Article 8 June 2023

Krogerus' Employment Law afternoon seminar – Latest updates and a glance into the future

In early May, Krogerus' Employment and Benefits practice group organised an employment law seminar on the current and upcoming topics in employment law and working life in Finland. In this article we will take a closer look at the topics of the seminar which included a presentation on the new Co-operation Act by the Co-operation Ombudsman Joel Salminen, a review of the latest developments in the Finnish employment law by our employment law experts and a panel discussion where the panellists expressed their views on the Finnish employment and labour law and discussed the legislative reforms that they would like to see included in the new government programme.

Dialogue in the workplace – not just a process governed by law

The new Co-operation Act entered into force in January 2022 with the key aim to increase interaction and transparency at the workplace. To achieve this, the Act introduced an obligation for the employer to conduct continuous dialogue with the personnel. The Act defines the matters to be addressed in the dialogue and the number of meetings required but provides flexibility by leaving the practicalities to be determined in the undertakings. The list of things that must be addressed during the dialogue includes, for example, the company's financial situation, the use of personnel and the employees' needs for developing their knowhow. Unless otherwise agreed, companies with less than 30 employees should conduct dialogue at least twice a year and in larger companies there should be meetings on a quarterly basis. However, if the employees have not chosen an employee representative among themselves, one dialogue per year would be sufficient. It is important to note that companies cannot decide that no dialogue is conducted, as the Act requires that there should be at least one annual meeting.

In Finland, the authority that supervises compliance with the Co-operation Act is the Co-operation Ombudsman who operates within the Ministry of Economic Affairs and Employment. It was noted in his presentation that the minimum requirements for the dialogue can be met rather easily. However, the objective of the dialogue is not achieved by looking at the content of the Act alone. Instead, continuous dialogue should be based on the reality of the company's business and the matters to be addressed in the meetings should consider the everyday working life of the workplace.

In light of the above, companies may have town hall meetings to discuss important matters in the company's business that may include matters listed in the Act, but which are not intended to be continuous dialogue. It was pointed out by the Co-operation Ombudsman that those "regular" meetings can be used to fulfil the dialogue obligation (assuming that matters within the scope of the Act are addressed and the employees are duly represented) but for evidentiary reasons the meetings that are intended to be the dialogue under the Co-operation Act should be carefully documented. In addition, the employer should remember to inform the employees of the matters to be discussed in the dialogue before the meetings and thereafter of any measures that may be taken.

In addition, the employers should remember to have a workplace community development plan in place and keep it up to date in connection with the dialogue. The purpose of the plan is to ensure systematic and long-term development of the workplace and the employees. The Act includes a list of things that must be included in the plan, but in practice the workplace plan could address, e.g., the management of the workplace and the renewed family leave system.

According to the Co-operation Ombudsman, the application of the new Co-operation Act and its dialogue obligation has started well, and the Ombudsman's role has been to support companies in applying the Act by giving practical assistance. However, if necessary, the Co-operation Ombudsman may request the company to remedy any deficiencies and issue an order to strengthen the request.

Labour market experts' views on the Finnish labour legislation and the needs for its reform

The seminar's panel discussion brought together representatives from the employers' and employees' organisations and other experts to discuss the current state and future of the labour and employment legislation in Finland. The session featured contributions from Nico Steiner from the Ministry of Employment and the Economy; Anu-Tuija Lehto, lawyer at the Central Organisation of Finnish Trade Unions; Jarkko Ruohoniemi, CEO of Technology Industry Employers of Finland; and Janne Makkula, Director of Suomen Yrittäjät (Federation of Finnish Enterprises). As the parliamentary elections were recently held in Finland, the panellists were also asked about the reforms they would like to see included in the new government programme.

In particular, the panellists expressed their views on local bargaining which has long been a much-debated topic in Finland. Both the employers' and employees' side appeared to agree that local bargaining has positive impacts on the Finnish labour market, and in this respect, they wish for measures that strengthen local bargaining to be promoted during the next government term. In general, local agreements and company-specific collective agreements are seen as having great potential to make working life more flexible. Local agreements have also been on the agenda of previous governments and the number of company-specific collective agreements have increased in recent years in Finland, especially due to the lack of nationwide agreements in some industries.

The overall reform of the Annual Holidays Act (which in its current form is somewhat complex), improving the disadvantaged employee groups' position, reform of the legislation on industrial peace as well as reforms for unemployment protection legislation were topics mentioned by the panellists as something that should be included in the programme of the new government in Finland.

The panellists expect that during the next few years EU directives and case law by the Court of Justice of the European Union (CJEU) will continue to have a large impact on the legislative changes within the field of employment law. Currently, directives on equal pay and protection of the rights of platform workers have attracted public attention. As regards EU legislation for the platform workers' status, one of the panellists identified legislative challenges. It was raised by him that Finnish law already contains a relatively clear definition of employment relationship (please also see the amendment below). The possible EU directive on platform work could potentially complicate the current state of Finnish law and lead to a situation where there are two different definitions of employment.

What to expect in labour and employment law in 2023

In 2022, several legislative amendments concerning working life came into force in Finland. These included among others a new Co-operation Act, changes to the compensation obligation for the post-employment non-compete covenants and a comprehensive reform of family leaves (please see our previous newsletters). Further, the new Whistleblowing Act entered into force in the beginning of this year. As the parliamentary elections were recently held, it can be expected that new employment-related government proposals are not submitted to the parliament for a while. However, it can be noted that the government bill on amendments to the Act on the Protection of Privacy in Working Life, which expired due to the ending of the government term, could potentially be utilised by the new government. At least, it has been recognised that the statutory requirements under Finnish law for an employee's consent regarding any data processing is problematic both from a GDPR perspective and from a practical perspective. It was proposed that consent is not needed when the employer collects the employee's personal data from other sources than the employee themselves during the employment relationship for the purpose of executing the employer's rights and obligations stipulated by law.

In June 2023, an amendment to the Occupational Safety and Health Act will enter into force. The amendment will specify what the employer must consider when implementing the obligation to take care of the employees' safety and health at the workplace. Under the amendment, the employer is obliged to consider the personal conditions of the employee that may be relevant to safety and health at work and take individual actions based on them. The amendment lists for example ageing, language skills and psychological factors as matters that the employers must consider in their risk assessment. Also, the competence of the Occupational Safety and Health Authority to monitor underpayment will be clarified. From June, the authority is entitled to give warnings and binding decisions to employers failing to pay the minimum wage required by law or collective agreement.

In addition, the scope of the Employment Contracts Act will be clarified from 1 July 2023 with the overall assessment provision for situations where it is unclear whether a contractual relationship is an employment relationship. However, this clarification is not expected to change the current legal position.

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