Highlight 5 August 2022

Employment law newsletter: Legislative reforms in 2022

Year 2022 has included several significant legislative reforms in the field of employment law. Now is the time to look at some of these legislative changes that are coming our way.

Implementation of the directive on transparent and predictable working conditions

have already come into force The amendments to the Finnish Employment Contracts Act concerning the implementation of the directive 2019/1152 actually already entered into force on 1 August 2022 but has received significantly less attention than the new family leave reform, which also entered into force on the same day. The aim of the directive is to improve working conditions by promoting more transparent and predictable employment.

Firstly, the new legislation means that employers are obliged to provide information on the key terms of employment to the employee earlier than previously, as information regarding the terms of employment must now be provided within seven days from starting work and some of the information can be provided within one month of starting work. Information regarding amendments to the terms of employment shall be provided no later than when the new terms enter into force. Under the new legislation, the obligation to provide information regarding key terms of employment is not applicable if the employee's working hours do not on average exceed three hours per week over a period of four consecutive weeks. However, if the employment contract has been concluded before the amendments entered into force, the employer is not required to provide the new information required under the new legislation.

In addition, the employer's obligation to provide information to employees regarding the employment in writing has been extended, e.g. the information if the employee is free to determine their own place of work, country where work is performed, names of the insurance companies from where statutory insurances have been taken out, as well as specified information in case the employment is based on variable working hours. In addition, an agency worker shall be informed of the name and place of business of the client company, reason and duration of the agreement on use of agency workers due to which the employment contract is fixed-term, and vacancies available in the client company.

Secondly, for arrangements of variable working hours, working time must be periodically assessed to determine whether the amount of work agreed in the contract corresponds to the actual workload. Under the new legislation, the assessment period is extended from 6 months to 12 months. In addition, due to the amendments to the Employment Contracts Act, the employer is obliged to offer to amend the clause regarding the minimum amount of working hours to a higher level if it is necessary to match the actual workload.

Under the new legislation, at the request of a part-time or fixed-term employee, the employer has an obligation to give a reasoned written response regarding the possibility of extending the regular working time or duration of the contract agreed upon in the employment contract.

Lastly, if the employer has an obligation under the law or collective bargaining agreement to provide training to the employee in order to carry out the work for which he has been employed, such training must be free of charge to the employee. However, it is worth noting that the practical impact of the change is relatively small, as such trainings have, often in practice, already been free of charge for employees.

Mandatory pay transparency

A major legislative reform is related to the issue of pay transparency, and the Finnish government's proposal on this issue is scheduled to be published in September 2022.

In Finland, gender-based discrimination is prohibited based on the Act on Equality between Women and Men. Above all, the suggested change to the legislation seeks to have more effective means to ensure pay equality for the same work or work of equal value irrespective of gender.

According to the draft government proposal regarding the mandatory pay transparency, the employer should every year provide employees with a report on the employer's remuneration system and its application, other criteria for determining pay, remuneration and how the employee may affect his or her own pay. At present, in case an employee suspects pay discrimination, the employee's representative must request the salary data of other employees from the Ombudsman for Equality. According to the draft, at the request of an employee suspecting gender pay discrimination, a shop steward or another employee representative would have the right to receive salary information from their employer if they suspect gender pay discrimination. If there are no employee representatives in the workplace, the employee suspecting pay discrimination would be entitled to access the above-mentioned salary information through the Ombudsman for Equality. In such case, the employer would not have any right to refuse to provide the salary information.

The definition of employment relationship

Another major ongoing legislative reform relates to redefining the characteristics of an employment relationship. A government proposal is due to be presented by the middle of October 2022.

The aim of the reform is, above all, to clarify the definition of the concept of an employment relationship in unclear and ambiguous situations, in particular when drawing a line between employees in an employment and working as an entrepreneur. It is proposed that the assessment of an employment relationship would be based on overall consideration in situations where, the nature of the legal relationship for employment remains unclear or open to interpretation.