Government Reduces Size Limit of Enterprises Allowed to Lay Off Employees Easier
The Finnish government has made some key amendments to its proposal to lower the threshold for employment on the basis of comments it received on its draft proposal.
The grounds for dismissal would be amended only for enterprises employing fewer than 10 persons, which is also the Statistics Finland definition for micro-enterprise. “Our draft proposal was criticized for setting the limit too high at 20 persons because the majority of Finnish companies employ fewer than 20 persons. The limit would have been high even by international standards. In Germany, for example, protection against dismissal is lower in enterprises with fewer than 10 employees,” said Minister of Employment Jari Lindström.
The qualifying period for unemployment security would be 60 days for dismissed persons, instead of 90 days.
The wording of the draft proposal will be revised. The government
Unreasonable firing banned
“However, the lower limit will not change the original purpose of the government proposal, which is to make it easier for small enterprises to employ more people. Currently, the rules protecting employees against unjustified termination raise the threshold too high for many small enterprises to recruit more people. It is unreasonably difficult to fix a mistake in hiring. The smaller the enterprise, the higher the risk in recruitment,” said Lindström.
The government decided in the government spending limits discussion in 2018 to lower the threshold for employment by amending the rules governing the grounds for termination in the Employment Contracts Act. The draft proposal was circulated for comments from July 5 to August 16, 2018. The government has made the following revisions to its draft proposal based on the comments received:
“Although the starting point for this reform was the employers’ needs, we have never forgotten the protection of employees. The Finnish labor market will not become some unregulated ‘Wild West’, and employers will not have free rein to dismiss their employees. Our proposal complies with the Finnish Constitution and international conventions,” said Minister Lindström.
The new rules could be applied in situations where employees do not observe working hours, fail to complete their assigned duties or neglect to follow instructions. Indiscreet behavior that makes work difficult for others in a small work community could also be grounds for dismissal.
A condition for dismissal is that the employee in question has first been cautioned for reprehensible conduct. Temporary underachievement or minor transgression or negligence will not constitute grounds for dismissal.
The government will continue to work on the proposal, which should be ready for submission to the parliament in the week starting on November 19.