Coronavirus and labour market issues
Pekka Kärkkäinen, Director, Industrial Relations
Johanna Laine, Legal advisor, Industrial Relations
Memo last updated on 27 March 2020 15 pm
Table of contents
1. Coronavirus and labour market issues
2. Travel bans
3. Impediment to work (due to shortage of materials/components)
4. Shortened temporary lay-off procedure (5+5 or 5+5+5)
5. Derogation from cooperation negotiations (YTL 60 §)
6. Quarantine, isolation and decisions on absence from work (definitions, compensation for loss of income, annual leave)
7. Situations involving children
8. Remote work
9. Processing of employees- personal data
1. Coronavirus and labour market issues
The situation concerning the coronavirus changes almost on an hourly basis, which is why this memo does not even attempt to provide a comprehensive and real-time overview of all possible situations that the spreading of the virus could cause in society and at workplaces. Up-to-date information can be found, for example, on the websites of the Finnish Institute for Health and Welfare (THL), the Finnish Institute of Occupational Health (TTL), Kela, Finnish Government, the ministries, Confederation of Finnish Industries (EK), Business Finland and Office of the Data Protection Ombudsman.
2. Travel bans
Nations across the world have imposed travel bans and have restricted the entry of foreigners. In a number of countries travellers arriving from Finland will be quarantined for 14 days. Suspensions of regular flight connections/routes and cancellations of return flights are announced daily. The Ministry for Foreign Affairs and embassies no longer provide new guidance on travel restrictions and prohibitions on entry. When travel is necessary, travellers of should follow the instructions provided by the authorities of the country of destination.
If a (flight) passenger is prevented from returning home because of a travel ban and the employee is unable to return to work, this is considered a force majeure event. The employer’s obligation to pay wages depends on whether the person is travelling for work or leisure.
In the case of a business trip, the employer is obligated to pay the wages for the time the employee is prevented from returning from a work-related trip. In such situations, the employer also pays compensation for any additional costs, such as accommodation for extra nights and, as expenses compensation, daily allowances. However, if the travel is related to leisure time, the employer is not obligated to pay wages or pay compensation for additional costs, and the absence is deemed to be a permissible unpaid absence.
Returning from travel between 12.3. - 16.3.2020
According to the guidelines provided by authorities on 12 March 2020, the primary principle is that travel abroad should be avoided altogether and, in case an employee travels, the employee cannot be allowed to enter the workplace for two weeks. Even before these guidelines were issued travelling to epidemic areas was discouraged.
If the employer has decided to comply with the guidelines of authorities and implements at the workplace a travel and occupational health and safety policy that is in line with the guidelines, the impediment to work after returning from a trip is not attributable to the employer or to unforeseen exceptional reasons but to the employee, as the employee is aware of the consequences in advance. As the impediment to work is attributable to the employee and the employee is not incapable for work, there is no obligation to pay wages. This applies (1) to travel that is taken at the employee’s own initiative and begins after authorities provided the guidelines on 12 March 2020 and for which the return takes place before the directions of authorities provided on 16 March 2020 and (2) to travel to epidemic areas that started earlier and was taken at the employee’s own initiative and for which the return takes place after the guidelines of authorities provided on 12 March 2020 but before the directions of authorities provided on 16 March 2020.
However, if the employer, at its discretion, orders the employee to not to come to work after returning from abroad, the employer is obligated to pay wages.
Travel-related rules should be discussed at the workplace in detail, and the policies/consequences concerning travel should be communicated to personnel in advance.
Returning from travel after 16.3.
The Government has declared a state of emergency in Finland over the coronavirus outbreak and has decided on additional measures that will remain in force until 13 April 2020. The Government advises not to travel at this time and has decided that the Finns and permanent residents in Finland returning from abroad will be instructed to place themselves in quarantine-like conditions for two weeks. Necessary travel for work across the borders is allowed.
If the return from a trip that is taken at the employee’s own initiative takes place after 16 March 2020, the employee must place him/herself in quarantine-like conditions and inform the employer of absence from work/of being prevented from coming to work. The employee must agree on the date of his/her return to work and on possible absence arrangements. Primarily, the impediment to work is attributable to the employee and there is no obligation to pay wages unless the employee and the employee agree on remote work, annual leave or other paid time of absence.
