Sabbatical leave scheme gains in popularity

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The sabbatical leave pilot scheme, which was agreed as part of Finland's last incomes policy agreement, has begun as planned. So far, 5,500 employees have taken advantage of the scheme. The Ministry of Labour's target of 5,000-10,000 employees per year appears likely to be achieved.

The sabbatical leave scheme which was launched in Finland just under a year ago stemmed from a debate during the 1980s about the possibility of using sabbatical leave to provide a new labour policy option for the reduction of working time. In 1988, the Ministry of Social Affairs and Health appointed a committee, part of whose brief was to study the need for a system of sabbatical leave, and ways whereby such schemes could be introduced in various sectors of the economy. The committee felt that the project was important not only because of the projected overall ageing of the workforce during the 1990s, but also because a sabbatical leave scheme had the potential to act as a model for job creation.

In the 1990s, as unemployment began to increase rapidly, the need for such a scheme became increasingly urgent as part of an active labour policy which could help to increase the lifelong work contribution of the entire population.

The Sabbatical Leave Act

The Sabbatical Leave Act provides for a pilot scheme which is built largely on the principles outlined by the committee. Under an agreement on sabbatical leave with the employer, a full-time employee can take leave from his or her job for between 90 and 359 days. During the period of leave, the employer must recruit a jobless person, though not necessarily to perform the former duties of the person on leave. This allows for the possibility of work rotation.

Under the terms of the scheme, the employee on leave receives 60% of the daily unemployment allowance to which he or she would be entitled if unemployed, subject to a maximum of FIM 4,500 a month. People taking vocational training on their own initiative are also eligible for FIM 1,000 per training month as a partial vocational training allowance.

Survey of employees interested in the scheme

Statistics Finland has carried out a survey of employees who were interested in taking sabbatical leave in February-March 1994 (with 778 respondents) and in September 1996 (1,177 respondents). The majority (70%) stated that sabbatical leave was very appropriate for the Finnish labour market. Compared with 1994, those who considered the system positive grew by 7%.

There is widespread interest in taking advantage of the scheme during the next three years on its present terms: 11.3% of respondent employees (suggesting a total of 200,000) will "certainly" take advantage of the scheme, and 17.5% ( 310,000) employees will "probably" do so. Women, young people, low-wage earners and those in the municipal sector were more interested than the average. Those who were least interested in the scheme were well-paid wage-earners. The most popular duration of is six to nine months. Some 90% stated that the biggest impediment to them taking sabbatical leave was a worry about pay.

Respondents were asked what they thought the "right level" of pay during sabbatical leave should be - at present, pay is around 30%-35% of average gross earnings. The majority of respondents considered the right level to be 60% of average gross earnings - around FIM 6,500 a month in cash terms.

Follow-up survey finds experiences positive, although pay levels are problematic

Of those taking sabbatical leave, 70% are women and the average age of those taking sabbaticals is 42 years. The average age of those who replace employees taking leave is 33. Replacements are expected to inject new ideas into the workplace. Most employees taking leave are in health and social services, public administration, industry, education and telecommunications. The percentage of sabbatical leave employees is highest in public administration and information technology

The most important reason cited by respondents for taking sabbatical leave is the need for extra time for family responsibilities. Workplace stress, the need for more time to pursue hobbies and the need for general rehabilitation were also cited as important reasons.

The experience of sabbatical leave has been fairly positive. In the survey, nine out of 10 stated that their leave had met their expectations. The same percentage would avail themselves of the scheme again if they had the opportunity to do so, though 90% believed that pay for sabbatical leave should be much higher.

Those who replaced employees who took sabbatical leave stated that the opportunity to gain work experience, to maintain their skills, to receive better pay and a greater sense of self-esteem were the main advantages of the scheme. Around eight out of 10 estimated that their chances of getting a job would increase in the future. The fixed-term and temporary nature of the work were considered disadvantages.

Employers find that the system works well, but they are unwilling to release key personnel from their organisation. Employers see the scheme not only as a useful means of giving replacement employees work experience but they also find that they bring fresh ideas into the workplace. The only disadvantages cited by employers was the time spent training the replacement staff.

On the whole, all those involved in the scheme viewed the scheme in a positive light.

The future of the scheme

So far, feedback on the pilot scheme from employment offices and workplaces has focused not only on the low level of the allowance paid during sabbatical the pension implications but also on the rigidity of the rules governing the scheme. For example, the rules do not allow for leave periods which fall outside the specified time range, and there is a qualification period of one year's continuous service. These considerations have limited the coverage of the scheme. Part-time employees are also prevented from taking advantage of the scheme. Local employment offices have been asked for feedback on the progress of the scheme and to identify any problems associated with it. The future development of the system is to be decided by the end of the year by a team representing all the social partners.

The Minister of Labour, Liisa Jaakonsaari, had been willing to raise the compensation for sabbatical leave to 80% of the earnings-related unemployment allowance and to make some amendments to the law in order to make the scheme more flexible. However, an increase in the level of compensation was rejected because of management opposition (the employers fund the earnings-related daily allowance). The reason given for this was that any change in the conditions for sabbatical leave would have breached the comprehensive centralised incomes policy settlement currently in force.

Commentary

The central trade union federations have supported the experiment widely, despite the fact that pay levels are inadequate. Employers have also supported the scheme, providing that it results in higher productivity and does not lead to a general reduction in working time. There has been some scepticism voiced about its effects on work organisation and as a means of reducing unemployment.

In general, the sabbatical leave scheme can be considered as a useful means for promoting job rotation in organisations. One important worry is that it places no obligations on those who take advantage of the scheme as to how they spend their time whilst on leave.

It is likely that the scheme will be more flexible in the future so that it has a greater appeal to employers. It is currently being reviewed and will probably continue into next year with changes that will satisfy all the parties. (Juha Hietanen, Ministry of Labour)

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