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Legislative amendment to ease firing on personal grounds
An amendment to the Employment Contract Act will make dismissals on personal grounds easier.
The report of the tripartite working group established by the Ministry of Employment and the Economy was published on Monday 24 February. The legislative amendment is particularly important to small companies.
“Making firing easier will lower the threshold for hiring and encourage business owners to employ people,” says the specialist Albert Mäkelä, who represented Suomen Yrittäjät, the Finnish SME association, on the working group.
The basis for the working group’s deliberations is the programme of Prime Minister Petteri Orpo’sGovernment, which envisions an objective reason being enough for the termination of employment, instead of the current objective and compelling reason.
“It’s extremely important that the amendment is not limited to changing a single word. Instead, the parts of the Act about grounds for dismissal and the warning procedure need to be extensively rewritten. In future, the regulation of employment termination will be clearer,” Mäkelä says.
In its report, the working group proposed amending the Employment Contract Act to more broadly describe the types of employee behaviour that would entitle their employer to dismiss them.
“It would be impossible to describe all the possible grounds for termination in the Act exhaustively. However, the new section expresses more clearly what kind of employee behaviour could be grounds for termination. This improves legal certainty,” Mäkelä says.
Less risky recruiting
Small businesses, in particular, often consider recruitment risky. Indeed, the aim of the amendment is to remove barriers to hiring and strengthen SMEs’ operating conditions.
“A bad hire can be fateful for a small business. Easing firing will reduce the risks of hiring and thus improve the opportunities for small businesses, in particular, to grow and hire,” Mäkelä says.
An entirely new section of the Act would be about underperformance. At present, shortcomings in work performance are often insufficient grounds for dismissal if the employee does not actually neglect their duties.
Firing would also be easier in situations in which an employee has previously acted blamefully and a new breach shows the same kind of neglect, even if it is not exactly the same behaviour.
“As it stands, when an employee neglects lots of small things, that’s not enough to sack them, even though on the whole the employee’s behaviour negatively affects the operations and output of the workplace,” Mäkelä says.
Dismissal cannot be arbitrary
Dismissing an employee would continue to require an overall evaluation which would have to consider the gravity of the employee’s behaviour and other considerations affecting the matter. Dismissal would not be possible for an arbitrary or minor reason. The premise would be the issuance of a warning before dismissal, even if the grounds for dismissal could be met more easily in future without a warning.
“When an employer hires someone, the last thing they want to have to do is sack them. They want to hold on to good employees. A dismissal is always a failure for an employer,” Mäkelä says.
The working group did not reach a unanimous conclusion. Suomen Yrittäjät and the Confederation of Finnish Industries submitted a supplementary statement to the report containing observations for further legislative work.
The working group’s report is in the consultation stage until 7 April. The intention is for the legislative amendment to enter into force at the start of next year.
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