Employees who are returning from work assignments/business trips (ordered by the employer) after 16 March must place themselves in quarantine-like conditions for two weeks. If the employee is not incapable of work, he/she must be at the employer’s disposal during this time. If the reason for the impediment to work is attributable to the employee, there is no obligation to pay wages. If the work cannot be performed in quarantine-like conditions, for example remotely, or the reason for the impediment to work is attributable to the employer, wages must be paid. The parties should agree on necessary arrangements before work assignments/business trips.
3. Impediment to work (due to shortage of materials/components)
Under the Employment Contracts Act, (chapter 2, section 12, subsection 1), the employer is required to pay the employee full pay if the employee has been prevented from working by circumstances for which the employer is responsible. The reason for the impediment may be an immediate result of the employer’s actions or negligence, such as the failure to procure supplies or raw materials. Secondly, circumstances or events that are only indirectly attributable to the employer are deemed to be reasons for the impediment to work that are attributable to the employer, and the employer is required to eliminate their effects on work if this can be done with reasonable measures. The foreseeability of the impediment is also relevant. In these situations, the employer should consider temporary lay-offs.
Chapter 2, section 12, subsection 2 of the Employment Contracts Act lays down provisions on impediments to work due to reasons not attributable to the employer and employee. If the employee is prevented from working due to a fire, an exceptional natural event or another similar event affecting the workplace beyond the control of the employee or the employer, the employee is entitled to pay for the period of the impediment, though not for more than a maximum of 14 days. The above-mentioned refers to events whose effect extends to the workplace and that are unexpected and similar to accidents by nature. For calculation purposes, the two-week period is considered to start from the time work is actually impeded as a result of the impediment. The employer may not resort to temporary lay-offs in such situations.
Regardless of the different wordings, the amount of pay can be deemed to be the employee’s time wages, excluding any Sunday compensation, shift bonuses or similar special compensation. Under chapter 2, section 12, subsection 3 of the Act, the employer may deduct from the pay due to the employee any amounts that the employee has saved because their work performance has been impeded (e.g. travel expenses) and amounts the employee has earned doing other work or chosen intentionally not to earn.
Are materials and components that were not obtained due to the coronavirus epidemic a reason that is attributable to the employer or a reason that is beyond the control of the employer?
In general, coronavirus does not directly constitute a reason not attributable to the employer, as referred to in the Employment Contracts Act, because there are too many steps between the coronavirus and the impediment to work. Normally, companies have “reasonable” possibilities to prepare for a change of suppliers, which means that problems with the availability of materials and components are probably no longer unexpected. The situation may be reconsidered in individual cases if the materials or components imported from epidemic areas are unique or if they have been tested and certified as a part of the manufacturing process, for example, through a long approval process.
If work at the workplace is considered to be impeded due to a reason beyond the control of the employer, as referred to in chapter 2, section 12, subsection 2 of the Employment Contracts Act, the employer may not avoid the obligation to pay wages (for a period of 14 days) by changing the working hour system, for example, by ordering employees to use accrued days off or by temporarily laying off people who are impeded from working. The provision on the employee’s right to be paid during the impediment to work, for a maximum of 14 days, is a mandatory provision.
If the impediment to work at a workplace is deemed to be a situation referredthe to in chapter 2, section 12, subsection 1 of the Employment Contracts Act, with the reason being attributable to the employer, the payment of wages may be suspended through the lay-off procedure.
4. Shortened temporary lay-off procedure (5+5 or 5+5+5)
In principle, companies to which the Act on Co-operation within Undertakings is applied must conduct co-operation negotiations before reducing workforce. The employer may initiate co-operation negotiations (only) when there is sufficient certainty regarding the grounds for the negotiated issues and the related facts so that the effects to the personnel can be evaluated.
Teknologiateollisuus has agreed on fixed-term amendments of the notification period for temporary lay-offs and the minimum time for the cooperation negotiations to several collective agreements. The new minimum time for the cooperation negotiations prior to temporary lay-offs is 5 days, and the new notification period for temporary lay-offs is 5 days. The changes are valid
- for the collective agreements for technology industries (employees) and the ore mining industry as of 20 March 2020
- for the collective agreements for senior salaried employees in technology industries and in the consulting sector and for the employees in IT service sector as of 23 March 2020
- for the salaried employees in technology industries as of 24 March 2020
- for the salaried employees in the consulting sector as of 27 March 2020.
