Contact information 

Please notice that PAM and Unemployment Fund helplines are experiencing high call volumes especially in the morning. Answers to many questions is found on our web site.

Membership services

030 100 630 10 am to 2 pm

Employment advice

030 100 625  10 am to 2 pm

Unemployment benefit advice 

020 690 211 10 am to 2 pm

Service hours during summer

The telephone services  in the summer from Monday to Tuesday and Thursday to Friday between 10 am and 2 pm. 

PAM's regional offices will be closed from 5 July until 30 July, except forthe Helsinki-Uusimaa regional office, which is open the whole summer.

Lay-offs and termination 

Lay-offs are a means in the Finnish labour market to help an employer over a difficult period. The employer ceases payment of wages for the period of the lay-off and the employee gets unemployment security.

An employment contract can only be terminated for a factual and compelling reason. The employer's right to dismiss is when the job has been substantially and permanently reduced for economic, productional reasons or reorganization of the work.

On this page you will find answers to the questions below. 

What does a lay-off mean?
Who can be laid off and on what grounds? 
Can an employee on a fixed contract be laid off?
When must a lay-off notice be given to an employee?
What rights does an emloyee have when laid off? 

How does a lay-off end? 
The 90-day temporary layoff is coming to an end - what now? 
An employee is laid off, but their employer wants to end the lay-off and get the employee back to work. What should you do?
Your employer is offering temporary work before a lay-off ends. What should you do? 
If a lay-off is suspended, what should you do about applying for unemployment security? 
An employee has found a new job during while laid off. The lay-off ends, what should you do?  
How can an employee resign during a lay-off? 
How can an employer continue a lay-off? 
Can an employer terminate the employment of a laid-off employee? 

Can employer terminate my employment contract due to the coronavirus? 
I was dismissed. Does the employer have an obligation to offer me a job in the future, for example, next fall? 
Can an employer cancel or terminate an employment contract due to coronavirus if an employee has not yet started working? 
Does the employer have to pay wages, for example for a laid off employee during the period of sick leave? 
If you have annual holiday in the middle of a lay-off, how do holiday pay and holiday bonus affect allowances? 
Where can I apply for money when I have been laid off? 

What does a lay-off mean? 
A lay-off means that an employee temporarily does not work and is not paid wages by his or her employer. The employment relationship remains in force, however. This is a better option from the employee’s perspective than termination of employment. 

Who can be laid off and on what grounds?
Coronavirus may cause a reduction in work, so an employer may be entitled to lay off employees. In this case the preconditions for lay-offs and termination of employment must be met. 

Lay-offs apply principally to permanent employees. An employee on a fixed-term employment contract can only be laid off if the employer would be entitled to lay off the permanent employee for whom the fixed-term employee is substituting.

An employee can be laid off for two reasons: 
- when an employer either has grounds for termination of an employment contract for financial or production reasons or
- work or the preconditions for offering work have temporarily decreased for an estimated maximum period of 90 days.

With the corona epidemic, these above-mentioned causes may be met.

An employee can be laid off either for a fixed period or until further notice. Working can be suspended entirely or by reducing working hours. At workplaces with over 20 employees, the procedures in the Act on Co-operation within Undertakings on lay-offs must also be observed.

Can an employee on a fixed-term contract be laid off?  
The legislation was amended temporary 1 April. After this also a fixed-term employee can be laid off due to economic and productional reasons. Before it was only allowed to lay off a fixed-term employee if he/she was a substitute for a permanent employee, which would have been laid off.

An employer is required to treat all employees equally. The work input of a laid-off employee should not be compensated by other employees working more hours. 

When must a lay-off notice be given to an employee? 

The employer must give the employee notice of lay-off no later than 14 days before the start of the lay-off period.
 

What rights does an employee have when laid off?
During a lay-off an employee can accept other work. An employee can also give notice without a period of notice if he or she does this earlier than seven days before the end of the lay-off.

During a lay-off an employee accrues annual holiday. During a lay-off an employee generally accrues annual holiday on a maximum of 30 working days at a time. More information on the accrual of annual holiday can be found here.

During a lay-off employees may not cause harm to their employer, for example reveal trade secrets. 

A laid-off employee is also entitled to at least statutory occupational health care. In connection with co-operation negotiations a shop steward is advised to make sure that usage of occupational health care is entered in the minutes, preferably at a level equivalent to what it was before the lay-off. 

If some employees have been laid off part-time, some on a fixed-term basis and some for an indefinite period, and when the need for work increases, the employer can offer hours in the order he/she want. However, the grounds for offering or not offering works must not be discriminatory.

An employee is laid off, but their employer wants to end the lay-off and get the employee back to work. What should you do?
An employer can decide in what order to invite employees to return to work or offer them temporary work. The basis for offering or not offering work must not be discriminatory.

If an employee has been laid off until further notice, the employer must give the employee at least 7 days’ notice before work starts and the lay-off ends.

