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Politics - 18.09.2018 klo 09.00

Making dismissal easier in small companies would be a risk: Already many disputes

PAM’s administrators are contacted around 50,000 times a year. Small companies are over-represented in the disputes they handle. Photo: PAM archive

The Finnish government plans to make it easier to dismiss workers for personal reasons in companies with less than 20 people. PAM’s statistics show that there are already relatively more disputes in small companies than in large ones – even the current laws and collective agreements are not properly applied everywhere.

There are relatively more disputes of various types in small service sector companies than in large companies, according to data for 2017 in PAM’s dispute register. Whereas around 36 per cent of PAM’s members work in companies with less than 20 workers, 43 per cent of the disputes handled by the union related to workers in these companies. The total number of disputes was 892.

You can also work out that if you are employed in a small company it is around a third more likely than for a worker in a large company that a problem will emerge that develops into a dispute.

At PAM, the general feeling among administrators dealing with disputes is the same as what the statistics tell: as they see it there appear to be relatively more disputes in small companies than in large ones, also in the longer term. According to PAM’s Chief Negotiator Juha Ojala, one reason could be that some small companies do not know the laws and collective agreements well enough. Small companies often do not have a dedicated human resources manager or other specialist in employment matters, he explains.

PAM members contact the union around 50,000 times a year on labour relations issues. Just under a thousand of these cases –892 last year to be exact – are recorded as disputes. And of these a couple of hundred a year go all the way to court. Around half of both these groups are related to redundancies.

Earlier this spring PAM's President Ann Selin said that the government’s proposal would shift the enterprise risk to employees whilst the effects on employment appear uncertain. Besides, researchers have also expressed their disbelieve in the effects of employment.

“Modern leadership is about giving people more of a feeling of security than uncertainty. Then they will give the best input, they commit to the company and can plan their own lives”, Selin said on the Yle Ykkösaamu programme.

The Finnish government announced in its round table session in April that it intends to introduce separate legislation to make dismissals easier in small companies with less than 20 people. The intention is to lower the dismissal threshold in situations where the reason for dismissal is personal reasons, but the exact content of the forthcoming draft law is not yet known. The government claims that this is a means to lower the threshold for companies to take on staff, but in a recent press release PAM condemned the government’s plans as ineffective and because they will increase inequality.

This is an updated version of the news, which was originally published on 18 april, 2018.

uutisen-teksti: Tuomas Lehto