The new 5-day co-operation negotiation period also applies to co-operation negotiations that have started before the new shortened negotiation period came into effect. As far as the collective agreement of salaried employees in the consulting sector is concerned, this means that cooperation negotiations must continue for 5 days as of 27.3. unless a 14-day or 6-week negotiation period is not completed by then. For the other collective agreements, it is sufficient that the parties have negotiated for 5 days at the date when the shortened negotiation period took effect. The validity of the new negotiation and notification periods is coupled to the expiry of the corresponding new amendments to the employment legislation.
Contrary to the other collective agreements (5+5), under the collective agreement of salaried employees in the consulting sector a 5-day invitation period as set out in the cooperation negotiation act must be respected (5+5+5).
In the sheet metal and industrial insulation industry the negotiations are conducted in accordance with the local bargaining procedure set out in the collective agreement (no minimum negotiation period), and the notification period for temporary lay-offs is 5 days.
As for the collective agreement for salaried employees in the consulting sector, normal negotiation and notification periods must be respected.
Through local bargaining, the notification period for temporary lay-offs (excluding collective bargaining agreement for senior salaried employees in the consulting sector) and the co-operation negotiation period may be agreed to be shorter than the periods set out in the collective agreement.
When the notification on a temporary lay-off is given, the exact start time of the lay-off must be stated in the notification. Also the grounds for the lay-off and (estimated) duration of the lay-off must be indicated in the notification.
In addition, the employer and employee may agree on a temporary lay-off when it is necessary due to the operations or financial situation of the employer.
5. Derogation from the co-operation negotiations
The co-operation negotiation process may be derogated from in situations referred to in section 60 of the Act on Co-operation within Undertakings.
Under the Act on Co-operation within Undertakings, the employer may decide to reduce workforce without co-operation negotiations if there are particularly weighty unforeseen reasons that cause harm to the production or service operations or the finances of the company which hinder the co-operation negotiations.
The Finnish employer and employee union confederations agree that a sudden and significant reduction in demand for a company’s products or services due to coronavirus in consequence of which the company is faced with a need to temporarily lay-off a significant number of the company’s employees, constitutes an exceptional situation as provided in section 60 of the Act on Co-operation within Undertakings. Even so, the use of this exceptional procedure must always be based on a case-by-case evaluation.
Nevertheless, the employer’s responsibility to implement the co-operation procedure is not totally eliminated even in such situations. When the grounds for the derogation from co-operation obligations cease to exist, the employer must without delay initiate co-operation negotiations on the issues in question, with the grounds for the exceptional approach/procedure also clarified in the negotiations.
6. Quarantine, isolation and decisions on absence from work
Definitions According to the Communicable Diseases Act (related to an order given by a physician)
Quarantine refers to isolating a person, who has been exposed to or is justifiably suspected of having been exposed to a pathogen, to the confines of their home or some other designated location.
Isolation refers to treating a person, who is infected or is justifiably suspected of being infected, in a public health care unit in such a manner that the spread of the infection is prevented.
In order to prevent a generally hazardous communicable disease from spreading, a physician referred to in the Act may make a decision on absence from work concerning a person who is infected or justifiably suspected of being infected or on absence from school or day care concerning a person’s child who is infected or justifiably suspected of being infected.
Compensation for loss of income
A person who is ordered to stay away from their gainful employment or is ordered into isolation or quarantine to prevent the spreading of a communicable disease, is entitled to receive communicable disease allowance as compensation for the loss of income, as laid down in the Health Insurance Act. The same applies to the guardian of a child under the age of 16 if the child is ordered into quarantine or isolation or to stay away from the school or day care, and the guardian is for this reason prevented from working.
No deductible or maximum duration is applied to the communicable disease allowance, and it fully compensates for the loss of income due to absence from work, isolation or quarantine. The daily allowance of an employee is determined based on the pay the employee would have received had they been working.
The decision on absence from work, quarantine or isolation is made by the municipal physician in charge of communicable diseases or, for quarantine and isolation, the hospital district’s physician in charge of communicable diseases. The daily allowance referred to in the Act on Communicable Diseases may be paid to persons who are ordered to be isolated or quarantined in the EU area, EEA countries, Switzerland or United Kingdom. A medical certificate on the quarantine or isolation provided by a doctor having the right to decide on such restrictions in the country in question is required.
