New government programme proposes significant changes to employment laws

6 July 2023 2 min read

At a glance

The Prime Minister Petteri Orpo’s government has proposed in its government programme several measures relevant for employers intended to be implemented during the government’s four-year term in office.
However, normal procedures and preparatory work for legislative changes must be first completed and the Finnish Parliament must accept the government’s proposals before any changes in the legislation will enter into force.

Key changes proposed

The threshold for scope of application of Co-operation Act would be increased from 20 employees to 50. The minimum redundancy negotiation periods would be reduced by half.
Post-employment re-employment obligations after redundancies would apply only to companies employing at least 50 employees.
The first day of statutory (i.e. not CBA based) sick leave would be unpaid for sick leaves shorter than five days (excluding occupational accidents or diseases).
For up to one year, fixed-term employment agreement would not require a justified reason.
The notice to be given prior to furloughs would be reduced to seven days.
Several measures are being proposed to limit industrial actions.
For employers applying a generally binding collective labour agreement, local bargaining would be allowed and even if the employees have not elected a shop steward on the basis of the collective labour agreement.

The proposed changes are intended to alleviate the challenges companies may face in employing workforce and especially to enhance operating conditions of small and medium-sized companies.

The government’s programme also includes employment targets and measures to reach those targets. As part of these targets, changes are proposed to preconditions for work-based residence permits and to certain employers’ obligations. Some of the proposed changes have been regarded as negative both for the employers but especially for the foreign workforce. In addition, the coverage of unemployment benefits shall be restricted.

In terms of the EU Pay Transparency Directive, the government has announced to promote pay transparency in accordance with the minimum provisions of the Directive.