EMCC European Monitoring Centre on Change

'Change Security' model

Finland
Phase: Management
Тип:
  • Advice
  • Fostering mobility
  • Income support for workers
  • Matching/Networking
  • Provision of labour market information
  • Training
Last modified: 07 July, 2020
Native name:

Muutosturva

English name:

'Change Security' model

Coverage/Eligibility

The scheme is available to employees who have been made or are at risk of being made redundant or temporarily laid off due to economic reasons. An employee with a permanent contract must have a work history of at least three years in order to be covered. Fixed-term employees are included if they:

  • have been employed by the same employer for a minimum of three consecutive years; or
  • have been employed by the same employer for a minimum of 36 months within the last 42 months; or
  • have a work history of a minimum of five years within the past seven years, with one or multiple employers.

The scheme also applies to employees who resign after having been temporarily laid off for at least 180 consecutive days.

Main characteristics

The 'Change Security' system was created with the purpose of promoting quick and flexible re-employment for employees at risk of dismissal for economic reasons.

The model consists of three basic elements. First, employers are responsible for informing employees about their right to ‘change security’. When 10 or more employees are affected, the employer must draw up an action plan together with the employees; with fewer people affected, the employer must present operating principles of support services during the notice period. 

Second, employees are entitled to a paid job-seeking leave, prior to redundancy. The maximum number of days of job-seeking leave ranges from 5 to 20, depending on the duration of the employment relationship. 

Third, public employment services (PES) must provide counselling and job-seeking support for the affected employees, including a personalised re-employment plan (a service available for all unemployed job-seekers).

The Change Security model was further expanded through the tripartite labour market agreement, the Competitiveness Pact, signed in 2016. Consequently, the following rules apply when an employer who has at least 30 workers on a regular basis dismisses an employee who has been employed by the employer consecutively for at least five years before the end of the employment relationship:

  • the employer has a responsibility to provide coaching, training or education aiming for re-employment of employees who have been dismissed due to economic reasons;
  • the value of the education or training must correspond to one monthly salary;
  • the employee is entitled to occupational health care services provided by the employer for six months after the employee’s work duties have ended. 

The PES can assist the employer in providing education or training. The PES is also responsible to map, in collaboration with the employer and staff representatives, what are the needs for public employment services in restructuring events.

In addition to the duties of employers connected to the 'Change security' model, in accordance with chapter 6 of Employment Contracts Act (Työsopimuslaki) (55/2001) employers have a duty to rehire employees dismissed for economic reasons. The rehiring duty lasts four to six months depending on the duration of the employment relationship. 

Funding

  • National funds
  • Companies

Involved actors

National government
Funding
Public employment services
Coordination, counselling and support for job-seekers.

Effectiveness

A study commissioned by the Ministry of Employment and the Economy in 2013 about 'Change Security' shows that among eligible persons, 35% find employment within three months, and 53% within a year from having been made redundant. The scheme offers individual guidance to relevant training and other services, meaning that the proportions of persons left outside the labour force are marginal. During the years 2005-2015 there were 8,500 companies affected by dismissal of 10 or more people and almost 126,000 persons benefited from the scheme.

 

Strengths

According to the 2013 study, public employment officials estimate that the effectiveness of this measure, as compared to others, derives above all from early intervention: employees start benefiting from public employment services already during the notice period. Accordingly, the individual employee is more active and interested in re-employment immediately after the dismissal notice and is hence less likely to become passive in the job-seeking process if he or she is caught by the employment services at this early stage. Also the active cooperation between employers, employees and public employment services was found helpful.

Weaknesses

The scheme requires rather extensive resources of the employment and economic development administration in order to be able to offer active individual counselling for employees who have been laid off. 

There have also been some problems with awareness raising of the model and neither employers nor employees always take full advantage of it. Some problems in the implementation have been observed in SMEs as they tend to lack information and resources. The job-seeking leave an employee is entitled to prior to redundancy might be difficult to arrange in a small firm.

Examples

No information available.
Sources
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