Amendments to the Posted Workers Act to promote equal treatment of employees and equal competition between companies

The Government proposes amendments to the Posted Workers Act that promote equal treatment of local and posted employees with regard to working conditions, and equal competition between companies.

Amendments proposed to national law would implement the amendments made to EU legislation. Finland’s current regulation already complies with the requirements of the amending directive on posted workers regarding the compulsory extension of the scope of application to other sectors besides the construction sector. In addition, the existing national law guarantees equal treatment of posted agency workers with national agency workers.

Employer’s obligation to compensate for travel, accommodation and meal expenses

The amendments proposed by the Government concern

• more detailed guidelines on pay provisions applicable to posted workers;
• restrictions to the employer’s right to set off receivables against an employee’s salary;
• a new provision for making pay comparisons according to which any payments made by the employer of an uncertain nature would be regarded as compensation for expenses and not as wage or salary;
• extension of applicable collective agreements in transfers within a  subcontracting or corporate group;
• application of the same accommodation quality requirements to posted and local workers;
• additional employment conditions to be applied in long postings of  more than 12 months; and
• the employer’s obligation to compensate the posted worker’s travel, accommodation and meal expenses incurred during travel from the worker’s regular workplace in Finland during the posting.

The amendment would introduce a protection provision concerning travel and accommodation costs arising from the person’s posting to Finland. The provision would apply in situations where the posted worker is not entitled to protection on the basis of the law, standard practice or employment contract of the country of origin, or the protection would be substantially below what is considered normal and reasonable for the work in question in Finland. The proposal reconciles the level of protection in the country of origin, protection agreed in the employment contract, and protection in the country of employment.

In addition, the amendment would expand the duty to provide information.  In the future, companies would be required to make an advance notification of all posted workers.  Conversely, efforts will be made to reduce the administrative burden of companies related to posting by revising the notification system.

The terms of employment of posted workers continue to be determined by law and generally binding collective agreements.

Amendments to enter into force at the end of July

The legislative amendments were prepared by a tripartite working group appointed by the Ministry of Economic Affairs and Employment. The Government proposes that the amendments enter into force on 30 July 2020, by which time the amending directive will have to be implemented. Amendments concerning prior notification of posting would enter into force after the completion of technical revisions on 1 October 2021.

The Government proposes a 12-month transition period for agreements concluded before the entry into force of the Act. This would give companies an opportunity to make adjustments to their agreements reflecting the legislative amendments.

The Government decision is available at tem.fi/paatokset (in Finnish).

Inquiries:

Päivi Kantanen, Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 295 048 938