, or another child under ten years of age who permanently resides in the employeeâ€™s household, suddenly becomes ill, then the employee can take temporary childcare leave amounting to a maximum of four consecutive working days. This is to allow the employee to take care of the child personally or make arrangements for other care.
Payment of salaries â€“ under Finnish law employers are not obliged to pay salaries in the country in which the work is done.
Language – meetings and documents may be conducted and written in English but there should be provision for translation if necessary.
Employers â€“ it is not necessary for employers to be companies of legal entities; they can be individuals.
Transfers â€“ employees transferred to new entities retain their continuous employment period if it is a transfer of undertaking.
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