Layoff means the temporary suspension of work and pay. The employment relationship remains otherwise unchanged. A temporary layoff may be made for a fixed period, for an indefinite period or by reducing the employee’s daily or weekly working time.
The Finnish temporary layoff system is an international exception. Now, with the corona crisis, a number of countries have taken the Finnish flexible approach to respond to the crisis and negotiated, among other things, the reduction of working hours, which the Finnish temporary layoff system already allows.
The difference, for example, in the reduction of working time is that temporary layoffs are generally intended to be a fixed-term measure whereby the employer seeks to adapt quickly to the deteriorating economic or production situation of the company. Part-time work and temporary layoffs are also partly subject to different rights and obligations of the parties. In addition, due to the corona crisis, the duty of cooperation, for example, for temporary layoffs, will be eased for a fixed period.
An employer may temporarily lay off a permanent employee if he or she has either the grounds for termination laid down in the Employment Contracts Act or the employer’s ability to provide employment has been temporarily reduced and the employer cannot arrange for other suitable work or training to meet the employer’s needs. A layoff is considered temporary if it lasts for a maximum of 90 days.
The employer must inform the employee, no later than 14 days before the start of the temporary layoff, of the reason for the layoff, the starting time and the duration or estimated duration of the layoff (so-called layoff notice). Because of the corona crisis the period of notice is reduced to five days by fixed-term legislation. However, many collective agreements contain non-statutory provisions concerning temporary layoff notices that must continue to be complied with after this amendment unless otherwise agreed by the parties to the collective agreement.
The layoff notice must be given to the employee personally. However, if the notification cannot be submitted in person, it may be sent by letter or electronic means following the same notice period.
In addition, due to the corona crisis, an employer can also temporarily lay off a fixed-term employee to the same extent as a permanent employee. These temporary legislative changes due to the corona crisis will take effect as soon as possible and will remain in force until 30 June.
Here’s the link to changes in labor law that will take effect if the government’s proposal is approved.
An employee who has been laid off is entitled to unemployment benefits for the duration of the temporary layoff. The person who is laid off must register with the local Employment and Economic Development Office (TE office) or his / her unemployment fund and submit the layoff notice from the employer.
Link to the to the Federation of Unemployment Funds in Finland website.
An employee may work for another employer during a temporary layoff. In this situation, and if the employee has been laid off for an indefinite period of time, it is good to take into account the need to return to work when the employer announces the termination of the temporary layoff. Unless otherwise agreed, the employer must give at least seven days’ notice before work commences.
The employee may also terminate his or her employment during the layoff period without notice. In this case, however, the salary for the notice period will not be paid. However, if the employee gives notice when the layoff period has lasted at least 200 calendar days without interruption, the employee shall be entitled to compensation for the period of notice, including holiday pay, which the employer would have been obliged to pay if he had dismissed you.
Hannele Fremer
The author is a lawyer at STTK.
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Finland’s response to mitigate the impact of the COVID-19 pandemic