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10/01/2019

Employment law: Year 2018 in review, looking ahead to 2019

By Carola Möller, Nana Tamminen

As the year 2018 has drawn to a close, it is a good moment to take a look back at changes in the field of employment law during the past year and the amendments to be expected during 2019. 

Legislative reforms, amendments and significant precedents in 2018

The year 2018 brought major reforms and amendments to the Finnish employment legislation with European Union regulations and directives entering into force and also having an impact on employment relationships. 

The first half of the year was dedicated to data protection as perhaps the most noteworthy regulation – the EU General Data Protection Regulation (GDPR) – entered into force in May 2018 imposing new requirements on the processing of data and penalties for non-compliance.

Furthermore, the Trade Secrets Act, the Seasonal Workers Act and the so-called ICT Act, all of which implement EU directives, entered into force during 2018. The Seasonal Workers Act and the ICT Act improve and harmonise the position of third country nationals coming to the EU to work. The Trade Secrets Act defines the concept of a trade secret and streamlines the legislation. 

Also, some purely employment-related legislative reforms worth noting were introduced. The Employment Contract Act was amended in order to improve the rights of employees with variable working hours. Additionally, the Act was amended by allowing positions to be offered to apprentices regardless of certain employees' priority rights to vacancies. 

New case law was introduced during 2018 as the Supreme Court gave three interesting precedents on the definition of a transfer of business. This may have paved the way for a broader interpretation of the concept. 

What can be expected during year 2019?

In addition to legislative reforms and precedents, the year 2018 included heated debate and political strikes due to government efforts to increase the employment rate and lowering the threshold for employment through means of easing dismissals in small companies for reasons related to the employee. 

Originally, the aim was to facilitate termination in companies of less than 20 employees. However, in the final proposal the exact number of employees was replaced with a simple reference to the employer's size. The amendment is expected to enter into force in July 2019.  

Furthermore, as part of the renewal of the Finnish working hours legislation, the amendments to the Annual Holidays Act, implementing now only the minimum requirements laid down by the judgments of the Court of Justice of the EU, are expected to enter into force during the spring of 2019. 

Changes will ensure the employee's right to four weeks' paid annual leave in case of absence from work due to sickness or medical rehabilitation. The total reform of the Working Hours Act, introducing, among other things, a new concept of flexible working hours, will keep us waiting until at least January 2020. 

Legislative amendments regarding non-competition agreements and a reform regarding co-operation consultation obligation are also currently being considered. Governmental working groups were set in 2018, but it is still too early to say if, when and in what way the current legislation will be amended.