Alternatives to giving notice and layoffs
Due to the situation caused by coronavirus, the content of this page may not be up to date. Up-to-date information is available at Federation of Finnish Enterprises’s website Kaikki koronasta yrittäjälle (only in Finnish).
Giving notice or laying off employees must never be the primary solution when business is quiet. Try to avoid these by offering other work or training to your employees. Also take advantage of working hour arrangements and flexibility.
The Employment Contracts Act requires that you find out whether it is possible to offer other work within your company to the employee instead of lay-offs or giving notice. If there are vacancies in your company, offer them to the employee, if possible.
Note that the work you offer should as a rule correspond to the work defined in your employee’s employment contract. You must therefore not transfer your employee to work of a lower value if work comparable to the employee’s previous work is available. If such work is not available, offer the employee other work corresponding to the employee’s education, professional skills or experience.
If necessary, arrange training for the new work you are offering to the employee.
If you cannot offer permanent full-time work to the employee, offer fixed-term of part-time work, if possible.
If your company has places of business elsewhere in Finland, you should offer work in them to the employee. If you own other companies, find out if they can provide work for your employee.
In a poor employment situation, you can also offer your employees training instead of lay-offs or giving notice. Providing training is a way of investing in your company’s future as it increases your employees’ skills and improves your company’s competitiveness.
You can arrange supplementary or further training related to the work tasks of your employees. You can also provide training at a more general level by improving their basic skills, such as IT skills. In addition, you can train your employees for entirely new work tasks.
You can organise training either jointly for the entire personnel or only for one or a few of your employees. Find out in advance how motivated and committed your employees are to the training. Choose the topics of training so that they benefit your company.
You can apply for example to the ELY Centres for financial support to organise the training.
If your company uses a working hours bank, you can postpone or mitigate lay-offs or terminations of employment or even avoid them completely by rearranging working hours. A working hours bank gives your company and employees considerable flexibility in seasonal work and the opportunity to even out seasonal variation in your business.
With the help of the working hours bank, your employees can save hours they have worked, the time off they have earned and the holiday or overtime pay they have converted into time off.
Your employees accumulate hours in the working hours bank by working long days when your company is busy. When your company has less work to offer, your employees can use the paid days off they have accumulated in the reserve.
The order of using the hours saved in the reserve is not monitored and there is usually no deadline for their use. Your employees can thus use the hours they have saved in the working hours bank over many different calendar years.
Your company can avoid giving notice and laying off employees also by planning the dates of annual leave. You can agree with your employees that they will as a rule take their annual leave when your company can offer little work. Similarly, they will work when a lot of work is available.
If the amount of work in your company has diminished temporarily, you can agree with an employee on bringing their annual leave forward. You can also agree on postponing the leave if there is more work than expected.
You can also negotiate moving or saving part of the annual leave for a later date, when less work is expected.
Always give your employees the opportunity to express their opinions regarding the dates of their annual leave. However, the final decision on the dates is made by your company. Let the employee know the leave dates at least one month before the beginning of the leave.
You can encourage your employees to exchange their holiday bonuses, overtime pay and performance bonuses for days off. This way your company can save money and your employees can have time off when there is less work.
You can agree on average working hours, which means that the weekly working hours are averaged to 40 hours at the most over 52 weeks. In that case, your employees can work longer hours within the limits determined in the collective agreement when there is a lot of work and shorter hours when there is less work.
If your employees have unused days of reduction leave, you can order those days to be taken when there is less work. You can also negotiate the possibility to take the hours saved in the flexible working hours arrangements as time off during quiet periods with your employees.
If there are other companies operating in the same sector in your company’s operating area, discuss establishing a labour pool with them. You can then lend your employees to the other companies when your own company has less work to offer. Correspondingly, you can borrow additional workforce from them as necessary.
Note, however, that the collective labour agreement you apply may have regulations concerning conversion of monetary benefits into time off and the use of working hours arrangements.