European Trade Union Institute, ETUI.

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Finland

6 June 2018

Finland: reform of redundancy scheme and easing of fixed-term employment complement government program

Following the introduction of some controversial changes to Finland’s unemployment benefit system, the conservative government has announced further labour market reforms. Proposals are tabled for an easing of fixed term employment contracts and redundancy conditions for companies with fewer than 20 staff. Opposition to this is coming from parliament and the trade unions.

In the General Government Fiscal Plan for 2019-2022, presented by the government on 11 April, it was announced that redundancy legislation was to be made more flexible in SMEs and fixed-term contracts for youngsters will be promoted. Observers see this as a clear shift away from the existing labour market policy regime - which still is based on permanent employment contracts with temporary employment contracts being an exception to the rule that has to be justified by employers. The plan is to amend the Employment Contracts Act by allowing an employer to impose, without restrictions, fixed-term employment contracts on anyone under 30 years of age who has been an unemployed job seeker for at least three months. Moreover, the government is preparing an amendment to the Employment Contracts Act aimed at easing the criteria for individual dismissal in businesses employing 20 people or less.

The new measures fit in a program that is seeking to deregulate the labour market. The government already introduced by the end of 2017 legislation stipulating that an unemployed job-seeker may forfeit 4.65% of his or her benefit if they are deemed to be less than active in their employment search. The trade unions stated that there is statistical evidence that warnings about the impact of modifications to employment security legislation on the incomes of unemployed people have come true: more than half of those receiving unemployment benefits from the SAK unions' funds have seen their benefits cut.

Furthermore, legislation on zero-hours contracts will become effective from the beginning of June 2018. The trade union movement has been struggling for a long time against zero-hours contracts. These set the weekly working hours from zero to 40, giving the employer the possibility to hire staff with no guarantee of work. Although the new zero-hours bill stipulates some limits and says that zero-hours contracts are only allowed when there exists a genuine reason, for example when the amount of work varies unexpectedly and irregularly, the trade unions are of the opinion that the zero-hours bill does little to safeguard worker’s rights.

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