If an employee has been laid off for a fixed period, the employer and the employee must agree on how the lay-off is to end. An employer cannot unilaterally end a fixed-term lay-off – a fixed-term lay-off ends when the specified deadline has been met.

It is advisable for the employee to agree to return to work, since refusing work that is offered may affect their unemployment security.

If less work is offered than agreed in the employment contract, a full-time lay-off can be turned into a partial lay-off.

Your employer is offering temporary work before a lay-off ends. What should you do?
If your employer is offering work, the employer must offer the work to laid-off employees. This is then suspension of a lay-off.

If a lay-off is in effect until further notice, the employee and the employer can agree on a temporary suspension. It is advisable for the employee to agree to suspension of the lay-off, since refusing work that is offered may affect their unemployment security.

When the lay-off resumes, no new lay-off notice is required.

If an employee does not consent to agree to suspend a lay-off, the employer can end the lay-off. The employer must give the employee at least 7 days’ notice before work starts and the lay-off ends. When the temporary work ends, a new lay-off notice must be issued.

If a lay-off is for a fixed term and the employer wants to suspend the lay-off to offer temporary work, the employer and the employee can agree to suspend the lay-off.

An employer cannot unilaterally end a fixed-term lay-off. Otherwise a fixed-term lay-off ends when the specified deadline is met.

It is advisable for the employee to agree to suspension of the lay-off, since refusing work that is offered may affect their unemployment security.

If a lay-off is suspended, what should you do about applying for unemployment security?
An employee does not need to specifically tell the unemployment fund if a lay-off is suspended.

If full-time work is still not being offered, in their application for unemployment security the employee enters either the hours or days worked. The unemployment fund then pays either adjusted unemployment allowance or unemployment security for days of unemployment.

An employee has found a new job during while laid off. The lay-off ends, what should you do? 
If an employee has found work elsewhere, they are entitled to terminate the employment contract made with the other employer during the lay-off with 5 days’ notice. A fixed-term employment contract can also be terminated in this situation.

How can an employee resign during a lay-off?
In all the various lay-off variants, an employee can resign during a lay-off without a period of notice if they do this earlier than 7 days before the end of the lay-off. Then the employment relationship ends immediately, and there is no entitlement to pay for the period of notice.

How can an employer continue a lay-off?
If an employer intends to continue an employee’s lay-off beyond the specified date, in various cases new co-operation negotiations must be held. These can be held whilst the original lay-offs are still in place and the lay-off notification period can elapse during the lay-off.

If an employee has returned to work from a lay-off, co-operation negotiations must be conducted in the normal way.
PAM has agreed temporary changes to the deadlines for lay-offs and co-operation negotiations. You can find the deadlines for lay-offs on this page higher up and the deadlines for co-operation negotiations here.

Can an employer terminate the employment of a laid-off employee?
If terminating the employment of a laid-off employee, an employer must comply with the normal procedures for termination of employment: there must be lawful grounds for termination of employment and co-operation negotiations must be conducted if previous co-operation negotiations have only applied to lay-offs.

Co-operation negotiations are not mandatory in companies with under 20 employees, but here too the employer must explain the grounds for termination of employment and the alternatives to the employee concerned or their representative.
If an employer terminates the employment of a laid-off employee, the employee is entitled to their wages and holiday compensation for the period of notice without any deductions in accordance PAM’s collective agreements.

An employer is also required to offer an employee any work that comes available during a period of notice. An employer also has a so-called take-back obligation.  

Can my employer terminate my employment contract due to the coronavirus? 

No. At this stage this is a temporary situation, and an employer may be entitled to lay off employees. Then the rules on lay-offs are to be complied with. You can find the derogating rules on lay-offs here

The employer has the option of terminating an employment contract valid for an indefinite period only if the available job has decreased significantly and permanently (in Finnish). In that case, the notice period specified in the collective agreement or the law must be observed.

If the employer terminates the employee's contract during the lay-off, the employee is entitled to the pay for the period of notice and holiday pay in full due to exceptions to legislation and collective agreements. Normally, an employer is allowed to deduct 14 days of pay if the notice period was more than 14 days. Now the notification times have been temporarily shortened.

In principle, a fixed-term employment contract cannot be terminated at all, but expires when the term ends. The employer can, by the temporary amendment to the law that came into force 1 April, terminate an employment during  his/her probationary time due to productional or economic grounds. Termination during the probationary period does not affect the qualifying period for unemployment benefit or days deductible for unemployment security.

I was dismissed. Does the employer have an obligation to offer me a job in the future, for example, next fall?

 

Yes. An employer must offer work to an employee who has been dismissed on economic and productional grounds if the employer needs employees for a certain period of time after the termination of the employment for the same or similar tasks that the dismissed employee had performed.

