The Supreme Court 2010:43 – Group of companies considered a single employer entity for redundancy process
The Sisu group had been unprofitable during 2004 and 2005
causing an employee in a subsidiary company to be made redundant on
financial and production-related grounds in accordance with the
Employment Contracts Act (55/2001). The employee that was made
redundant was almost immediately replaced with another employee
previously employed by another company in the Sisu group.
The fact that the subsidiary that made the employee redundant was
profitable had no legal relevance in determining the legality of
the redundancy. Although three different companies belonged to the
group, Sisu had acted as a single employer entity and therefore was
allowed to reduce the number of employees in its subsidiaries on
grounds relating to the financial situation of the whole Sisu
group. The Supreme Court considered that Sisu group's business
was run in a manner that made it reasonable to consider the group
of companies a single employer.
The Supreme Court 2010:20 - Subsidiary company was liable where its
workforce consultation was not being completed prior to parent
company's decision to centralise production
A foreign parent company (Fujitsu Siemens Computers (Holding) BV)
had made a decision to centralise production in the group, which
required the reduction of 450 employees in the Finnish subsidiary
company's (Fujitsu Technology Solutions Oy) operations.
In its decision, the Supreme Court asked for a preliminary ruling
from the Court of Justice of the European Union (Case C-44/08) and
interpreted Finnish labour law in the light of Directive 59/98/EC
on collective redundancies. According to the Supreme Court, the
final decision of the parent company was made prior to the
negotiations in the subsidiary company as a result of which the
redundancy procedures infringed the provisions of the Act on
Co-Operation within Undertakings (725/1978). Fujitsu Technology
Solutions Oy was ordered to pay approximately 2,500.000 EUR as
compensation to various trade unions in accordance with the Act on
Co-Operation within Undertakings (725/1978).
Previously there was no express rule of law which required a
foreign parent company to delay its decision until a Finnish
subsidiary company has fully complied with its obligation to
organise consultation negotiations with the employees or their
representatives concerning planned re-organisations.
Legislative changes
The Act on Consultation Ombudsman (216/2010) came
into force on 1 July 2010
The Consultation Ombudsman works in conjunction with the Ministry of Employment and the Economy in supervising compliance with acts referring inter alia to consultation within undertakings, personnel representation in the administration of undertakings, and personnel funds.
The Consultation Ombudsman's activities primarily consist of providing guidelines and instructions for the application of the law, but the Consultation Ombudsman also has the right to bring criminal investigations, if necessary.
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