Kela has the primary responsibility for compensating for loss of income. According to established guidelines, the employer is responsible for paying sick pay to an employee, when the employee has been ordered to be quarantined even though the employee is not incapable for work due to the illness. In practice, this stance means that the employer has a subsidiary responsibility to pay sick pay to the employee, if necessary, in addition to such communicable disease allowance with which the loss of income is not, for some reason, fully compensated.
Situations where an employee is willing to be absent from work by their own decision when they suspect that they have been exposed to coronavirus are not covered by the Communicable Diseases Act. In this case, the person is not paid compensation for loss of income, even if the absence from work is allowed. Similarly, the employer may create policies according to which employees are required to be absent from work as a precaution to prevent the spreading of coronavirus. In this case, the impediment to work is attributable to the employer, and the employer must pay the employee’s wages. In addition to the above-mentioned examples, a situation may arise where the corona policy of the employer’s customer means that work is impeded at the customer’s site. If the employer of a seconded employee has no other work that can be offered, the employer must consider the lay-off procedure.
Depending on the collective agreement and in line with the procedural provisions in the collective agreement and legislation, worktime shortening leave/accrued days off (pekkanen) and annual holidays may be scheduled for the period of lay-off notice or quarantine ordered by the employer.
Under the Annual Holidays Act, working days and working hours during which the employee is prevented from working due to orders given by authorities to prevent the spreading of a disease are comparable to time spent at work.
The annual holiday pay for hourly-paid employees to which the 35-hour earning rule is applied is calculated based on percentage. The total pay used as the basis for the calculation is determined by also including the calculated wages not received for certain absences, for example, in the case of a quarantine ordered by authorities.
The employee’s right to transfer their annual leave, as laid down in the Annual Holidays Act, is not applied to situations in which the impediment to work is based on an order regarding a quarantine, isolation or absence from work, as referred to in the Communicable Diseases Act.
7. Situations involving children
An employee’s child is ill
When an employee’s child falls ill, the right to be absent from work and the obligation to pay wages are determined based on the applicable collective agreement (cf. children under 10 years of age and children 10 years and older). If the collective agreement includes no such provisions, the employee has the right to be absent if the criteria referred to in chapter 4, section 7 (absence for compelling family reasons) are met.
The employee’s child is healthy but ordered to be quarantined
If the child is healthy but ordered to quarantine, one of the guardians may be deemed to have the right to be absent due to a reason comparable to a compelling family reason in order to implement the purpose of the quarantine and to arrange the necessary care for the child. In such situations, the parent of a child under the age of 16 is paid sickness allowance on account of an infectious disease under certain conditions. In principle, the employer has no obligation to pay wages.
A school or day care is closed, the child is healthy and not ordered to be quarantined
If the municipality has not arranged a substitutive place for care or studying, one of the guardians may be deemed to have the right to be absent due to a reason comparable to a compelling family reason in a situation where schools or day care are closed. In practice, the right to be absent applies when arranging the necessary care for a child under 10 years of age. The employer has no obligation to pay wages.
8. Remote work
On 12 March 2020, the government of Finland recommended work to be carried out remotely in work duties for which that is possible.
Technology Industries of Finland, the Federation of Professional and Managerial Staff (YTN), the Association of IT Sector Employees (Tietoala) and Trade Union Pro recommend agreeing on the use of remote work for all work for which that is possible for the duration of the coronavirus situation. Collective agreements concluded by unions include recommendations and guidelines concerning remote work that can be applied in this connection.
9. Processing of employees’ personal data
The legislation related to the processing of personal data must also be considered when processing the personal data of employees in relation with coronavirus.
The employer and the designated persons who process health data in connection with their work duties are bound by confidentiality obligations regarding the health information of employees. If an employee of an organisation is diagnosed to have a coronavirus infection, the employer may not, as a rule, name the employee in question. However, the employer may provide the other employees general information on the (potential) infection and instruct them to take precautions and, for example, work remotely. If necessary, the employer may communicate to external parties at a general level and in accordance with the company’s policies that the employee is prevented from carrying out their work duties.
Information on the employee having returned from a risk area or that the employee is in quarantine (without providing any further details on the reasons) is not health information.
EK recommends that the employers would consult the respective occupational health care provider or other health care professional on all measures the employer deems necessary to survey the conditions of personnel or people visiting the company premises, instead of gathering such information on their own. This does not restrict inquiries related to the application of the employer’s travelling bylaws (such as those related to a person’s travel destinations), if the inquiries do not contain surveys regarding state of health.