Due to the corona epidemic, a deviation was made, according to which the readmission obligation is 9 months if the employee is laid off from 1 April to 31 December 2020. According to a temporary amendment to a collective agreement, an employer must offer work to its dismissed employee on economic and productive grounds if the employer needs employees within 9 months (normally 4 or 6) of the termination of the employment for the same or similar tasks performed by the dismissed employee. The employment relationship ends after the notice period. Termination periods have been agreed in collective agreements. A condition for the readmission obligation is also that the employee is still a jobseeker at the TE Office.

 

In the case of redundancies after 31 December 2020, the readmission obligation is valid for 4 months from the end of the employee's notice period. However, if the employment of the dismissed employee had continued without interruption for at least 12 years, the readmission period is 6 months from the end of the notice period.

Can my employer cancel or terminate an employment contract due to coronavirus if an employee has not yet started working?
An employment relationship only starts when working starts. If an employer cancels a contract, this is not cancellation of an employment relationship but breach of contract. An employment contract is a binding document, and an employer may have an obligation to pay compensation for the damage resulting from cancellation of the employment contract before it starts. In this difficult situation the compensation for damages might be very small  because as soon as the employment relationship had started the employer would have been able to cancel the employment contract for financial and production reasons.  

So the preferable option from the employee’s point of view could be to get advance notice of cancellation of the employment relationship.

Does the employer have to pay wages, for example for a laid off employee during the period of sick leave?
The reason for absence that was notified first determines whether an employer has an obligation to pay wages.

If for example an employee is given a lay-off notice when they are already on sick leave, the employer has an obligation under the collective agreement to pay wages for the duration of the sick leave. The lay-off comes into force after the sick leave has ended.

If, on the other hand, sick leave starts after a lay-off notice has been given, the lay-off comes into force at the notified time and the employer has no obligation to pay wages during sick leave that falls within that time period.

If you have annual holiday in the middle of a lay-off, how do holiday pay and holiday bonus affect allowances?
Annual holiday, holiday pay and holiday bonus can reduce your allowances if you are laid off. How they are affected depends on whether the holiday and related payments have been accrued from full-time or part-time working. Also, the dates on which holiday pay and holiday bonus are paid matter, because the so-called adjustment is made in the unemployment security application period in which the earnings, e.g. holiday bonus, were paid.

Holiday earned from full-time work 
Work where the working hours are over 80% of full-time working hours is counted as full-time work.
There is no entitlement to unemployment allowance on holiday days earned from full-time work. Since there is no entitlement to unemployment allowance, holiday pay and holiday bonus earned from full-time work are not adjusted with unemployment allowance. Therefore the dates on which these are paid do not matter either.

Holiday earned from part-time work 
Work where the working hours do not exceed 80% of full-time working hours is counted as part-time work.
Periods of holiday from part-time work provide entitlement to unemployment allowance. Holiday pay and holiday bonus reduce unemployment allowances, however, when the so-called adjustment is made. Adjustment is always made in the unemployment security application period in which the holiday pay and holiday bonus were paid to the applicant’s account.

In summary:
•    Full-time worker = holiday pay and holiday bonus are not adjusted and unemployment allowance is not paid for holiday period
•    Part-time worker = holiday pay and holiday bonus are adjusted based on date of payment within application period and unemployment allowance is paid for holiday period 
 

How does a lay-off end?
An employer must notify an employee 7 days in advance that a lay-off will end. 

If a lay-off has been for a fixed period, meaning that the end date is stated in the lay-off notice, the lay-off ends then without separate notice.

You always have to apply for unemployment allowance retrospectively and therefore you can only apply for it when the last day of lay-off is over. If you apply for an extension of a period shorter than 4 weeks, you can indicate in the application the date of termination of the lay-off. It is not necessary to notify the unemployment fund about the end of the lay-off separately.

The 90-day temporary layoff is coming to an end - what now? 
If the layoff ends at a previously announced time, you can preview how the layoff will end above.

The employer may continue to lay off if work has continued to decline due to the corona situation. In that case, however, new co-operation negotiations must take place. They can be held while the initial layoffs are still in progress and the layoff notice period may expire during the layoff. If an employee has already returned to work from layoffs, co-operation negotiations must take place normally.

PAM has agreed on temporary changes to the deadlines for layoffs and co-operation negotiations. You can find the valid deadlines for layoffs and the deadlines for co-operation negotiations on the top of this page.

The employer must give a new notice of lay-off and the employee must notify the TE Office of the continuation of the lay-off.
The annual leave is taken at the time specified by the employer. If the lay-off does not continue after the end of the leave, the employee will return to work normally after the leave.

The employer may also place the workers’ annual leave during the lay-off period, in which case the lay-off may continue after the end of the annual leave in accordance with either the original lay-off notice or the new lay-off notice. More information about the practices of the annual holiday in the middle of the holiday is found above.

Read more  above, if the employee has found a new job or wants to resign.