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Employment conditions in Finland

Employment conditions in Finland

Regulating terms and conditions of an employment relationship

Employment law presents several ways to regulate an employment relationship:
  • Employment law regulation
  • Collective agreements
    • normally applicable collective agreement, which the employer is obliged to follow if the employer is a member of an employer’s organisation
    • generally applicable collective agreement, which the employer is obliged to follow if the employer isn’t a member of an employer’s organisation, and if there is a generally applicable collective agreement in force in the sector
  • Company-specific standards, such as cooperation agreements
  • Employment agreement
  • Established practice
  • Employer’s unilateral instructions

Non-compete

A non-compete agreement is a free-form agreement restricting the employee’s right (1) to conclude, after the termination of an employment relationship, an employment agreement with an employer who carries out a competing activity with the employer with whom the employee was employed at the time the non-compete agreement was concluded, and/or (2) to carry out such an activity for employee’s account.
 
A non-compete agreement can be concluded for only a particularly weighty reason related to the employer's operations. This means that a non-compete agreement is usually justified if (1) the employee works with product development, research, or similar activities and (2) the employer has knowledge and skills not generally available to competitors.
 
The employer is obliged to compensate the employee for signing the non-compete agreement. If the non-compete agreement restricts the employee’s right for a maximum of six months, the employer must pay the employee compensation equal to 40% of the employee’s salary for the restriction period. If the non-compete agreement restricts the employee’s right for more than six months, the employer must pay the employee compensation equal to 60% of the employee’s salary for the restriction period.
 
A non-compete agreement can be in force for a maximum of one year after the end of the employment relationship.
 
In addition, the employee isn’t bound by the non-compete agreement if the employment relationship has ended for reasons attributable to the employer.

Working time records

Working time adjustment scheme

When (1) working time is organised based on average and flexible working hours, or (2) flexiworking isn’t in use, the employer must prepare in advance a scheme for adjusting working time. The scheme must indicate at least the regular working time in each week. The adjustment scheme must be prepared to cover the period during which regular working time shall be adjusted to the provided or agreed average.

Work schedule

A work schedule indicating the start and the end of employees’ regular working time and the break times must be prepared for each workplace.

Working time register

Employers must record the hours worked and the remuneration paid thereon for each employee
 

Business transfer

Business transfer is transferring an enterprise, business, corporate body, foundation, or any other operative part to another employer if the business or a part of it remains the same or similar after the transfer.
 
When a business is transferred, employment relationships continue without interruption. In general, rights and obligations valid during the transfer are also transferred to the new owner or proprietor. The applicable collective agreement, on the other hand, may change if the new employer is organized differently from the transferor-employer. The change may take effect only after the term of the collective bargaining agreement ends.
 
The transferor may not terminate an employee’s employment agreement merely because of the business transfer.
 
Employees are entitled to give the notice to terminate their employment agreements on the transfer date regardless of the notice period otherwise applied to the employment relationship or its duration if the employer or the new proprietor informs them of the transfer no less than one month before the transfer date. If employees are informed of the transfer later than that, they’re entitled to give the notice to terminate their employment agreement on or after the transfer date but not later than one month after having been informed of the transfer.
 
If an employment agreement is terminated because an employee’s working terms are worsened substantially as a result of the business transfer, the employer is deemed to be responsible for the termination of the employment relationship.
 

Intellectual property

Patents (employee inventions)

If the employee’s work has brought up a patentable invention, the employer may acquire the right in the invention if the use of the invention falls within the field of activity of the employer’s enterprise or of an enterprise belonging to the same consolidated corporation. However, the employee is entitled to reasonable compensation if the employer acquires the right to the invention. In addition, the freedom of contract is the main rule of the system. For example, the employer and the employee can agree with the utilisation of the invention and the amount of compensation to be paid to the employee. However, the legislation also imposes some restrictions on the freedom of contract, such as that the employee shall have the same right in the employee’s inventions as other inventors.
 

Copyright

The legislation contains an explicit provision for computer software and databases only: If computer software and work directly associated with it has been created in the scope of duties in an employment relation, the copyright in the computer software and the work pass to the employer. As for other works’ copyrights, the so-called normal use presumption is often applied: The employer would have the right to use the work in its activities to the extent necessary for its normal operation, but the copyright would remain with the employee. In addition, according to the legislation, the copyright can be transferred entirely or partially, so the employer and the employee are entitled to make an agreement by which the employee transfers the employment-related copyrights to the employer.
 

Design copyrights

Generally, design rights transfer to the employer if the employee must create design models during the employment relationship. In addition, according to the legislation, design rights can be transferred to another party, so the employer and the employee are entitled to make an agreement by which the employee transfers the employment-related design rights to the employer.
 

Cooperation within businesses

If a business regularly employs at least 20 employees, special rules regarding cooperation must be applied. These rules contain, for example, the employer’s obligations to have a regular dialogue with employee representatives and to create a workplace development plan in cooperation with employee representatives.
 
In addition, employees have the right to participate in the employer’s decision-making, executive, supervisory, or advisory bodies dealing with important issues concerning the employer’s business, finances, and employees (staff representation).
 
The European Work Council can represent employees if a business has a total minimum of 1,000 employees within the European Economic Area (EEA), a community-wide business group has at least two businesses located in at least two EEA member states and each business has a minimum of 150 employees, or if a community-wide business has a minimum of 150 employees in each of at least two EEA member states.
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