The amendments of the Employment Contracts Act of Finland enter into force on 1 July 2019 – Renewed person-based termination grounds

The new Amendment Act of the Employment Contracts Act of Finland was adopted by the Finnish Parliament last year and will enter into force on 1 July 2019. As a result of the Act, the total number of employers’ personnel is taken into account at a Section level in the overall assessment of person-based termination grounds. The Act does not itself change the current legal situation, but it highlights the significance of small personnel numbers in the overall assessment of the adequacy of person-based termination grounds.

A person-based ground for termination of an employment relationship must continue to be proper and weighty, and the Act does not lower the threshold for terminations. As has been the case so far, a comprehensive assessment of the possible fulfilment of the grounds for dismissal must also be applied in the future. Thus, the courts will be left to show the possible consequences of the Act in future case law.

According to the Finnish Government’s proposal (HE 227/2018 vp), a small number of personnel could possibly be highlighted when assessing the basis for a person-based termination, for example in cases where the workplace atmosphere is badly inflamed as a result of the employee’s procedure which may be considered to be in breach of employment obligations.

However, a possible easing of the threshold for termination caused by the emphasized importance of small personnel numbers would be limited to situations where, as a result of the small size of the employer, the employee’s procedure has a significant impact on the latter, and only in situations where the employee’s violation or other change in the circumstances has been found to be more severe than minor. Such potential impacts of the Act should therefore not be interpreted to undermine the status of employees’, as the case is primarily about a moderate increase of small employers’ margin in certain special situations.

Finally, it’s worth mentioning in this context that the Amendment Act of the Unemployment Security Act also comes into force on 1 July 2019. In the future, the time period for unpaid unemployment benefit, i.e. the so-called waiting period, is 60 days (previously 90 days) after the termination of the employment relationship, in situations where the employer has decided to dismiss the employee on person-based grounds.

If you need legal help in employment matters, please be in touch!

Our Trainee Jere Lehtimäki took part in writing of this newsletter.

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