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By Marcus Hoy
Finnish employers should be aware of the potential costs associated with a new legal obligation to provide post-redundancy healthcare, an attorney at the Bird & Bird legal firm tells Bloomberg BNA. In an April 18 statement, Lotta Kumpuniemi said that recent amendments to the Occupational Health Care Act (1383/2001) could potentially impose significant new costs on employers.
Under the act, all Finnish employers have a duty to provide preventive healthcare services to employees with the aim of improving the work environment and increasing productivity. This can include individual medical exams and group physical activities. In addition to these statutory requirements, some employers offer supplementary healthcare on a voluntary basis as part of a package of benefits offered to employees. This may include free access to doctors and therapists.
In effect since Jan. 1, the amendment requires employers to continue to offer employees the same healthcare services offered during employment, including any services originally classed as voluntary, for six months following termination of employment. For the requirement to apply, the employee must have been made redundant on economic or production-related grounds and have worked for the same employer for at least five years. Employers who regularly employ fewer than 30 workers are not affected by the new requirement. The obligation ends if the former employee finds employment elsewhere during the six-month period, provided the new employment contract is valid for at least six months.
“The employer may want to cut these benefits once the obligation to work is terminated for economic reasons,” Bird & Bird said in an April 12 statement. “However, in light of these reforms, the level of the occupational healthcare services should remain the same for employees post termination of their obligation to work.”
The new rules could potentially trigger significant new costs for employers, Kumpuniemi told Bloomberg BNA April 18, and companies seeking to reduce their expenditure may choose to release employees from any obligation to work during their notice period.
“This change entails an extra cost for employers,” Kumpuniemi said. “The minimum level of occupational healthcare is not expensive, but the employer may provide extra health care benefits to employees—for example, the opportunity to see specialists. In principle, the level of occupational healthcare services will remain the same after the termination of the working obligation, which means that the redundant employee may be entitled to very extensive benefits compared to the situation before Jan. 1.”
“The six months' requirement starts from the termination of the working obligation, not from the termination of the employment relationship,” Kumpuniemi said. “The way for companies to cut their occupational healthcare costs would be to release the employee from his or her working obligation directly when the notice period begins. If the employee works until the end of the notice period, the obligation starts running only after that.”
“It should also be stressed to employees that they are obliged to inform their former employers when they are employed elsewhere,” Kumpuniemi said. “From then on, the new employer is in charge of occupational health care, and the former employer's obligations terminate.”
“It is possible that employers will now become more reluctant to provide healthcare services that are more extensive than the law requires,” Kumpuniemi said. “Especially if they have negative experiences due to redundant employees using these services extensively.”
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