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The Government Cuts Holiday Bonuses But Leaves the Overtime Pay Untouched

The Government Cuts Holiday Bonuses But Leaves the Overtime Pay Untouched
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From left to right, Markku Jalonen of the local government employers KT, Jari Lindström, the minister of justice and employment, Juha Sipilä, the prime minister, and Alexander Stubb, the finance minister, explaining the changed measures regarding the cuts to media at the prime minister’s official residence Kesäranta on Monday September 28. According to Sipilä, there is hope to find a common ground between the government and labour unions. Picture: Tony Öhberg for Finland Today

On Monday afternoon, the members of the government and the chairs of the labour unions joined in for the third round of negotiations regarding on how to improve the competitiveness of Finland and to provide a sustainable basis for the funding of the welfare society.

At the beginning of September, Finland Today listed the most painful cuts concerning the common worker.

On Monday, the government decided to omit two of the cuts:

1. The government will not touch the overtime pay, which in the previous plan was decided to be halved.

2. The Sunday pay will not be reduced.

Instead, the government decided to outline a law, which would provide a statutory right to a holiday bonus, which currently is a measure dependent on the company and contracts. On the flip side, the maximum holiday bonus currently paid will be reduced by about 30 per cent.

According to prime minister Juha Sipilä, the two things that have chafed the most were the cuts targeted on Sunday and overtime pay.

Sipilä said at the press conference in the prime minister’s official residence Kesäranta on Monday evening that the new decisions are based on listening to the labour unions, and that a common ground for “working together” is about to be established.

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HERE ARE SOME ADDITIONAL CUTS

1. Epiphany and Ascension Day will be changed into unpaid public holidays without reducing annual working time. If an employee does not work on those days, the equivalent hours can be worked at another time and compensation paid accordingly. In sectors that work every day of the week, Epiphany and Ascension Day no longer entitle a Sunday pay but normal compensation will be paid for those days.

2. Provisions regarding pay during illness are to be amended so that the first day is unpaid and 80 per cent of pay will be paid for days 2–9. Pay during the following sick days will be paid according to the applicable collective agreement.

3. The maximum holiday length will be six weeks. This means that the longest holidays will be shortened in the public sector and some industries in the private sector.

4. The private employer’s social security contribution will be reduced by 1.72 percentage points. More details on the structure of financing, the schedule and possible staggering of the measures will be given in the context of the general government fiscal plan of the spring of 2016.

In addition to the aforementioned measures, the government will improve workers’ change security and even out family leave costs. Change security will be enhanced in redundancies that take place for financial or production-related reasons.

AND SOME ADDITIONAL ENHANCEMENTS

1. Workers of companies employing more than 20 people will be offered, alongside redundancy pay, the right to re-employment training, with a value at least equal to the company staff’s average monthly pay.

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2. Equal treatment and employment of young women will be promoted by equalising the costs arising to employers from family leave, with a lump sum of 2,500 euros.

3. In a company employing more than 20 people, the employer must provide occupational health care services for a six-month period after redundancy.

“The key is to create jobs and thus strengthen the Finnish general government finances,” Sipilä said.

He reminded that in many EU member states unemployment decreases but in Finland it rises.

“This negative trend can be turned, as long as bold decisions are made and swiftly implemented.”

According to Lauri Lyly, chair of the labour union SAK, the government is still forcing laws upon people: they took away two [laws] and replaced them with another. So the situation remains about the same.

If we compare the 30 per cent reduction from the holiday bonus, it, according to Lyly, corresponds deductions of about 400 to 600 euros while comparing with a Finn earning an average wage. Lyly said that the only “good thing in the government’s proposal” is that about 200,000 people are now entitled to a holiday bonus.

The government’s statement on the additional measures will be discussed by the parliament on Wednesday September 30.

The government is still likely to keep negotiating with the labour unions. The parliament is expected to implement the laws by June 2016.

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About The Author

Tony Öhberg

The founder. Reporter and photojournalist. Salesman. Fluent in three languages. Pushing a career in journalism spanning two decades. Always looking for opportunities to tell another story.

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