Article 13 January 2017

Changes in employment legislation

Finnish labour legislation has been amended including revisions to the Employment Contracts Act and the Occupational Health Care Act as of 1 January 2017. The changes are part of the Finnish government's efforts aiming at reinforcing the competitiveness of the Finnish labour market and raising the employment rate.

Extension of the trial period and increased flexibility for fixed-term contracts

The amended Employment Contracts Act came into force 1 January 2017 extending the maximum length of a trial period from four to six months. The employer is also entitled to extend the trial period, if the employee has been absent from work during the trial period due to incapacity for work or family leave.

In addition, it is possible to sign a fixed-term employment contract with a long-term unemployed without a justified reason for a maximum duration of one year. Previously, fixed-term employment contracts lacking a justified reason were considered to be valid indefinitely.

Shortened re-employment obligation and support for employees in a redundancy situation

The period of the obligation to re-hire employees is shortened from nine months to four months. However, if the employment relationship has lasted for 12 years, the re-hire period is six months.

In a redundancy situation (termination of employment based on financial and production-related grounds) an employer is obliged to offer redundant employees re-employment training provided that i) the company employs a minimum of 30 employees and ii) the redundant employee has been employed for at least five years.
The amended Occupational Health Care Act also came to force 1 January 2017. Under the amendments, the employer has an obligation to arrange occupational health care for employees made redundant on financial and production-related grounds for a period of six months after the employee has been released from their duties. This obligation applies to employees whose employment contract has continued at least five years at the time of the termination of the employee's employment contract.

Gradually rising retirement age

Coinciding with the revisions in labour legislation, reforms in employment pension system came into effect 1 January 2017. The earliest eligibility age for old-age pension will be increased gradually from the current age of 63 to 65. The lowest retirement age of employees born in or after 1965 will be adjusted based on the change in life expectancy. Correspondingly, the highest retirement age will also be gradually increased from 68 to 70 and applies to all employees born in or after 1962.

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