Government measures in key jurisdictions 3rd edition final - Flipbook - Page 49
Finland
Employment
•
What financial
•
support is the government
providing to businesses
and to individuals on
employment issues? •
Insolvency
Support for business costs from the State Treasury mentioned in the previous section is particularly
important to employers, as it may be used to cover payroll costs as well as fixed costs.
Employers’ statutory pension contribution has temporarily been reduced. Employers’ statutory
pension contribution (has been reduced by 2.6 percentage points. In addition, the contribution
payments can be postponed by up to three months.
Employees’ right to unemployment security has temporarily been improved. The qualifying period
for unemployment benefit has been removed, i.e. temporarily laid-off or terminated employees are
entitled to unemployment benefit from the first day of unemployment. Also, the required period for
employment that employees have to meet in order to be entitled to unemployment allowance has
been reduced. Unlike before the coronavirus pandemic, entrepreneurs are now also entitled to
unemployment security.
•
The Finnish government has made multiple amendments to the employment legislation. The most
important changes are related to employer’s right to temporarily lay-off employees and terminate
employment contracts, as well as the personnel consultation obligation which employers in Finland
have to fulfill before making decisions that affect its personnel, such as redundancies.
•
Normally, employers are not entitled to lay off fixed-term employees on financial grounds. Now,
employers are entitled to temporarily lay off fixed-term employees in the case of temporary
reduction of work. Furthermore, temporary lay-offs may be executed following a five-day notice
period instead of the usual 14-day notice period.
•
The government has expanded the right to terminate an employment contract, as cancellation of an
employment relationship during a trial period is now allowed on financial and production-related
grounds. Normally, cancellation during a trial period is only possible on individual grounds.
•
The duration of the negotiations pursuant to the personnel consultation obligation has been
reduced to 5 days instead of the usual 14-42 days.
•
Employers’ obligation to re-employ an employee whose employment has been terminated on
financial and production-related grounds has been extended to 9 months from the usual 4-6
months, which improves employees’ possibilities to return to previous employment.
•
All temporary amendments are expected to remain in force until 31 December 2020.
•
On 28 April 2020, the parliament of Finland approved a legislative proposal for the temporary
amendment of the Finnish Bankruptcy Act. The Bankruptcy Act is temporarily amended so as to
restrict a creditor’s right to file for the bankruptcy of a debtor on the basis of an insolvency
assumption. Pursuant to the normal Bankruptcy Act, a debtor is deemed insolvent by the court if
the debtor has not repaid a clear and undisputed claim that has fallen due within one week of the
receipt of a payment reminder. Thus, as a result of the law reform, this assumption is temporarily
removed. The amendment will be in force until 31 October 2020.
•
In addition to the above, there have been some temporary amendments to the Enforcement Code
in such way that the exceptional circumstances arising from the coronavirus pandemic and the
financial difficulties resulting from it could be taken into account in the enforcement proceedings.
Has the government
made any changes
to insolvency
legislation?
Government measures in key jurisdictions
49