Assessment of the grounds for dismissal should observe the number of employees in an enterprise

On 8 November, the Finnish Government submitted to Parliament a proposal to amend the Employment Contracts Act with regard to the section on termination grounds related to the employee’s person. The amendment would take into consideration that small employers may have fewer resources to bear the consequences if an individual employee breaches or neglects his or her duties arising from the employment relationship.

“Assessing the grounds for dismissal should always involve an overall assessment of a number of different issues. In the future, this assessment should better consider the number of employees in an enterprise,” Minister of Employment Jari Lindström says.

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.

Arbitrary dismissals would be banned even in the future

Dismissal would be possible only on proper and weighty grounds in the same way as now. Serious breach or neglect of obligations arising from the employment contract or the law and having essential impact on the employment relationship as well as such essential changes in the conditions necessary for working related to the employee's person as render the employee no more able to cope with his or her work duties could be considered an acceptable reason for dismissal.

Arbitrary dismissals would be banned even in the future. The list of prohibited grounds for dismissal in the Employment Contracts Act would still apply to enterprises of all sizes. 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.

Shorter qualifying period for benefits

The Government also proposes to reduce the qualifying period for benefits from the current 90 days to 60 days in cases when the employer terminates an employment relationship for reasons related to the employee’s person. There would be no qualifying period if an employer terminates an employment relationship for other reasons than reprehensible conduct.

Labour market organisations involved in the drafting process

The Government invited the labour market organisations on 26 October 2018 to examine the rationale for the government proposal on a tripartite basis together with representatives of the Ministry of Economic Affairs and Employment. The representatives of the Ministry of Economic Affairs and Employment and the organisations in this unofficial working group reached an agreement on the content of the rationale on 5 November 2018.

The amended act is due to come into force on 1 July 2019.

The legislative proposal can be accessed on the website tem.fi/paatokset.

Questions and answers on easier dismissal in small enterprises (In Finnish, the English version will be updated later.)

Inquiries:
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
Nico Steiner, Senior Specialist, Legal Affairs, tel. +358 29 50 49001
Timo Meling, Senior Specialist, Legal Affairs, tel. +358 29 50 49084 (amendment to the Unemployment Security Act)