Finnish Supreme Court: Entitlement to enhanced age-based unemployment benefit deemed a justified ground to deny voluntary financial support package

In its judgment KKO:2014:47, the Supreme Court assessed the acceptability of excluding an employee from the employer’s discretionary financial support packages due to his age-based entitlement to extended unemployment benefits as well as the threshold of what constitutes discrimination in such situations. The defendant (the employer) offered financial support packages to employees made redundant, provided that they had failed to find new employment, had not retired or were not in the process of retiring by the expiry of the employer’s 12-month re-employment obligation. The plaintiff, who had a right to extended earnings-based unemployment security until the age of 65 years, but indicated a wish to continue working, did not receive the support package. The plaintiff claimed that the employer’s policy constituted illegal age-based discrimination.

In the Court’s view, the support package placed the plaintiff to a position less favorable than the other employees. However, the Court held that the aim of the support package was to balance the effects of the redundancies and support employees who would otherwise have been solely reliant on regular unemployment benefits. The Court found that in this case there were justified grounds for the aged-based differential treatment. Consequently, the policy in question did not constitute prohibited discrimination or breach of the principle of equal treatment and the plaintiff’s claims for damages was dismissed.

Employers should still be extremely cautious if support packages directed to the employees are distinguished, either directly or indirectly, by employees’ age. From the Court’s reasoning it is not possible to deduct explicitly defined circumstances under which age-based different treatment would not be regarded as discriminatory.

Finnish Labor Court: Employers’ obligation to pay salary during new maternity leave 

In August 2014, the Finnish Labor Court issued three judgments (TT:2014-115, TT:2014-116 and TT:2014-117) in which it held that employees were not obligated to return to work from child-care leave in order to get salary during a subsequent new maternity leave. The cases concerned the technology industry sector, the health care service sector and the commercial sector.

The applicable collective bargaining agreements provide that an employee is entitled to receive her salary during the three first months of maternity leave. However, the collective bargaining agreements either set out explicitly, or have been interpreted to mean, that the employee must return to work between the maternity leaves in order to be entitled to for the latter maternity leave. As the employees in question had been on a child-care leave when they commenced new maternity leave, their employers had refused to pay salary during the new maternity leave.

The employees considered that the employers’ interpretation violated EU-legislation, claiming their salary for the new maternity leave. The Labor Court requested a preliminary ruling from the Court of Justice of the European Union (“CJEU”) in two of the cases (C-512/11 and C-513/11). The CJEU held that the provisions of the collective bargaining agreement or their interpretation were not compliant with the Parental Leave Directive. The Labor Court followed the CJEU’s reasoning and ordered the employers to pay the employees maternity leave salary for the new maternity leave.

Most Finnish collective bargaining agreements include similar maternity leave provision or have in practice been interpreted to entitle employees to maternity leave salary only if the employees are in active duty when commencing the maternity leave. As a consequence to these new cases, the parties to collective bargaining agreements will have to remove or amend the existing clauses and/or adopt a new interpretation. It can also be expected that further employees will claim their maternity leave salary retrospectively. Further, claims for compensation due to breach of the Equality Act cannot be excluded either. The Helsinki Court of Appeal found in a similar case that the provisions of a collective bargaining agreement requiring an employee to work at least six months prior to she could get new paid maternity leave, violated the Equality Act. The Court of Appeal imposed the employer a EUR 10,000 compensation payment for breach of the Act. The decision is not, however, final yet.

Finnish Labor Court: Employee may be given a possibility to resign as an alternative to unilateral termination by the employer 

In its decision TT:2014-110, the Finnish Labor Court assessed the grounds for termination and validity of employee’s voluntary resignation. In the matter at hand, it was alleged that an employee had misused, by logging on via remote connection prior to actually arriving at work, the employer’s time management system used to track employees’ working hours. Upon becoming aware of such alleged misuse, a manager called the employee in for hearing in which the employee did not deny the misuse. The manager implied that the employment contract would be terminated in any case, but allowed the employee to choose whether it would be done by the employer or voluntarily by the employee.

The employee signed a notice of termination in the hearing but later claimed that the resignation was invalid as it had been done, amongst other things, under duress.

The Court held that the employer had weighty grounds for contemplating termination of the employment and taking into consideration the regularity and the long duration of the employee’s misuse, termination by the employer would not have required a prior warning. The Court further held that the employer had not acted inappropriately by giving the employee an opportunity to resign voluntarily. The Court also held that it had not been shown that the termination of employment would have taken place under circumstances, which would constitute grounds for its invalidation. Accordingly, the Court considered the employment contract validly terminated by the employee and dismissed the employee’s claims for damages. 

It is thus not unjust to place the employee in a position of having to choose how the employment is terminated, assuming that the employer has adequate grounds to terminate the employment.