Finland: New Rights for Zero-Hour Employees

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By Marcus Hoy

Companies would be allowed to employ workers on “zero-hour” contracts only if they can demonstrate that their need for labor is variable and unpredictable, under proposed changes to Finland's Working Hours Act (605/1996) published July 7 by a government working group. Under current law, few restrictions exist governing when workers can be employed without guaranteed working hours.

In 2015, Statistics Finland estimated that approximately 83,000 employees were working on zero- or limited-hour contracts, a majority of whom were women.

The draft proposal would also allow employees working on zero-hour contracts—under which employees are expected to be available for work at any time, but the employer does not commit to providing them with any minimum number of working hours—would be allowed to turn down shifts without negative consequences under certain circumstances—for example, if the employee has already agreed to work for another employer during the time in question or has another compelling reason to refuse.

Employers would also be legally obliged to offer zero-hour employees an estimate of the amount of work anticipated, provide them with standard sick pay and with salary during their notice period, and when practical allow them to determine their own working time and place of work, while the employer would define the tasks, goals and deadlines.

The proposal is now open for comment with a deadline of Sept. 1, 2017.

The Details

According to attorney Johanna Haltia-Tapio of the Hannes Snellman legal firm, the main changes related to zero-hours contracts are:

  •   Employers may only require employees to work on zero- or limited-hour contracts if a genuine reason exists for them to do so. Such contracts can only be used in cases where the amount of work varies unexpectedly and irregularly, making a fixed-hour working schedule impossible. The reason for the zero- or limited-hour arrangement should be specified in the contract, and if the situation changes, the employer may be required to offer the employee a fixed-hour contract.
  •   The employee will be entitled to salary during sick leave. As with the general sick-leave rules, the number of paid sick days will depend on the duration of the employment relationship, and sickness pay will be based on the employee's regular salary.
  •   The employee's salary during the notice period will at a minimum correspond to his or her average salary during the preceding 12-week work period, regardless of how many hours are worked during the notice period.

“The use of zero- or limited-hour contracts is not in our view increasing in Finland, but it is relatively widely used, especially for seasonal workers and within the retail, healthcare, hospitality, and restaurant sectors,” Haltia-Tapio told Bloomberg BNA. “The legal provisions regarding such contracts are currently limited and inadequate, meaning practices and interpretations have varied.”

“The understanding was that the government would proceed with the proposal as it stood if the members of the working group were unanimous in their recommendations,” she said. “However, as the group could not agree on a number of matters, the proposal will likely require further amendments before a law is drafted. However, despite the disagreements, strong political will exists to renew the Working Hours Act and also find a solution regarding the issue of zero-hour contracts.”

“If the amendment is realized in accordance with the current proposal, it is likely that companies will need to revise their HR policies,” she said. “It is also likely that some companies will need to limit their liberal use of zero- or limited-hour contracts. Furthermore, the wording of existing contracts would need to be revised, as the current wording may in many cases not be enforceable as such.”

Potential Lawsuits

In a July 26 statement, Mika Karkkainen, senior advisor at the Confederation of Finnish Industry, told Bloomberg BNA that his organization opposes the legislation in its present form.

“We think that the proposed measures will be bad for the economy,” he said. “We believe that they will hamper new job creation by making it more difficult for employers to hire people. There is no evidence that the use of zero-hour contracts is increasing.”

“Flexible working-time arrangements are beneficial to businesses that need substitute staff at short notice or experience unforeseeable changes in their labor needs,” Karkkainen continued. “A survey conducted a couple of years ago showed that most workers on such contracts are satisfied with their working time arrangements.

“Our criticism has been particularly directed against the plan to limit the use of zero-hour contracts to situations where a fixed working time cannot be determined. This proposed rule would also cover other kinds of contracts with variable working time, including part-time contracts where an employee is regularly asked to work extra hours. This means that an employer who regularly asks employees to work additional hours could potentially face a lawsuit. If the employer is not in compliance with the proposed limitations on the use of variable working time, the employee can ask a court to order the employer to guarantee them contractual working time.”

“If this law is passed, the new legal requirements will be of concern to all employers with workers on part-time and zero-hour contracts,” Karkkainen concluded. “Employers would have to deal with increased legal uncertainty.”

No date has yet been given for the proposal's enactment into law, and Haltia-Tapio told Bloomberg BNA that it would take effect in 2018 at the earliest.

To contact the reporter on this story: Marcus Hoy in Copenhagen at correspondents@bna.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com

For More Information

The proposal is available in Finnish here, an unofficial English translation here.

For more information on Finnish HR law and regulation, see the Finland primer.

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