FINLAND: Annual Update – Expected Labour Law Changes in 2017

Discrimination

Requirement to have written equality plan:  The Finnish Non-Discrimination Act requires employers with at least 30 employees to implement a written equality plan by January 1, 2017. The plan must describe the measures the business will take to encourage workplace equality. It can be a standalone document, or incorporated into an existing plan.

Action required:

(1) If the employee threshold is met, prepare the plan and implement by January 1, 2017.

(2) Ensure HR and managers are aware of the measures in the prepared plan.

Pensions

Pension reform:  The Finnish Centre for Pensions has announced a series of pension reforms. These include:
• Increasing the minimum retirement age from 63 to 65 (for persons born after 1955) in three-month increments.
• Phasing out the higher annual pension accrual rates for members aged 53 or above in favour of a standard accrual rate of 1.5% for all plan members regardless of age.
• Abolishing the current part-time pension and replacing it with a partial early old-age retirement, available from 61 years of age.

The changes will be introduced early in 2017.

Action required:

(1) Understand the changes and review current practices to ensure compliance.

(2) Be aware that the increase in the retirement age may result in increased employer liabilities (if promises of specific pension coverage have been made). Longer working careers will also be encouraged.

Posted workers

New notification requirements:   Companies posting workers in Finland will be required to submit specific information to the occupational safety and health authority. The notification will likely be completed online, but this is to be confirmed.

Effective in 2017. The precise date is unknown.

Action required: Keep abreast of the legal situation to track the date on which the rule will take effect.

Employment Contracts Act

Significant changes to the Finnish Employment Contracts Act:  The changes include:
• The maximum length of the trial period will be increased to 6 months (previously 4). Employers can also extend the period if the employee is absent due to family leave or illness.
• Employers must rehire redundant staff if similar work becomes available post-redundancy. The obligation period will be shortened from 9 to 4 months (6 months if the employee has at least 12 years’ service).
• Employers can hire people who have been unemployed for at least 12 months on fixed-term contracts without having to justify the use of this type of contract.

Effective in 2017. The precise date is unknown.

Action required:

(1) Ensure all HR representatives become familiar with the changes, and provide appropriate training to ensure compliance.

(2) Review internal policies and template employment contracts, and update them where necessary to ensure compliance.

Redundancy

Training or education for redundant employees:  Employers with at least 30 employees must offer free education or training to employees made redundant. Employees must have 5 years’ service to qualify. Employers must also offer occupational health care services for 6 months after they stop work.

The changes will be introduced early in 2017.

Action required: Ensure HR representatives and management are aware of the obligations and consider available education and training resources on offer.