The Finnish Parliament has approved changes to the Finnish Annual Holiday Act as part of the reforms aimed at reducing the costs of the public economy. The amendments will come into effect on 1 April 2016.

Limitations on holiday accrual during family leave 

At present, employees accrue their annual holiday also during maternity leave, special maternity leave, paternity leave and parental leave, as well as during temporary child care leave and absence for compelling family reasons. Following the introduction of the amendments, annual holiday will accrue only during the first six months (156 days) of periods of maternity and parental leave and, accordingly, during the first six months (156 days) of paternity and parental leave. In practice, maternity leave (105 days) and paternity leave (54 days) as a whole still accrue holiday. The maximum holiday accrual of 156 days will be reached during the period of parental leave after the maternity leave or paternity leave. Both the mother and the father are entitled to the maximum accrual of 156 days, but it is their choice how they divide up and take the maximum 158 days of parental leave. 

It should be noted that even after the law reform comes into effect, collective bargaining agreements may contain provisions on holiday accrual during periods of family leave that are more favorable to the employee than under the legislation.

Limitations on an employer's entitlement to compensation for annual holiday costs

Currently, the Health Insurance Act provides for certain compensation to be paid to the employer for the costs of annual holiday accrued during an employee's family leave. Following the introduction of the amendment, the employer will be entitled to compensation only for the costs that the employer incurs due to the statutory holiday accrual rules. For example, if the employer is bound by a collective bargaining agreement which provides for more favorable holiday accrual during the employee's family leave, the employer would not be entitled to any compensation from the state for the vacation days that have accrued after the statutory limit of 156 days. 

Limitations on postponing annual holiday due to illness

At present, employees are entitled to postpone their annual holiday due to illness or incapacity prior to or while on holiday. Following the introduction of the amendment, a six-day waiting period applies before an employee is entitled to postpone any vacation days due to illness or incapacity. The six-day waiting period would, however, apply only to annual vacation days exceeding four weeks. 

The reform will require employers to keep more detailed annual holiday records in order to be able to separate vacation days within the four-week limit and vacation days exceeding the four-week limit.

Comments from a Swedish perspective:

No new changes to the Swedish Vacation Act (Sw. semesterlagen) are expected. According to the Swedish Vacation Act, a parent who is on paternity or maternity leave will accrue holiday during 120 days of the paternity or maternity leave period. The relevant period is 180 days for single parents. Moreover, according to the Swedish Vacation Act, if an employee becomes ill whilst on holiday, the employee is entitled to deduct such sick days from the holiday period and use these days at another time, without any special restrictions.