Tripartite group proposes stricter penalties for unjustified use of fixed-term contracts
Published: 11 March 2007
A tripartite working group – consisting of representatives from the government, employer organisations and trade union confederations – recently presented a report (in Finnish, 345Kb PDF) [1] concerning fixed-term work [2] to the Minister of Labour, Tarja Filatov. The working group recommends, as an addendum to the existing legislation, that the failure to report reasonable grounds for using fixed-term work should constitute an offence, punishable by a fine. The current legislation already states that an employer should have adequate reasons for use of fixed-term work; however, it does not impose any penalty if these reasons are insufficient. The working group proposes that, in the future, the failure to report reasonable grounds should constitute a punishable wrongdoing on the part of the employer.[1] http://www.mol.fi/mol/fi/99_pdf/fi/06_tyoministerio/06_julkaisut/10_muut/maaraaik_tyosuhteet_tyor07.pdf[2] www.eurofound.europa.eu/ef/search/node/areas OR industrialrelations OR dictionary OR definitions OR fixedtermwork?oldIndex
According to the tripartite working group of the Ministry of Labour, unjustified use of fixed-term employment contracts will constitute an illegal practice in the future. The current legislation already states that an employer should have proper grounds for using fixed-term contracts. However, the failure to report reasonable grounds for such employment relationships is not punishable for employers at present.
A tripartite working group – consisting of representatives from the government, employer organisations and trade union confederations – recently presented a report (in Finnish, 345Kb PDF) concerning [fixed-term work](/search/node/areas OR industrialrelations OR dictionary OR definitions OR fixedtermwork?oldIndex) to the Minister of Labour, Tarja Filatov. The working group recommends, as an addendum to the existing legislation, that the failure to report reasonable grounds for using fixed-term work should constitute an offence, punishable by a fine. The current legislation already states that an employer should have adequate reasons for use of fixed-term work; however, it does not impose any penalty if these reasons are insufficient. The working group proposes that, in the future, the failure to report reasonable grounds should constitute a punishable wrongdoing on the part of the employer.
While the working group’s proposal does not recommend changes to the grounds for temporary work itself, it clearly indicates the need for stricter supervision of fixed-term employment contracts in the future. Strengthening the role of industrial safety comprises an elementary part of this proposal. Industrial safety inspectors could confront employers in relation to their grounds for use of fixed-term contracts, imposing conditional fines if they are unable to provide sufficient reasons. According to the working group, problem sectors using a high degree of fixed-term employment relationships should also be recorded.
Making substitute employees permanent
The Union of Health and Social Care Services (Terveyden- ja sosiaalihuoltoalan ammattijärjestö, Tehy), affiliated to the Finnish Confederation of Salaried Employees (Toimihenkilökeskusjärjestö, STTK), has proposed the introduction of a special clause to the Employment Contracts Act (377Kb PDF), stipulating that when a substitute employee is working on a continuous temporary basis, he or she should subsequently be made permanent. The union claims that, in the municipal sector, the majority of substitute workers employed on a temporary basis are actually doing so on a continuous permanent basis, and therefore there are no reasonable grounds for awarding continuous fixed-term contracts. The union has for a long time argued against the system of permanent substitution, which guarantees permanent contracts to employees and a steady supply of substitute workers to employers. Among its 124,000 members, a quarter are employed on temporary contracts and around half aged under 35 years work on fixed-term contracts.
Grounds for use of fixed-term contracts
Employer organisations – such as the Confederation of Finnish Industries (Elinkeinoelämän keskusliitto, EK) and the Commission for Local Authority Employers (Kunnallinen työmarkkinalaitos, KT) – consider the use of fixed-term contracts as essential for dealing with the peaks and troughs of economic cycles and for enabling the employment young people. According to the employer organisations, the use of fixed-term contracts should not be reduced by law. However, EK agrees that regulations on the grounds for use of fixed-term contracts are acceptable. The Director of industrial relations at EK, Seppo Riski, considers that the trade union side has unfairly branded the use the fixed-term contracts. Mr Riski insists that both part-time work and fixed-term contracts are a necessary part of modern working life. However, fixed-term contracts are more common in the public and municipal sector than in the private sector (FI0506202F). According to the 2006 Labour Force Survey, conducted by Statistics Finland (Tilastokeskus), the overall proportion of fixed-term contracts in both the public and private sectors amounted to 16.4% in 2006.
| Private sector (average 13%) | Local government sector (average 23.9%) | Central government sector (average 23.8%) | Total (average 16.4%) | ||||
|---|---|---|---|---|---|---|---|
| Women | Men | Women | Men | Women | Men | Women | Men |
| 16.6 | 10.5 | 24.4 | 22.0 | 24.1 | 23.6 | 20.0 | 12.6 |
Source: Statistics Finland, Labour Force Survey 2006
These recent findings seem to indicate that in the private sector, the proportion of fixed-term contracts is increasing among women; so too is the gap between the proportion of men and women working on such employment contracts.
Commentary
The use of fixed-term employment relationships has been the subject of several recent research studies. The current proposed amendments are based on the research of the administrator – Kirsti Palanko-Laaka, formerly of the Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK) – appointed a year ago by the Ministry of Labour (Työministeriö). Trade unions have also expressed an interest in finding easier ways to solve disputes over the use of fixed-term contracts. For instance, controversies concerning ‘chain contracts’ should nowadays be solved in court; however, employees are often unwilling to take their case to court.
Both EK and the public sector employer organisations – KT and the Office for the Government as Employer – are strongly opposed to the increasing monitoring of fixed-term contracts and particularly to the stricter sanctions proposed for the unjustified use of fixed-term contracts.
Meanwhile, the regulation of fixed-term contracts has been high on the political agenda during the ongoing pre-election debates. Almost all of the political parties have taken up the issue as part of their election campaign. The use of fixed-term contracts, along with hired work and external labour, are also likely to be on the agenda of the next income policy negotiations. The use of hired work is closely related to the issue of fixed-term contracts, as hired work is being increasingly used to compensate for fixed-term contracts. Although, the number of fixed-term contracts is diminishing in certain sectors, the work is nevertheless being transferred to the field of hired work.
Pertti Jokivuori, Statistics Finland
Eurofound recommends citing this publication in the following way.
Eurofound (2007), Tripartite group proposes stricter penalties for unjustified use of fixed-term contracts, article.
