Working life in transformation

During the current Finnish Government, numerous decisions have been made that have a negative impact on the employee’s position. Some of these legislative projects have already been implemented through current legislation, such as tightening the conditions of unemployment benefits, tightening the standards of industrial peace, expanding local agreement opportunities and amendments to the Act on Co-operation within Undertakings. However, more is on the way, and as a counterbalance to the legislative projects, no legislative measures have been taken to ensure that the employer’s liability in unlawful redundancy situations, for example, would also be stricter. 

Loimu opposes — fixed-term employment may not be used without justification

In accordance with the Government Programme, the Government is reforming working life legislation to remove barriers to employment and, in particular, to strengthen the operating conditions of SMEs. A draft of the Government’s proposal to amend the Employment Contracts Act was circulated for comment during summer. 

The amendment would make it possible to hire a new employee or an employee whose previous employment relationship with the employer in question has elapsed more than five years for a fixed-term employment relationship for a maximum of one year without grounds. Fixed-term contracts could also be “split into chains”, i.e. a maximum of three fixed-term employment contracts could be concluded with the same employee during the year, provided that the total duration of the contracts does not exceed one year and the contract has been renewed within one year of the start of the first employment contract. 

For the employee, such a proposal means an extended trial period. Currently, the trial period can be a maximum of 6 months, but anyone could have to work as a “new employee” in a one-year fixed-term employment relationship due to a possible amendment to the law. After this, however, even if the employer’s need for work is permanent, nothing would prevent the employer from proceeding in such a way that any applicant who meets the criteria could be hired for a “new” fixed-term employment relationship. 

The change is estimated to increase the use of fixed-term employment relationships in companies. Now, however, this proposal has a much broader impact. The proposed amendment to the Employment Contracts Act would apply to everyone, regardless of the size of the employer and the employer’s industry, and equally to employers in the public sector.

We support forward-looking legislation that develops good working life. We object these proposed detrimental amendments to the Employment Contracts Act, it does not contain any balancing elements from the employee’s point of view and is also otherwise contrary to international regulations and case law. Loimu issued a critical statement on the Government’s proposal. The main purpose of labour legislation is to protect the weaker party, i.e. the employee. The employees’ views were not taken into account in the preparation, but the preparation was carried out under strong political guidance in line with the employer’s views. The uncertainty of the employee in working life will increase even further with the proposal. We are particularly concerned about discrimination against pregnancy and family leave. This is likely to increase with the increasing use of fixed-term employment relationships, which will further weaken the opportunities for starting a family and thus the birth rate.

The notice period for lay-offs will be shortened and the obligation to take a laid-off employee back to work will be removed for small companies

The Government’s legislative proposal also proposes to reduce the notice period for lay-offs in the Employment Contracts Act from 14 days to seven days and to completely remove the obligation to take a laid-off employee back to work under the Employment Contracts Act in companies with fewer than 50 employees.  The legislative amendments have been proposed to enter into force as early as 1 January 2026, and if the political decision-makers do not lead changes for the better from the employee’s perspective this autumn, Finnish working life will unfortunately be even more uncertain in the future. 

Other deterioration to the employee’s employment protection

Unfortunately, legislative amendments have been made very quickly during this parliamentary term, and without proper and real impact assessments.  In addition to weakening the position of fixed-term employees, the obligation to take them back and the notice period for lay-offs, preparations are also under way to lower the dismissal threshold on grounds related to the employee’s person. 

In addition, it is proposed that the Labour Council, which is an independent authority under the Ministry of Economic Affairs and Employment, cease its activities completely for cost-saving reasons. The Labour Council’s task is to issue statements on the application and interpretation of labour legislation and to act as the appeal authority in certain exemption decisions of the Regional State Administrative Agency concerning labour legislation. The Labour Council’s statements are important guidelines in matters related to interpretation of labour legislation, and many of Loimu’s members have also found these statements helpful in interpretational situations in working life. In fact, the dissolution of the Labour Council would only bring about marginal savings, but instead the dissolution would completely remove the employee’s opportunity to rely on low-threshold legal remedies.

The preparations also include the possible termination of the Cooperation Ombudsman’s office for cost-saving reasons. The Cooperation Ombudsman’s office provides advice and statements on the application of the Act on Co-operation within Undertakings, among other things. The advice is free of charge. In addition to the dissolution of the Labour Council, the termination of this office would remove the low-threshold remedy available to another employee.