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published on 24 March 2020 | reading time approx. 7 minutes
All companies are affected by the corona virus and the attempt to slow down its spreading. In this newsletter we have compiled information that is good to take into consideration. The Finnish government decided to activate the Emergency Powers Act, which can result in significant changes within a short time. We are monitoring the situation constantly.
The government has also decided on some support measures relating to taxes. The tax authorities will give more information as soon as it is available and we will inform our clients immediately.
Remote work is recommended wherever it is possible. In this way we can reduce the number of people working on company premises, even if some members of staff need to be physically present. Companies are advised to draw up instructions and prerequisites for remote work. Those instructions should include e.g. the following topics:
If an employee suspects to have been infected with the corona virus, he/she should stay home immediately and contact the work health care or local health care station by phone.
The waiting period for sick day allowance from Kela (Finland’s Social Security Institution) is 1+9 days and starts, when the employee has informed the employer about his/her sickness directly or with a nurse’s note. In case that the inability to work lasts for a longer time, a doctor’s note is required.
Wages payment during sick leave:
If the employee has been ordered into quarantine by the authorities in accordance with the Communicable Diseases Act, he/she is entitled to Kela’s ‘sickness allowance on account of an infectious disease’. The amount of this sickness allowance is equal to the lost wages. The employer is reimbursed for the amount of wages paid to the employee.
Please remember to inform our payroll department about absences, and to agree about filing applications to Kela.
Employees are entitled to absence from work, if the Employment Contracts Act’s regulations (or the collective labor agreement’s requirements) for temporary child care leave are met. Requirements include for example that the child is under 10 years old. The absence from work can last up to four days. Normally salary is paid up to three or four days. If the employee is not covered by any collective agreement, there is no salary payment.
While an employee is caring for a sick child, he/she can do remote work, if this has been agreed with the employer. In that case, the employer is obliged to pay the employee salary in proportion to the working time. An employee caring for a sick child can also, for example, take holidays or other leave or switch shifts with another employee, if this has been agreed with the employer. While caring for a sick child, employees are entitled to Kela’s ’sick allowance on account of an infectious disease’, if their under 16-year old child has been ordered into quarantine by the authorities, and this is preventing the employee from doing work. The amount of ‘sickness allowance on account of an infectious disease’ is equal to the lost salary.
This regulation of the Communicable Diseases Act does not give the employee the right to stay away from work. The right to stay away from work is determined by the regulations of the Employment Contracts Act and the collective labor agreement’s regulations. The ‘sickness allowance on account of an infectious disease’ can be paid to the employer for the salary that has been paid to the employee, provided that the employee has not done remote work.
If a school or daycare center is closed due to corona virus, but the child is healthy, the employee can stay home. He/she has a right to be away from work, if the requirements of the Employment Contracts Act’s for absence due to compelling family reasons (or the equivalent requirements of a collective labor agreement) are fulfilled.
The employer is not obliged to pay salary to an employee, who is absent due to compelling family reasons.
An employee can stay home with their child and do remote work, if this has been agreed with the employer. In this case the employer is obliged to pay salary in proportion to the work time. The employee can also, for example, take holidays or other leave or switch shifts with another employee, if this has been agreed with the employer.
The employee is not entitled to Kela’s sick allowance on account of an infectious disease.
The employer cannot order an employee into quarantine, nor can they forbid an employee from travelling during their free time. Only recommendations can be given, and decisions about work travel. If an employee has acted against the public authorities’ recommendations, it should be evaluated, whether or not the employee has caused their own sickness through reckless negligence. In that case there is no obligation to pay salary for the time of the sick leave.
If wages would have to be reduced in order to safeguard the company's ability to continue operating, the company should have financial and operative grounds for dismissal.
The employer and the employee can agree on a reduction of wages. This must be agreed individually with each employee, preferably in writing. Wages cannot be negotiated below the minimum wage of a collective agreement. Neither can the law’s overtime or Sunday pay be dismissed (exceptions under preparation concerning critical professions, such as employees in health care sector). Collective agreements may include a so-called crisis clause, which would allow specific measures to be taken in a difficult economic situation.
According to the Employment Contracts Act and employer has to inform the employees about temporary lay-offs at least 14 days before the lay-offs start. However, employer and employee may agree on temporary lay-offs without a 14-day notice period, if the employer’s activities or financial situation requires it. In addition to that, collective labor agreements may contain provisions about the possibility to interrupt lay-offs, so it’s always a good idea to check the agreement.
The start of the lay-offs can change only by cancelling the lay-offs and giving a new notification of lay-offs. Together employer and employee can agree on changing the start of the lay-offs. Already announced lay-offs can be cancelled before the start at any time.
If your company’s ability to operate is weakened due to corona, consider initiating the lay-off proceedings immediately, or consider other arrangements, such as taking holidays.
In case 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. From employer’s point of view this means limiting the salary payment obligation to 14 days, without having to effectuate temporary lay-offs or terminations.
The preconditions for seizing the salary payment are strict. As a starting point the work and/or entry to work place must be totally prevented (due to order to close the facilities or lack of critical mans of production, as an example), and the employer is not able to reorganize the work otherwise.
Coronavirus does not mean an automatic passport to seizing the salary payment, but as the situation developes, this may become relevant in more and more cases.
If your company has more than 20 persons in a work relationship on a regular basis, your company is obliged to follow the co-operation negotiation laws. If the employer considers measures that can result in the dismissal of employees move to part-time work, or temporary lay-offs on financial or operative grounds, a proposal for co-operation negotiations must be submitted to the personnel no later than five days before the start of the negotiations. Both employer and personnel are represented in the negotiations. As a general rule, the negotiations are conducted by representatives. Both parties can choose their own representatives. In general the staff representative in the co-operation negotiations is a shop steward or a trustee in accordance with the Employment Contracts Act. The negotiator may also be a labor safety inspector, a special co-operation representative or other representative or representatives selected by the staff on a negotiated basis.
Minimum negotiation period is either 14 days or 6 weeks, depending on the planned actions and employees oncerned.
Here are some measures that can be taken in order avoid a crisis and ensure a company’s liquidity:
Coronavirus: What you need to know
Timo Huhtala
Head of Legal & Tax (Finland), Attorney at Law (Finland)
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Rödl & Partner in Finland
