What is a zero-hours contract?
Variable working hours must reflect workload
Work must not stop completely for no reason
Employee may influence work shifts
Zero-hours contracts have become an integral part of the labour market. As the use of zero-hours contracts has proliferated, legislation has introduced restrictions on their use to protect employees from their downsides. This article provides an overview of such legislation in Finland.
What is a zero-hours contract?
In its most basic form, a zero-hours contract is an employment contract that does not guarantee an employee any minimum weekly working hours. Instead, the employee's regular working hours may range from zero to the agreed maximum. Quite often, the weekly maximum is set at 40 hours, which is equal to a full-time employee's working hours. The employee and the employer may also agree on a lower maximum amount.
In most cases, the rules governing zero-hours contracts capture not only zero-hours contracts but any arrangements where the employee's contractual working hours vary. Accordingly, an employee whose contractual working hours may vary, for example, between 10 and 30 or 20 and 40 hours per week falls within the scope of the rules, even though the employee's working hours would never reach zero. The decisive factor is not variance as such but whether the employee knows in advance how many working hours they will be assigned. If the employee's working hours vary but average to a specific weekly amount over a certain period, the employee does not fall within the scope of the rules concerning zero-hours contracts, because the employee is guaranteed a certain total amount of work.
Variable working hours must reflect workload
The first rules concerning zero-hours contracts were added to Finnish legislation in Summer 2018. The rules stipulate that a zero-hours contract may be concluded on the employer's initiative only if its need for workforce varies. The regulation includes a similar flexibility concerning fixed-term agreements and always allows the use of variable working hours when such an agreement is made on the employee's initiative. An employee whose schedule varies a lot – for example, because they are also studying – can choose variable working hours if the employer wishes to offer such an arrangement. However, the employee does not have a unilateral right to demand variable working hours.
If the parties agree on variable working hours, the employee's minimum working hours must be set so that all regularly available working hours are covered. If the employer's need for workforce varies, but the employer needs someone to work at least 10 hours each week, the employee cannot be offered a contract where their working hours could be zero on some weeks. Instead, the employee must be offered at least a minimum of 10 hours per week even if their total working hours may vary.
The employer is obliged to monitor the employee's actual working hours during the employment relationship and to ensure that the agreed minimum working hours reflect its actual need for manpower. When the rules were introduced in 2018, employees were given the right to ask their employer to review their working hours if the employees thought that there was consistently more work available than the agreed minimum amount.
The rule was changed in August 2022; now, employers must constantly monitor working hours. Each employer must review all contracts with variable working hours at least once a year and assess whether the need for workforce has changed such that the employees' minimum working time should be increased. If the actual working hours and the employer's future need for workforce show that there is regularly more work available than previously thought, the employer must offer the employee the opportunity to increase their minimum hours to reflect the changed situation. However, the legislation does not give the employer the right to decrease the employee's agreed working hours, even if it turns out that there is not that much work available. The agreed minimum working hours can only be reduced by undertaking a dismissal procedure and, in companies with at least 20 employees, consulting with employees.
Work must not stop completely for no reason
In zero-hours contracts, the biggest concern has been that such contracts circumvent the rules protecting employees as the employer need not officially terminate the employment if it can merely stop offering work to the employee. This potential drawback was tackled with the legislation that came into force in August 2022, which gives the employee the right to demand written reasons from the employer if the employer stops offering the job completely. The obligation formally applies to all contracts with variable working hours, but in practice only true zero-hours contracts may trigger the obligation to provide reasons as the requirement is that the employee is not offered any working hours.
Employee may influence work shifts
Following the changes to the legislation in August 2022, the employer must define the days and hours when the work is typically available and communicate them to all employees with variable working time contracts. To the extent that the employer is obliged to provide the employee any working hours, those should be primarily placed within the typical working times communicated to the employee. As long as the hours do not exceed the agreed minimum and the hours are placed within the typical working times, the employer may assign such hours to employees without asking whether the employee accepts them. If the employer cannot arrange the agreed minimum working hours within the typical working hours, the employer is obliged to offer the employee work outside the typical working hours, but the employee has the right to refuse such shifts.
Assigning to an employee more working hours than the agreed minimum always requires the employee's consent. There are no formal requirements for the consent. In the simplest form, the employee consents to additional hours merely by accepting the proposed work schedule. The employee can, however, also consent to work more than the employee's minimum hours during a specified time period. For example, the employee can announce in advance that they will accept all offered working hours on weekdays between 10 o'clock in the morning and 6 o'clock in the evening. If the employee has notified the employer that they will accept certain additional hours, the employer does not need to ask separately whether the employee accepts a work shift; the employer can simply assign shifts to the employee.
Sometimes, the need for additional workforce may emerge after the employer has already announced the work schedule for the relevant period. In this case, any additional hours offered to the employee shall be treated as extraordinary working hours and the employee's consent is always required to perform such work. However, such work constitutes overtime hours only if the employee's total working hours exceed the daily or weekly limit (ie, eight hours per day and 40 hours per week unless an applicable collective agreement provides for different limits). At the outset, the employer should ask for the employee's consent every time the employer assigns extraordinary work hours to the employee. However, the employee and the employer can agree temporarily that the employee shall accept any additional hours that are available, but such an agreement may cover only a short period, typically no more than a few weeks.
For further information on this topic please contact Jouni Kautto at Waselius & Wist by telephone (+358 9 668 9520) or email ([email protected]). The Waselius & Wist website can be accessed at www.ww.fi.