Coronavirus and labour market issues
Pekka Kärkkäinen, Director, Industrial Relations
Johanna Laine, Legal advisor, Industrial Relations
Memo last updated on 11 January 2021
Table of contents
1. Coronavirus and labour market issues
3. Impediment to work (due to shortage of materials/components)
4. Temporary layoff procedure
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. Safety and preparedness (guide on protection against the coronavirus at the workplace, face masks and tax exemption)
10. Processing of employees- personal data
1. Coronavirus and labour market issues
The situation concerning the coronavirus changes constantly, 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.
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. 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.
Trips, from which travellers have returned between 10 August and 31 September 2020
Since the Government decision on 6 August 2020, restrictions on travel (monitoring of internal and external borders) were reinstated for certain countries due to the worsening coronavirus situation. According to the Government policy, the restrictions could be removed if the number of new infections in the country does not exceed 8 cases per 100,000 people within the last two weeks. Country-specific restrictions are intended to be removed or reinstated depending on the situation of the epidemic in the country. An accurate and up-to-date list of the travel restrictions on different countries, i.e. the permitted and high-risk countries, has been published on the websites of the Border Guard as well as the Government.
Based on the decisions and instructions issued by the Government between 6–13 August 2020 and Government and the Finnish Institute for Health and Welfare (THL) on 8 August 2020, those returning to Finland from high-risk countries (= countries with valid travel restrictions) were subject to either quarantine ordered by an authority or otherwise voluntary quarantine; the rules of self-quarantine were stricter and did not allow people to go to their workplace, among other things. As from 27 August 2020 the self-quarantine has been applied to travellers arriving in Finland from countries classified orange or red (as of 19 September red or grey) in the Finnish Institute for Health and Welfare’s (THL) traffic light model.
If an employee returns from a personal trip or a trip ordered by the employer to a high-risk country (as of 27 August this means orange or red countries and as of 19 September red or grey countries) and is ordered into quarantine by an authority, the employee has the right to be absent from the workplace, provided that a certificate on the quarantine order by the authority is delivered to the employer. The quarantine period is usually 10 days. Official quarantine cannot be shortened by taking coronavirus tests. However, the employee is obliged to be available to the employer during the quarantine and work remotely, for instance, if work is possible in the quarantine conditions and is within the scope of the employer's right to supervise work, or if an agreement on work has been made and the employee is not ill. The employer is obliged to pay wages during remote work. If the employee does not work during the quarantine, Kela, the Social Insurance Institution of Finland, has the primary responsibility to compensate for the loss of income. The employer only pays wages pay to the employee if the infectious disease allowance paid by Kela does not fully compensate for the employee’s loss of income for some reason.
If an employee returns from a personal trip or a trip ordered by the employer to a high-risk country (as from 27 August this means orange or red countries and as of 19 September red or grey countries) and is not ordered into quarantine by an authority, the employee must remain in self-quarantine under the stricter rules, if the employer follows the instructions of the authorities and implements the travel and occupational safety and health policy at the workplace in accordance with the instructions. The length of self-quarantine is 10 days, but it can be shortened by taking coronavirus tests.
- If this is a personal trip by the employee, it means that the reason for not being able to work after returning from the trip is due to the employee (the consequences were caused by the employee), and no obligation to pay wages exists. However, wages must be paid if the employee works during the stricter self-quarantine, if the parties have agreed on a paid leave, or if the employer has ordered the employee to stay out of work at the employer’s own discretion, regardless of the authorities’ instructions. This applies to all personal trips, from which the travellers return on 10 August or later. The time when the trip started does not matter.
- If this is a trip ordered by the employer and the work cannot be done in the conditions of the stricter self-quarantine such as remotely, working is prevented for a reason due to the employer and the employer is obliged to pay wages.
When returning to Finland from a permitted country (as from 27 August this means green countries), there are no obstacles to going to work/working after the trip due to the instructions by the authorities, and the employee can go to work as usual.
GOVERMENT DECISION OF 11 SEPTEMBER 2020 ON RESTRICTIONS ON BORDER TRAFFIC
On 11 September 2020, the Government adopted a decision on the temporary reintroduction of border control at internal borders and on the restriction of traffic at the external borders. The decision entered into force on 19 September 2020 and continued until 18 October 2020, after which it was extended - according to the Government's latest decision, the restrictions on entry into the country are maintained until 13 December. By this decision, the Government changed the limit value for the incidence of COVID-19, confirming that the higher incidence countries and regions would include those where the incidence of new cases has exceeded 25 new cases per 100,000 persons in the previous 14 days. The Government assesses the need for and scope of entry restrictions weekly on the basis of the epidemiological situation and changes the list of countries accordingly.
On the basis of the above, entry restrictions (risk countries) changed for example on 11 September for some countries while restrictions may be (re)introduced for some countries. The lifting of restrictions means that travellers can enter Finland from these countries without a special reason and do not have to be quarantined. Similarly, if entry is restricted, travellers can only enter Finland for a valid reason. The clauses on quarantine, self-quarantine and the employer’s obligation to pay wages, given above in section “Trips, from which travellers return between 10 August and 30 September 2020”, relate to these situations.
Trips, from which the travellers return as from 1 October 2020
In its session on 11 September, the Government adopted a resolution on a new testing-based approach in order to implement a hybrid strategy for border traffic and travel. The aim was to lift restrictions on entry while at the same time combating the COVID-19 pandemic at borders.
