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Draft bill on easier dismissal in small enterprises submitted for impact analysis

Ministry of Economic Affairs and Employment
Publication date 17.10.2018 15.27
Press release

The Ministry of Economic Affairs and Employment has submitted a draft government proposal, introducing easier dismissal in enterprises employing fewer than 10 people, to the Finnish Council of Regulatory Impact Analysis (FCRIA) for evaluation.

The Government aims to lower the threshold for employment in small enterprises. The current provisions on protection against unjustified termination have been considered to discourage especially small enterprises from employing more people. The proposed amendments would take into consideration small employers’ poorer resources to bear the consequences of violation or neglect by their employees.

“The Government proposes to moderately lower the dismissal threshold in enterprises with fewer than 10 employees by taking better into consideration the circumstances in small enterprises,” says Minister of Employment Jari Lindström.

“In Finland, the majority of new jobs are created in small enterprises which have potential to employ more people than they do at present. The Government wants to encourage small enterprises to employ more people and in that way foster better employment in Finland,” says Minister Lindström.

Dismissal would be possible only on proper and weighty grounds in the same way as now. In the future, enterprises employing fewer than 10 people could dismiss employees on the grounds of breach or neglect of obligations or changes in the conditions necessary for working that are less serious than what is required by current law, but have such an essential impact on the enterprise that, considering the size of the enterprise, the employer cannot be expected with good reasons to continue the employment relationship.

Arbitrary dismissals would be banned even in the future. The list of prohibited grounds for dismissal in the Employment Contracts Act would still apply even to small enterprises. Employers would still be obligated to caution their employees first and give them the opportunity to amend their actions before dismissing them. Dismissal would be possible only if an employee repeatedly acts in reprehensible ways.

The qualifying period for unemployment benefit would be 60 days instead of the current 90 days in cases where an employer terminates an employment relationship on the grounds of the employee’s reprehensible actions. This amendment would apply to all employees irrespective of the size of their employer.

The Finnish Council of Regulatory Impact Analysis will issue a statement on the draft government proposal and its impact assessment. The Government aims to submit the proposal to Parliament in November 2018.

Draft government proposal (in finnish)

Juha Halttunen, Special Adviser to the Minister of Employment, tel. +358 50 574 0236
Tarja Kröger, Senior Ministerial Adviser, Ministry of Employment and the Economy, tel. +358 29 504 8937
Jan Hjelt, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 50 48940
Timo Meling, Senior Specialist, Legal Affairs, tel. +358 29 50 49084

Jari Lindström
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