The Finnish government has proposed easing the process of entering into fixed-term employment contracts, accompanied by a reduction in the notice period for temporary layoffs to one week. However, this move has left both employees and employers dissatisfied with the government’s recent proposal regarding fixed-term employment contracts.
Employers find the law too lenient, while employees argue that the government is punishing them without valid reasons. The proposed draft by the government suggests that employers could enter into fixed-term employment contracts without providing a justified reason. This could be done when an employee begins working for the employer for the first time or when more than five years have passed since the previous employment with the same employer.
A tripartite working group from the Ministry of Economic Affairs and Employment has submitted the draft legislation for public consultation. The differing opinions on the working group’s efforts have been expressed by the Confederation of Finnish Industries (EK), the Association of Finnish Local and Regional Authorities (KT), the Confederation of Finnish Industries (SAK), Akava, and STTK. The employee side strongly opposes the entire legislative proposal, claiming that it increases uncertainty in the labor market.
According to SAK’s jurist Katariina Sahlberg, the government continues to penalize employees. The proposed changes are viewed as potentially increasing the use of fixed-term contracts and, consequently, the uncertainty in the labor market. Miia Kannisto, a leading expert at Akava, highlights that if the proposed changes are implemented significantly, indefinite contracts may no longer be the primary form of employment in the future.
The reforms suggested by the government are seen to bring more disadvantages than benefits, leading experts to call for their withdrawal. EK criticizes the proposal for not aligning fully with the government’s agenda, pointing out various restrictions that could hinder the intended goal of lowering the threshold for hiring.
In contrast, the Federation of Finnish Enterprises welcomes the proposal but considers it too lenient. They particularly appreciate the significant reform of shortening the notice period for temporary layoffs, providing companies with better flexibility in responding to changing circumstances.
The draft legislation allows employers to enter into fixed-term employment contracts without justification in specific cases, limiting such contracts to a maximum of three, with a combined duration not exceeding a year. Contracts lasting longer than six months could be terminated under normal conditions, and employers would be required to provide a reasoned explanation for the possibility of continued permanent or fixed-term employment upon contract termination.
The shortened notice period for layoffs from the current 14 days to seven days aims to facilitate quicker adjustments in employment. Moreover, the obligation for re-employment would now apply only to employers with a minimum of 50 employees, requiring them to rehire a dismissed worker if a need arises for similar work within four months of the termination.
In conclusion, the proposed changes in the labor market regulations have sparked a heated debate between stakeholders, with concerns raised about the potential consequences of increased flexibility in fixed-term employment contracts. The balancing act between providing flexibility for employers and ensuring job security for employees remains a critical challenge for policymakers moving forward.
