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Labour Legislation

The aim of the Federation of Finnish Enterprises is to reform the labour market system so as to improve employment and reduce unemployment. Reforms are necessary in order to secure and fund well-being and to look after the most disadvantaged groups of people. 

The Finnish labour market is clearly more inflexible than labour markets in competing countries. The labour market gives way mainly towards unemployment. Job-specifically tailored salary, working hours and other solutions would bring about effective changes faster and more fluently.

The FFE demands that agreeing on the terms of employment on the job should be enhanced through legal amendments to secure employment and growth. Employees and the entrepreneur must be given room to establish mutual agreements in terms of reasonable solutions concerning work, salary and the organisation of working hours and free time so that the arrangement is as reasonable as possible in terms of the employees’ needs and the efficiency of production and business operations. This increases productivity. 

Enterprises subject to a generally applicable collective agreement must be granted the same flexibilities as are available to organised enterprises. Establishing agreements is a joint concern at the workplace, and part of the employees should not be excluded from this. Current legislation often prevents local agreements in enterprises subject to a generally applicable collective agreement. The reason for this is that if the parties of the collective agreement have allowed for local agreements on certain matters provided by law, establishing such agreements is legally only possible for members of employers’ associations. The FFE demands that the bans are lifted and unorganised enterprises are given equal status with organised enterprises. Agreements cannot work in practice, if only employees belonging to a trade union may take part in establishing the agreement and choosing the employees’ representative. The law may not discriminate against unorganised employees. The lifting of the bans would simultaneously abolish almost 50 regulations preventing agreements.

Another key structural reform would be to facilitate employment by making it easier to dismiss employees on person-based grounds. Such legislation is already under preparation. The individual grounds basis, which is too strict, reduces the willingness to hire employees, especially among the smallest enterprises. The smaller the enterprise, the more damaging the consequences of unsuccessful recruitment.

The FFE has achieved many of its goals to improve the labour market. At the start of 2017, legal amendments entered into force whereby the trial period was extended and fixed-term employment of no more than one year was made possible when hiring a long-term unemployed person. At the same time, the obligation of an employer to re-employ an employee* was shortened from nine months to four months, as a general rule. The Parliament dismissed a citizens’ initiative demanding that the law provide for a minimum weekly working time of 18 hours in part-time work. The FFE explicitly objected the acceptance of the citizens’ initiative. The Federation ensured that hiring people under zero-hour contracts will remain possible.

*The obligation to re-employ means that an employer must offer a job to a former employee whom the employer has dismissed under financial and production-related grounds and who is still seeking a job via the TE Office, if the employer is seeking employees for the same or a similar position in which the dismissed employee has been in.