The introduction of the new model will require legislative changes and various measures to ensure health security upon entry. The model was intended to be deployed by 23 November 2020. However, the preparation of compensatory measures of internal border control was still ongoing at the end of the original deadline.
In the transitional model (from 1 October to 22 November 2020), restrictions on entry and the recommendation on self-quarantine have remain valid. In addition, during the transitional period it has been recommended that travellers who came to Finland from higher incidence countries or regions presented a certificate of a negative COVID-19 test taken less than 72 hours prior to arrival. Travellers could have ended their self-voluntary quarantine upon receiving a negative result from a second COVID-19 test taken 72 hours after entry at the earliest. A second test and self-quarantine were not required for a stay of less than 72 hours. The employer's obligation to pay wages is determined by the same principles as those stated above in section “Trips, from which travellers return between 10 August and 30 September 2020” (it is still decisive whether the employer complies with the guidelines of authorities and has required that the employees do the same).
When returning to Finland from higher risk countries, Finnish citizens and permanent residents have not be asked to present a foreign test certificate. They could have shortened their self-quarantine by taking a test on arrival in Finland and taking a second test after 72 hours at the earliest.
The model for the transitional period included a number of special arrangements. The most important of these concerned enabling work and other daily interaction between border communities at the northern land border and enabling ferry and air travel to Estonia and Sweden for work without a test certificate or quarantine requirement, as long as the regional disease situation remained roughly equivalent, regardless of the incidence rate in the countries.
Trips from which the travellers return as from 23 November
On 19 November, the Government decided to extend the restrictions on entry into the country until 13 December 2020. The restrictions have been subsequently extended and they remain in force until 9 February 2021. Up until now, the guidelines of health authorities and principles on employer’s duty to pay wages are as before.
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 layoffs.
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 layoffs 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. Temporary layoff procedure
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.
The fixed-term amendments of five-day minimum negotiation time and five-day notification period for temporary layoffs expired on 31 December 2020. Since the beginning of the year 2021, the normal rules for the co-operation negotiation period and the notification period for temporary layoffs, as set out in the applicable collective agreement, apply.
Through local bargaining, the notification period for temporary layoffs (excluding collective bargaining agreements for senior salaried employees in the consulting sector and the sheet metal and industrial insulation 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 layoff is given, the exact start time of the layoff must be stated in the notification. Also, the grounds for the layoff and (estimated) duration of the layoff must be indicated in the notification.
In addition, the employer and the employee may agree on a temporary layoff 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 layoff 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 layoff 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 layoff 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.
Absence from basic education or early childhood education and care
Pupils in pre-school education, basic education or in other education based on the Finnish Basic Education Act must attend such education unless they are not granted a temporary exemption from compulsory school attendance for a special reason. Illness or a pupil or pupil’s family member who belongs to a risk group with regard to the risk of infection is an acceptable reason for absence, but it also requires an acceptable report, which in practice means a physician’s assessment on the necessity of the absence. The foregoing policies apply also to early childhood education (day care).
A principle of employee’s right to an unpaid absence from work due to a reason comparable to a compelling family reason in order to arrange the necessary care for a child under 10 years of age may be applied in the foregoing situation based on a physician’s assessment. If the parent of a child has managed to negotiate with the school to grant the child a right to be absent from school for other reasons or has decided that the child is staying home from early childhood education, then the parent’s own absence from work because of the child is not considered to be comparable to compelling family reasons.
8. Remote work
On 15 October 2020 the Government decided on the national recommendation for remote work. The Government recommends that employees work remotely as extensively as possible if their duties so allow. Employers are responsible for assessing how best to coordinate remote and on-site work at their workplaces. Employers should also promote work arrangements that reduce close contacts and other risk factors for employees. The recommendation on remote work remains in force until further notice
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. Safety and preparedness
Guide on protection against the coronavirus at the workplace
Technology Industries of Finland and the Confederation of Finnish Industries (EK) have together prepared an information package for protection against coronavirus in the workplace. The guide for safe work, services and transport is available here and on Työsuhdepalvelu.fi website of Technology Industries of Finland.
Issues covered by the guide include, for example:
- How can the risk of infected people entering the same physical premises and infecting others be minimised?
- How can the risk of spreading infections be minimised by providing adequate arrangements for physical distance?
- How can the risk of spreading infections among people who normally work in or visit the same premises be minimised by providing adequate arrangements for temporal distance?
- How can the risk of infection through droplet or contact infection be minimised by effectively cleaning the premises and surfaces as well as taking care of personal hygiene?
- How can employees, customers or passengers be protected with protective equipment solutions and how can they use these solutions to protect themselves?
The practices described in the guide are recommendations and examples of good practice, and each company is responsible for assessing which ones are appropriate for their own operations and how they should be implemented. The guide will be updated as necessary as the situation, official instructions and recommendations change.
In addition, further multiform material related to coronavirus is available on the websites of the Centre for Occupational Safety (TTK), Finnish Institute of Occupational Health (FIOH), Finnish Institute for Health and Welfare (THL) and the Finnish Government.
Face masks and taxation
Employers are not obliged to pay their employees for the face mask recommended by the authorities for use on public transport. The face masks that an employer may offer their employees do not generate taxable income.
10. 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.