Written by: Jukka Pello, Attorney — Dottir Attorneys Ltd

Reporting Obligations Removed for Terminations on Financial and Production-Related Grounds

New Legislation Enacted

As of May 1, 2017, the employers no longer have an obligation to notify the Employment and Economic Development Office of any terminations occurring due to financial and production-related grounds. The employers have previously been subject to this obligation when at least 10 employees have been terminated. This change to the Employment Contracts Act also removes the employers’ duty to inform the employees of their right to an employment plan. However, in spite of the aforementioned changes, the employers still have an obligation to notify the Employment and Economic Development Office of the cooperation proceedings in case the employers’ measures may lead to termination, layoff or reduction of a full-time contract into a part-time contract.

Employer Now Entitled to Apply for Compensation for the Costs of Family Leave

New Legislation Enacted

Changes to the Health Insurance Act are effective as of April 1, 2017, entitling the employer to a lump sum compensation of €2,500 to offset costs arising from family leave. This lump sum compensation is paid to the employer of an employee leaving on maternity leave if the following conditions are met: (1) the duration of the employment contract is longer than one year; (2) the employment lasted at least three months prior to the maternity leave; (3) the employee’s working time is at least 80% of full-time employees working in the same sector; and (4) the employer is obliged to pay at least one month’s salary during the maternity leave under the conditions stipulated in a collective agreement or an employment contract. The employer is entitled to the lump sum compensation only if the employee’s period of maternity benefits commences on April 1, 2017, or thereafter. The compensation can be claimed by the employer if a salary has been paid to the employee during the period of maternity benefits. The compensation must be claimed no later than six months after the expiration of the employee´s benefit period.