From 2012 a set of new provisions have come into effect in Finland that, among other things, will improve the position of temporary agency workers, increase the rate of unemployment benefit and raise employees’ contributions to social insurance. Employees’ spending power is predicted to rise by around 0.6 % in 2012, despite the generally pessimistic outlook, thanks to improved social benefits, increased pay, falling inflation and the government’s tax solutions.
Improved status of temporary agency workers
The provisions of the EU directive (59Kb PDF) concerning temporary agency work have been added to the Finnish Employment Contracts Act (371Kb PDF), and came into force at the start of 2012. Companies employing temporary agency workers are obliged to inform them of vacant jobs and to grant them use of facilities available to staff employees, such as the canteen.
The new legislation improves the status and working conditions of temporary agency workers by establishing minimum statutory terms and conditions for their employment in companies or sectors where they are not protected by a valid collective agreement.
The Posted Workers Act (141Kb PDF) has also been modified so that the same minimum terms and conditions will apply to temporary agency workers sent to other companies or establishments.
More occupational health and safety measures
Various occupational health and safety measures intended to help people remain active in the labour force for as long as possible have been included in the amendments to the Employment Contracts Act.
At the workplace level, the industrial safety delegate and the safety manager are responsible for ensuring occupational health and safety; in individual cases, the employee and their immediate supervisor are involved as well. According to the Act, occupational health and safety cooperation covers all those matters that may have an impact on an employee’s safety, health or ability to work. The industrial safety authority has a responsibility to monitor compliance with the Act.
Rise in benefits
In 2012, the basic unemployment allowances and basic income security will rise to €31.36 per day (from €25.74 in 2011). The basic daily allowances will rise to the equivalent of about €120 a month. Earnings-related allowances will be increased by around €66–€210 per month. These increases are partly the result of automatic index-linked adjustments, and partly due to government decisions to raise allowances in real terms.
The basic elements of income support and housing benefit will also rise as a result of index-linked adjustments and government increases. In 2012 the basic income support of a single person will be €461.05 per month (compared to €419.11 in 2011).
Fiscal changes
In October 2011 social partners agreed on the conditions of a new tripartite framework agreement. To support the demands of both parties, the government made suggestions regarding amendments to corporate and employee taxation (FI1111011I). In addition, in accordance with the framework agreement, an increase in the employee’s pension contribution will be recompensed to some extent by reducing income tax by 0.2 %. The government’s solution reduces the total tax revenues in 2012 by approximately €400 million compared to 2011.
Commentary
The Finnish media has been very pessimistic about the economy and employees’ spending power in 2012. Similarly, Statistics Finland reported fading consumer confidence in December 2012 in their own economic and financial viability. In 2011 the real purchasing power of the average employee declined by 0.5 % due to rising inflation. The pessimistic outlook is still dominant despite the fact that in 2012 the real earnings of employees are predicted to rise by about 0.6 % due to pay increases already agreed, reduced inflation and government tax solutions. Improved unemployment benefit, increased income support and higher housing benefit will also improve the purchasing power of the most vulnerable.
Pertti Jokivuori, University of Jyväskylä