THE FINNISH LABOUR COURT RECENTLY ISSUED A DECISION CONCERNING TERMINATION ON COLLECTIVE GROUNDS AND THE EMPLOYER'S DUTY TO RE-EMPLOY DISMISSED EMPLOYEES
- Impact date: 23 February 2012
In Finland, employers cannot terminate a permanent employment contract without a proper and weighty reason. The Finnish Employment Contracts Act (55/2001, as amended) (the ECA) provides that the employer may terminate the employment contract if the work available has diminished substantially and permanently for financial or production-related reasons or for reasons arising from the reorganisation of the employer's operations.
However, the employment contract cannot be terminated if the employee can be placed in an alternative role or trained for other duties. The employer has an obligation to offer work and provide training. The ECA also obliges the employer to offer re-employment. This means that the employer has to offer work to redundant employees if the employer needs new workers for the same or similar work within nine months after the end of the employment contract. This obligation applies only to employees whose employment relationships were terminated on collective grounds. To fulfil this obligation, the employer has to contact the labour authorities in the region where the vacancies have arisen, and inquire whether any of the redundant employees have registered as job seekers.
In a decision given on 23 February 2012, the Labour Court considered whether an employer had legal grounds for terminating three employees' (A, B and C) employment relationships and whether the employer had fulfilled its obligation to offer re-employment. The employer had terminated the employees' employment relationships on financial and production-related grounds. The employees were released from the obligation to work during their notice periods. However, during A, B and C's notice period and immediately after it, the company experienced a sudden improvement in its operating situation. Due to the sudden improvement in their flow of work, the employer was in a rush to employ new workers. Therefore, the employer employed ten new fixed-term employees for the same or similar work which A, B and C had previously performed.
Following termination, A had registered as a job seeker at the local labour authority. In the court hearing, A stated that he had given his new phone number to his former line manager. However, the employer had not recorded it as it was a private number. The employer tried to obtain his contact information through the telephone directory and tried to reach A by 'phone. The employer also asked the local labour authorities whether A was still registered as a job seeker, but the labour authority did not inform the employer whether A was still seeking a job. Despite their efforts, A did not receive the employer's job offer. A did not contact his former employer, despite having heard that his former employer was employing new workers.
The employer had also tried to contact B and C, whose notice periods were still running. The employer had also tried to find out if B and C had new phone numbers through the telephone directory. After these attempts failed, the employer gave up trying to contact B and C.
As regards A, the court found that the employer had fulfilled its obligation to offer re-employment and had done everything that could be reasonably expected of it in the circumstances. As for B and C, the court decided that the employer's actions were not adequate in the circumstances. The court found that B and C could have been contacted by relatively small efforts and within a reasonable time. This could have been done, for example, by sending them a letter. Because these efforts were neglected by the employer, the employer had violated its obligations arising from the collective bargaining agreement and the ECA, and thus the employer did not have valid collective grounds for terminating B's and C's employment relationships.
The employer was required to pay compensation to B (a total of EUR 14,990) and C (a total of EUR 21,230) for unlawful termination of their employment relationships.
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