Weaker emplo­y­ment security for smaller companies

One of the expressed goals of the right-wing Govern­ment is to improve the prerequi­sites for the opera­tion of small and medium-size under­ta­kings. Paradoxically, the new legis­la­tion might have the opposite impact.

Jenni­veera Tabell, a lawyer for the Industrial Union, says in an inter­view for this magazine (in Finnish, see page 8), that the situa­tion of smaller compa­nies will not improve for the better due to the new legis­la­tion. On the contrary, in some cases it might even turn out worse if emplo­yees looking for better emplo­y­ment security opt to work for bigger companies.

Right now, the act on Co-opera­tion within Under­ta­kings stipu­lates that it should be applied in compa­nies with at least 20 emplo­yees. The Orpo-Purra govern­ment is raising the limit to at least 50 employees.

The treat­ment of emplo­yees would be based on the emplo­yer’s kindness and own volition.

Such a big rise would mean that given the changing situa­tions affec­ting a company at any given time a large number of emplo­yees would be left outside some of the legal rules protec­ting emplo­yees, she says.

– Thus, the treat­ment of emplo­yees would be based on the emplo­yer’s kindness and own volition, Tabell says.

In Finland, accor­ding to the figures of 2022 by Statis­tics Finland, there are 550,000 compa­nies with less than 20 emplo­yees. However, these figures include 185,000 self-employed, who seldom employ other people.

Currently, there are hundreds of thousands of emplo­yees outside the rules stipu­lated in the Co-opera­tion Act. If by raising the level of required emplo­yees to 50, accor­ding to Statis­tics Finland, some 200,000 emplo­yees more will slip out of the regula­tions set under current law.

Law demands negotiations

The law states when the employer must begin negotia­tions, how to proceed and for how long the negotia­tions must take.

The employer must follow the law carefully and emplo­yees shall be heard. If this does not happen, the law includes sanctions for emplo­yers. Without obliga­tory negotia­tions, the employer can quite freely present motiva­tions for changes and redun­dancies as emplo­yees do not have the relevant infor­ma­tion concer­ning the company’s true financial situation.

The Orpo-Purra Govern­ment will also scrap the duty to re-engage dismissed workers in businesses with fewer than 50 emplo­yees. The duty applies when an employee has previously been made redun­dant for reasons related to company economy or production.

If the employer needs inside 4 months an employee for the same or similar tasks to those of the redun­dant employee, the work must first be offered to the redun­dant employee. He or she has no obliga­tion to take the job. But, in case of a missing job offer, the employee might have the right to compensation.