Suomen Yrittäjät: Labour exploitation distorts competition

A reform of legislation on labour exploitation is currently at the committee stage in Parliament. Suomen Yrittäjät, the Finnish SME association, considers the reform important and necessary.

“Labour exploitation must be tackled effectively. It distorts competition at the expense of law-abiding companies,” says Niko Nurmela, a specialist at Suomen Yrittäjät.

Suomen Yrittäjät was heard on the matter on Thursday by Parliament’s Employment and Equality Committee.

The Government Bill proposes, among other things, replacing the current offence of extortionate employment discrimination with a new criminal offence of extortion in employment. In addition, aggravated extortion in employment would be introduced as a new punishable offence.

“Ensuring equal conditions for competition is particularly important for smaller companies,” Nurmela says.

Scope of criminal liability unchanged

The aim of the changes is to clarify the conditions under which labour exploitation is punishable. The new provisions would not in themselves broaden the scope of criminal liability, but they would remove interpretation and evidentiary problems that have arisen in applying the current legislation. 

“Effectively stamping out labour exploitation requires not only changes to criminal legislation but also sufficient resources for authorities and effective information sharing with both employers and employees,” Nurmela says.

The Government Bill does not propose, for example, general criminalization of underpayment. Instead, extortion in employment would require a clear imbalance between the remuneration paid to the employee and the financial benefit gained by the employer. In addition, the offence would require factors such as the employee’s distress, dependent position or lack of understanding.

“Individual wage payment irregularities cannot fall within criminal law: pay disputes are primarily matters of private law. It’s important to distinguish between criminally reprehensible forms of exploitation and disagreements over pay or other terms of employment,” Nurmela says. 

Suomen Yrittäjät stresses that broader amendments to the Criminal Code would require thorough assessment and preparation. The Criminal Code is not a tool for resolving contractual disputes. The principle of legality in criminal law requires that punishable conduct be defined with sufficient precision and clarity in legislation.

“Criminal justice is always a last resort and should not be used when obligations are unclear or open to interpretation,” Nurmela says.

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