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Minister of Employment Haatainen: Government budget session decisions support the achievement of the employment target

Ministry of Economic Affairs and Employment
Publication date 16.9.2020 17.03 | Published in English on 18.9.2020 at 13.56
Press release
Työministeri Tuula Haatainen

“The Government demonstrated its capacity to act in the budget session by making bold decisions to boost employment. Labour market organisations are also invited to provide solutions to strengthen the employment and labour market position of older people. I am confident that by the end of November we will have received some solutions from them. The organisations have cooperated well with the Government, especially during the coronavirus crisis,” Minister of Employment Tuula Haatainen says. 

Haatainen considers it self-evident that more decisions to boost employment are needed. During its term, the Government will take employment measures that will bolster the economy with the aim of achieving an employment-generating impact amounting to 80,000 new jobs.

“In boosting employment, I want Finland’s approach to resemble more that of the other Nordic countries. This approach is clearly reflected in the Government’s decisions in the budget session, and I intend to promote it in the future too. These are major reforms that we are driving forward,” Haatainen says.

More personalised services and faster employment of jobseekers

In order to support job search and direct the unemployed to the appropriate services, the need for services will be assessed better and support for employment services will be increased. As part of this, unemployed jobseekers will meet a caseworker from the TE Office every two weeks at the beginning of their job search. After that, each six-month period of unemployment will be followed by an intense service period of one month. To this end, the resources of the TE Offices will be increased by EUR 70 million.

“We want to make the registration as a jobseeker smoother and to include more frequent meetings. We will invest significantly in services, with the aim of adding 1,200 new caseworkers to the TE Offices in order to enable individual job search support,” Minister Haatainen adds.

Since the beginning of 2017, the TE Offices have interviewed unemployed jobseekers every three months. In the future, interviews would be held every two weeks during the first three months of unemployment. The unemployed have been satisfied with the interviews because they set a rhythm for the job search and provide them with personal service. 

Efficient and versatile interaction with the jobseekers, active employment services and job search monitoring will shorten the periods of unemployment. It is the aim of the reform to employ 9,500 additional people. The reform is intended to take effect at the beginning of 2022.

More clarity and moderation to jobseeker obligations and sanctions

Under the current system, an unemployed jobseeker must apply for jobs offered by the TE Office as a condition for receiving the unemployment benefit. Even now, the employment plan can include quantitative and sufficiently concrete targets for independent job search.

Under the reform, the jobseeker and the TE Office will agree on the quantitative job search obligation and appropriate support services in the individual employment plan. The jobseeker is expected to apply for 0–4 jobs per month depending on the labour market situation in the region and the jobseeker’s work ability.

“I consider it important that unemployed jobseekers can always meet the obligations imposed on them. Jobseekers will not lose their unemployment benefits even if they do not succeed in finding employment”, the Minister stresses.

The focus will shift from obligatory job offers towards more individualised job search. In the future, jobseekers will be better able to choose for which job opportunities they apply. However, the jobs must correspond to the skills of the jobseeker.

“There are many ways to meet the requirement of applying for jobs, for example, writing job applications, contacting employers directly or participating in recruitment events. Unemployment security will remain conditional, but the focus of the obligation will change,” says the Minister.

At the same time, the system of sanctions will become more reasonable. Sanctions on unemployment benefit that relate to job search and services will be staggered by introducing a warning.  After receiving a warning, if jobseekers again fail to fulfil the obligations of the employment plan, they will be sanctioned to lose the benefits for five days and, if this happens again, for 10 days. After a warning and two periods of sanctions, the failure to apply for a job will result in a duty to work.

At the moment, unemployed jobseekers may lose their unemployment benefit for up to two months if they fail to apply for the job offered by the TE Office, regardless of whether they have managed their job search well otherwise. In the current system, more than one offence will also lead to a duty to work.

The maximum duration of benefit sanctions related to other issues besides job search and services may be up to 45 days in the future, compared to 90 days currently.

The changes are intended to take effect in 2022 at the earliest.

The use of pay subsidies to boost employment will be increased significantly

The reform of the pay subsidy system aims to increase its use in companies and to make its use easier for employers.

The provisions on pay subsidies will be simplified by setting the level of subsidy to 50%, irrespective of the length of unemployment (excluding the 100% pay subsidy for organisations). The reform’s objective is to increase the use of pay subsidies in companies considerably. The pay subsidy rate for people with partial work ability will be raised to 70% and their pay subsidy periods will, in particular, be closely linked to other employment services. The pay subsidy rate for organisations will remain at 100%. The amount of career counselling will also be increased and, where possible, combined with all forms of pay subsidies.

The total number of workers hired with pay subsidies is estimated to increase by about 4,500 person-years per annum on average.

The reform is intended to come into force on 1 September 2021.

More suitable services and employment opportunities in the intermediate labour market for people with partial work ability

“For too long we have neglected the willingness and skills of people with partial work ability to contribute to the building of our society. Correcting the problem requires a new way of thinking and operating,” Minister Haatainen says.

The Government has agreed on measures to build a Finnish model for employment in the intermediate labour market, which is based on the experiences from Sweden's Samhall company and the results of the Finnish job bank experiment.

“There are many ways to implement this and the options will become clearer as preparations proceed. The aim is to provide subsidised employment, education or other support for the transition towards the open labour market,” says the Minister.

The purpose of the job bank experiment was to develop a business model for Finland to employ persons in a disadvantaged labour market position. The job bank will find a job for the unemployed either in a company or the job bank.

The Government decided in the budget session to commence a study on the subject. The study will define the content of the Finnish model, the organisation of the activities, the forms of funding and other arrangements necessary for implementation. The EU’s recovery support will be used to start and consolidate the activities. The aim is also to increase the diversity of jobs, the acceptance of differences and the links between employment and social services. In addition, the study will also map out the contacts with private sector service providers. Finally, the reform aims to create a link to the implementation of the linear model of disability pension. The job bank experiment is expected to start in 2022 at the latest. 

Many ways to support youth employment – Ohjaamo centres to play a key role

Low-threshold services to improve mental wellbeing of young people will take place in Ohjaamo centres. The expert resources at Ohjaamo centres will be set at a level that will safeguard individual and multisectoral guidance of clients. The Government will prepare an incentive model based on match funding, which will give municipalities a greater incentive to hire social work and education professionals at the Ohjaamo centres. Funding from the EU recovery support will be used to prepare the model.

The Government agreed on a fixed-term start-up pilot for people under the age of 30. In the pilot regions, employment appropriations will be increasingly used for business training and supporting the early stages of entrepreneurship.

Local collective bargaining on the rise

The Government will seek to increase local collective bargaining based on mutual trust between the parties. Local collective bargaining will be promoted through the system of collective agreements with a view to achieving a balanced combination of flexibility and security, and improving employment and competitiveness. The working group on local collective bargaining will review employment legislation from the perspective of promoting opportunities for local collective bargaining. The proposals to promote local collective bargaining will be prepared by the working group and presented to the Ministerial Working Group on Promoting Employment by 1 March 2021.

Timo Nevaranta, Special Adviser to the Minister of Employment, tel. +358 50 340 9483

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