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Finnish Government wants to make fixed-term employment and dismissals easier

Helsinki (18.04.2018 – Heikki Jokinen) The trade unions have been vocal in their criticism of the Government decision to weaken employment security for those under 30 years of age or those working in companies with less than 20 employees.
On 11 April, the Government agreed the General Government Fiscal Plan for 2019–2022.

It will amend the Employment Contracts Act by allowing an employer to make, without restrictions, fixed-term employment contracts with anyone under 30 years of age who has been an unemployed job seeker for at least three months.

The existing legislation demands a justifiable reason for a fixed-term employment contract.

The Government will also prepare an amendment to the Employment Contracts Act aimed at easing the criteria for individual dismissal in businesses employing 20 people or less.

The Employment Contracts Act now says: “The employer shall not terminate an indefinitely valid employment contract without proper and weighty reason.” This the Government will change.

Why put the number of employees at 20?

The Government is motivated in its decisions by a strong desire to lower the threshold for companies to employ new people. PM Juha Sipilä underlines this by claiming that employing the first person in a small company is a big step that should be made easier. His answer is to cut employment security.

However, Sipilä’s Government had already extended the trial period in employment from four to six months. During this time it is very easy to make a dismissal.

And why did the Government put the figure so high as for companies with a maximum of 20 employees? Their official goal was to help very small companies to hire their first employees.

An obvious reason is the Act on Co-operation within Undertakings. It stipulates that in all undertakings with at least 20 employees, any planned redundancies are subject to mandatory consultation with personnel representatives.

Sipilä’s Government simply put the limit as high as the other legislation allows for. And at the same time it makes employment security even weaker for those who already were in a weaker position.

Discriminating against young people

“To differentiate the legislation according to age and to the size of the company will make legislation and court practices more complicated”, says Annika Rönni-Sällinen, director at the Law and Work Environment department of the Central Organisation of Finnish Trade Unions SAK.

“It is also basically unfair: everyone deserves the same security in the labour market despite their age or the size of the company.”

Antti Palola, President of the Finnish Confederation of Professionals STTK criticises the Government decision to weaken employment security for young people.

The STTK Board sees the proposed change as unjust and does not believe that it would improve employment either.

“The only consequence is that short-term employment will increase causing growing uncertainty, insecurity and even fear of working life among young people”, Palola says.

He also asks whether the decision is discriminatory on the basis of age and thus against the Constitution. This should be proved in Court before stipulating new legislation.

According to Palola, the Government plan to make redundancies easier in companies with less than 20 employees is a sign of arrogance.

He stresses that the Government has already been lengthening the trial period in employment and shortening the re-employment obligation of an employee made redundant.

“It is a matter of weakness in recruitment and leadership if these measures have not made taking on new employees easier”; Palola says.

Sture Fjäder, President of Akava, the Confederation of Unions for Professional and Managerial Staff in Finland says that the two proposed changes will put people in unequal positions depending on their age and employer.

“Akava takes a critical stance on these two decisions. We do not accept these reforms and will follow the situation closely.”

The Government agreed the General Government Fiscal Plan for 2019–2022 included many other decisions, too. Some of these are seen as positive by the trade union movement, like having more resources in employment services.