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Last updated: 16.08.2023

A temporary layoff interrupts work and the payment of wages

A layoff means that the employer has decided to interrupt work and the payment of wages temporarily. The employment relationship remains in force in other respects. An employee can be laid off for a fixed-term period or until further notice.

In the Finnish labour market, a temporary layoff is a means to help the employer overcome temporary problems and thereby potentially save jobs. 
An employee can be laid off on two grounds:  

  1. For financial reasons or reasons related to production  
  2. Because the employer’s ability to provide work has reduced temporarily, for an estimated period of no more than 90 days

An employee can be laid off for a predetermined period or until further notice. Work can be stopped completely, or the working time can be reduced. 

Temporary layoffs primarily concern permanent employees. A person in a fixed-term employment relationship can be laid off only if she or he is a substitute and the employer would have the right to lay off the permanent employee for whom the fixed-term employee is serving as a substitute. 

During the layoff period, an employee has the right to accept other employment and terminate her or his employment contract with immediate effect. 

Notification of temporary layoffs and their end 

An employee must be notified personally of a layoff no later than 14 calendar days before the start of the layoff. The end of a layoff must be announced seven days in advance. Employment contracts may include provisions on longer notification periods.  

If a layoff is temporary (its end date is indicated in the layoff notification), the layoff ends on that date without separate notification. 

Layoffs and change negotiations 

If an employer considers making one or more employees redundant, implementing temporary layoffs, converting full-time employment contracts into fixed-term contracts or unilaterally changing key terms of employment, change negotiations must be conducted under the Co-operation Act in companies with more than 20 employees. Change negotiations were previously called cooperation negotiations. 

Read more about change negotiations

During a temporary layoff, annual leave is accumulated for the first 30 days in the same manner as at work. 

If a temporary layoff continues uninterrupted for more than 30 days, days of annual leave are accumulated only for months in which there are at least 14 working days. 

Return to work interrupts the calculation of the 30-day period. If the employee works between layoff periods, the calculation of the 30-day period starts from zero at the beginning of each separate period.  

If a temporary layoff is implemented by shortening the work week, annual leave is accumulated normally for six months. If the layoff continues after that, days of annual leave will not be accumulated. 

Read more about the impact of layoffs on annual leave

If a worker is provided with notification of a temporary layoff during her or his sick leave, the employer has an obligation under the collective agreement to pay wages during the sick leave. The layoff enters into force after the end of the sick leave. 

If the sick leave begins after the provision of notification of a temporary layoff, the layoff will enter into force on the first announced date, and the employer has no obligation to pay wages during overlapping sick leave.  

A worker may terminate her or his employment contract with immediate effect during a temporary layoff if she or he does this no later than seven days before the end of the layoff. In such a case, the employment relationship ends immediately, and wages will not be paid for the notice period.   

If a temporary layoff has continued uninterrupted for at least 200 calendar days, the worker has the right to terminate the employment contract, be paid wages for the notice period and receive holiday compensation. Annual leave taken during a temporary layoff does not interrupt the 200-day period. If a partially laid-off worker terminates her or his employment relationship, she or he is not entitled to wages for the notice period, even if the layoff has lasted for more than 200 days. There is no obligation to work. If a partially laid-off person terminates her or his employment, a waiting period (90 days) will be applied to their employment security. 

 Wages for the notice period are calculated in accordance with the notice period applicable to the employer. Wages for 14 days may be deducted if the worker has been laid off in accordance with a layoff notice period of more than 14 days. 

What to do in the event of a layoff 

If you have been laid off temporarily and you want to apply for a daily allowance for the layoff period, you must register as a jobseeker with TE Services no later than on the first day of the layoff. You can get a full earnings-related unemployment allowance for full days of layoff or an adjusted allowance for reduced working time. 
Read more about applying for an earnings-related unemployment allowance on the website of the Unemployment Fund of Service Union United