Browse through brief employment and labor law updates from around the globe. Contact a Littler attorney for more information or view our global locations.

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COVID-19: Temporary Amendments Extended until December 31, 2020

New Order or Decree

Authors: Emma Mäkeläinen, Associate and Samuel Kääriäinen, Partner – Dottir Attorneys Ltd.

All the temporary amendments made to the employment legislation, such as shortening the cooperation consultations period from 14 days to five days, since April 1, 2020, remain in force until the end of 2020. The amendments have aimed to help businesses adjust to changes in demand for labor caused by the COVID-19 pandemic.

Supreme Court Ruling on Negotiation Obligation and Employees’ Right to Be Heard and Informed During Cooperation Proceedings

Precedential Decision by Judiciary or Regulatory Agency

Authors: Emma Mäkeläinen, Associate and Samuel Kääriäinen, Partner – Dottir Attorneys Ltd.

According to Finnish law, the employer shall discuss the planned measures with all employee groups whose work may be reduced due to the measures. If the employer has planned separate measures that might affect several personnel groups, it may be appropriate to discuss such measures in one cooperation proceeding. However, there is no provision in law that would obligate the employer to discuss separate measures in the same cooperation negotiations even if the measures were arising from same ground or were planned at the same time.

On August 13, 2020, the Supreme Court assessed whether the employer had fulfilled its negotiation obligation when it had organized two separate cooperation proceedings. The Supreme Court ruled in favor of the company, stating that the employer had the right to organize separate proceedings. Further, the court stated that the employer was responsible for organizing the negotiations in such a way that the employees' representatives were informed and given the opportunity to express their views on the options for planned measures, also in so far as the negotiations raised issues related to both negotiations. In this case, the same employee representatives attended both negotiations so the personnel’s right to be heard and informed was not endangered.

Supreme Court Ruling on Termination of Employment and Reassignment

Precedential Decision by Judiciary or Regulatory Agency

Authors: Emma Mäkeläinen, Associate and Samuel Kääriäinen, Partner – Dottir Attorneys Ltd.

Under the Finnish Employment Contracts Act, the employer may terminate an employment relationship only if there is an appropriate reason and may not do so without first considering whether the employee can be reassigned to another position. In a recent case, the employee worked as a financial secretary in the service of the city. The employee had been sentenced for aggravated embezzlement, which the employee had committed while acting in a position of trust in a trade union (e.g. during free time).

On September 30, 2020, the Supreme Court ruled in favor of the employer, noting where the lack of trust between the employee and the employer has been caused by the employee's criminal conduct, the seriousness, quality and manner of the crime must also be acknowledged in the assessment. Here, the employee’s conduct constituted such a serious breach of employment that the employer could not reasonably be expected to continue the contract.

Noncompete Agreements: Extended Obligation to Pay Compensation

Proposed Bill or Initiative

Authors: Emma Mäkeläinen, Associate and Samuel Kääriäinen, Partner – Dottir Attorneys Ltd.

The Ministry of Economic Affairs and Employment of Finland has set up a working group to investigate the need to limit the unnecessary use of noncompetition clauses. The current employment legislation requires an employer to pay compensation to an employee in relation to the use of noncompetition agreement only if the period exceeds six months. Thus, the parties may agree on a post-employment noncompete up to six months without any compensation. In order to agree on post-employment noncompete, there must be a particularly weighty reason based on employer’s need to keep trade secrets or to special training given to the employee as well as on the employee’s position and duties.

According to the initiative, the noncompetition regulation does not fully reflect the changes in the working life and the parties quite often agree on the noncompete even if there is no such reason. Such noncompete would not be valid but cause unnecessary uncertainty. The working group has been preparing the necessary draft provisions in order to extend the obligation to pay compensation to all noncompetition agreements. The proposal will be submitted to the Finnish parliament during the autumn 2020.