Significant changes to employment legislation took effect at the turn of the year and have an impact on a number of issues, including the use of fixed-term employment contracts, trial periods, the re-employment obligation, and the employer’s obligations related to change security. The amendment related to the lump sum paid for parental leave took effect at the beginning of April. While the changes do bring added flexibility, they also increase the obligations of companies, particularly those employing more than 30 workers.

Trial period extended

The maximum length of the trial period was extended from four to six months. If the employee has been absent from work due to an incapacity to work or family leave during the trial period, the employer has the right to extend the trial period by one month for each 30-calendar-day absence period. However, in a fixed-term employment relationship, the trial period can be up to half of the duration of the fixed-term employment contract and a maximum of six months. The trial period must always be agreed separately, and the legislative amendment does not have an impact on the shorter trial periods that are based on collective labor agreement terms.

The long-term unemployed can be hired for a fixed-term

An individual who has been unemployed for a long period of time can be hired for fixed-term employment for up to one year without any justified reason. The agreement can be renewed up to two more times within 12 months from the start of the first fixed-term employment agreement, but the total duration of the agreements cannot exceed one year.

Employers hiring females entitled to a lump sum of 2,500 euros

As of April 1, 2017, an employer of a female worker has the right to apply for a lump sum of 2,500 euros to offset costs arising from parental leave. The payment is for each pregnancy or adoption.

A prerequisite of receiving the payment is that the employer has paid at least one month’s salary to the employee during the maternity leave. The employment relationship must have lasted at least three months before the start of the maternity leave, and the employment contract must have been for a period of one year at minimum. The one-year term may also be fulfilled based on two or more consecutive fixed-term employment contracts. At the start of the maternity leave, the employee’s work hours must have been at least 80 percent of the regular work hours of a full-time employee for that industry. The employer is entitled to the lump-sum payment if the first day of the employee’s maternity pay period is on or after April 1, 2017.

Three changes to obligations in production- and financial-related redundancy situations

Re-employment obligation shortened

The employer’s re-employment obligation for employees dismissed on production- or financial-related grounds was shortened to four months. The change applies to employment relationships that have ended on or after January 1,  2017. If the employment relationship has lasted continuously for 12 years, the length of the re-employment obligation is six months.

Obligation to pay for re-employment training

The employer is obligated to pay for coaching or training that promotes the re-employment of employees who, after a five-year employment relationship, are made redundant. The obligation applies only to employers who regularly employ a minimum of 30 employees. The obligation does not apply to employers who have a given a negotiation proposal in line with the Act on Co-operation within Undertakings prior to the Act taking effect on January 1, 2017.

The value of the training must be equal to the calculated value of the employee’s monthly wages or the average monthly wages of employees working at the same location, depending on which is higher. The coaching or training must be implemented within two months from the end of the notice period. Within the framework of certain boundary conditions, other timing and details for the coaching or training  may be agreed upon.

The employer’s principles for arranging the training in question must be included in the personnel and training plan in line with the Act on Co-operation within Undertakings. Personnel and training plans must be updated during 2017.

Obligation to provide occupational health care extended

The employer must provide occupational health care services for dismissed individuals for a period of six months from the end of the work duties, if the employee has worked for the employer for a five-year period. The Act applies to companies that employ at least 30 people on a regular basis.

The obligation to provide occupational health care is withdrawn if the individual enters into a temporary or at least six-month fixed-term employment or service contract with another employer. The employee is obligated to report that they have transferred to another employer.

Additional information:

Antonina Paasikivi, Senior Associate, tel: +358 50 548 4126, [email protected]