Government proposes to extend measures that have brought security and flexibility to labour markets during coronavirus epidemic

The Government considers it necessary to continue the measures that have secured the livelihoods of jobseekers and entrepreneurs and helped businesses to overcome the worst of the crisis. The measures concern lay-offs and co-operation procedures; the right of laid-off employees and entrepreneurs to unemployment benefit; and start-up funding.

On 5 June 2020, the Government submitted proposals to Parliament concerning amendments to the Employment Contracts Act, the Seafarers’ Employment Contracts Act, the Act on Co-operation within Undertakings, the Unemployment Security Act and the Act on Public Business and Employment Service. The Government’s proposals are based on a proposition by the labour market confederations to extend the validity of the temporary amendments to labour legislation and unemployment security legislation. The proposals are related to the fourth supplementary budget proposal for 2020.

Notice period for lay-offs and the duration of co-operation negotiations

The Government proposes that the amendments made to the Employment Contracts Act, the Seafarers’ Employment Contracts Act and the Act on Co-operation within Undertakings since 1 April 2020 remain in force until the end of 2020. The amendments have aimed to help businesses adjust to changes in demand for labour caused by the coronavirus epidemic.

As per the temporary amendments, the period of notice before lay-off and the duration of co-operation negotiations regarding lay-offs have been shortened. In addition, it has become possible for employers to lay off a fixed-term employee and to terminate an employee’s contract during the trial period on financial or production-related grounds. On the other hand, the period during which the employer is obligated to re-employ an employee dismissed for financial or production-related reasons has been temporarily extended.

Right of laid-off employees and entrepreneurs to unemployment security

As of 1 April 2020, employees who have been laid off have been entitled to unemployment benefit even if they are engaged in, for example, business activities or studies. The amendment to the Unemployment Security Act has aimed to secure the livelihoods of laid-off employees and to streamline the processing of unemployment security matters in TE Offices during the COVID-19 pandemic.

Meanwhile, entrepreneurs have since 8 April 2020 been temporarily entitled to labour market support to deal with the sudden and unforeseen decline in demand due to the coronavirus epidemic. The aim has been to ensure the livelihood of entrepreneurs.

The Government proposes that the temporary amendments concerning the right of laid-off employees to unemployment benefit and the right of entrepreneurs to labour market support remain in force until 31 December 2020.

Start-up funding, jobseeker interviews and independent study

The maximum duration of start-up funding has been temporarily extended from 12 to 18 months as of 1 May 2020. This legislative amendment ensured that entrepreneurs receiving start-up funding would be able to start and establish business operations despite the coronavirus epidemic. The extension to the maximum duration of start-up funding would remain in force until the end of 2021.  Start-up funding could thus be granted for a maximum of 18 months if the funding period started before the end of 2020.

In addition, TE Offices have been able to organise periodic interviews with jobseekers more flexibly than usual. Interviews have only been arranged at the start of the job search with jobseekers with a special need for an interview. The aim has been to free resources at TE Offices for the processing of unemployment security matters of those who register as unemployed jobseekers. This flexibility would now continue until 31 December 2020.

The Government also proposes to extend the duration of support to jobseekers who claim unemployment benefit for independent study, if their studies have been delayed due to the coronavirus pandemic.

Inquiries:
Johanna Ylitepsa, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 295 064 207 (questions from the media regarding labour legislation)
Timo Meling, Senior Specialist, Legal Affairs, Ministry of Economic Affairs and Employment, tel. +358 295 049 084 (questions from the media regarding unemployment benefit)
Meri Pensamo, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 295 047 257 (questions from the media regarding services for jobseekers and start-up funding)