Finland: Flexible forms of work: 'very atypical' contractual arrangements

  • Observatory: EurWORK
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  • Published on: 04 March 2010



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Country:
Finland
Author:
Anna Pärnänen
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Disclaimer: This information is made available as a service to the public but has not been edited or approved by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

In Finland the most common form of non-standard employment is fixed-term employment. For the past five years the proportion of fixed-term employment has stayed above 10 percent, but the recent trend is downwards. A typical fixed-term employee in Finland is a youngish female working in a public sector occupation in education or social and health care. Compared to other EU countries, they have a rather high education. The social consequences of fixed-term employment, such as lack of job security, have been widely discussed both by political actors and academic researchers.

1. Definition and trends

1.1 Please describe the incidence of the following forms of employment that go beyond non-standard employment in your country, including any upward or downward trends over the past five years, plus, if relevant and appropriate, a brief explanation of the labour market context:

  • Very short part-time contracts (less than 10 hours per week)

The proportion of employees with very short part-time contracts is very low in Finland; 2.2% in 2007 (Figure 1). The trend has been slightly upwards. The proportion of women is higher than that of men (Figure 1).

  • Short fixed-term contracts, of either less than six months, less than three months or less than one month

According to the Finnish Quality of Work Life Survey (FQWLS), the proportions of employees with short fixed-term contracts in 2008 were as follows: 4% had a contract of less than six months, 2% less than three months and under 1% less than one month. The respective figures in 2003 were 5%, 2% and less than 1%, i.e. the situation has changed very little. Because of the timing of the data collection, the numbers do not include summer workers.

  • employment without formal written contracts, (based on oral contracts)

There is no information available.

  • “zero hours” contracts/on-call work, where workers can be called upon at short notice to go into work. Do these contracts guarantee a minimum number of working hours a week? Do these contracts offer a fixed hours pattern or can the employer vary working hours?

There is no reliable information about the proportion of employees with “zero hours” contracts. However, from 2009 onwards this information will be collected in the LFS.

Service Union United PAM (member of SAK), has collected some information about the “on-call” workers in their own survey directed at union members. Four percent of respondents said that they had “another kind of work arrangement, such as on-call work”. According to another survey conducted by SAK The Central Organisation of Finnish Trade Unions, 8% of employees were working as “on-call workers”. However, the sample covered only East and North Finland. Thus neither of these surveys are representative.

Since these “zero hour” contracts are more prominent among SAK members than other employees, it can be estimated that the respective proportion of all employees is far less than 5%.

According to PAM, some of their members have working contracts that do not include any guaranteed minimum number of working hours, but there are no data about the prevalence of such contracts.

  • any other forms of employment that are considered to be non-standard in your country (excluding regular part-time, temporary agency work and economically dependant work).

In Finland also longer (than six months) fixed-term contracts are considered “non-standard” employment. In the past five years the number of employees with fixed-term contracts has stayed above 10 percent. The proportion of fixed-term employees is higher among women than men (Table 1) and among public sector employees (municipalities and the state) than private sector employees (Table 2). However, as the private sector is much broader than the public sector, the number of fixed-term employees is higher in the private sector, even if fixed-term contracts are used relatively more in the public sector.

Table 1. Proportion of fixed-term employees by sex, 2003–2008 (%)
  Women Men
2003 18.7 10.2
2004 17.2 10.2
2005 18.2 10.4
2006 18.3 10.4
2007 17.8 10.4
2008 16.7 9.1

Source: LFS, First quarter of each year

Table 2. Proportion of fixed-term employees by sector, 2003–2008, (%)
  All State Municipalities Private
2003 14.5 23.8 24.1 10.0
2004 13.7 21.9 22.3 9.6
2005 14.4 23.9 23.1 10.1
2006 14.4 24.0 23.2 10.3
2007 14.4 24.3 22.9 10.2
2008 12.9 22.2 20.9 9.2

Source: LFS, First quarter of each year

According to FQWLS 2008, most of the employees with fixed-term contracts would prefer open-ended contracts; only 25% said they specifically wanted to work with a fixed-term contract, while 47% said there were no other jobs available (28% stated something else as the reason for having a fixed-term contract).

The variety of reasons for fixed-term contracts make employees with fixed-term contracts a rather heterogeneous group (Table 3).

Table 3. Reason for fixed-term contract, % of fixed-term employees
Reason for fixed-term contract %
A substitute without a permanent post 30
On a trial period 2
Hired with employment subsidies 6
Doing seasonal work 6
Come to work only when summoned 4
In apprenticeship training 2
Project-related job 9
Discontinuous finance 4
Employer does not want to establish a permanent post 6
Related to education or training 4
Unqualified 2
Fixed-term office or work 13
Part-time teacher 2
Some other reason 7
Working in a vacant post 3

Source: FQWLS 2008.

1.2 What is the legal framework surrounding these types of employment – has it changed over the past five years, possibly in reaction to trends? Please note that this CAR does not include undeclared work.

In Finland quite a few actions have been taken to improve the situation of fixed-term employees during the 2000’s. Firstly, the Employment Contract Act reform 2001 included a more rigid legislation regarding the grounds for fixed-term employment. Secondly, in 2003, the Government gave instructions to reduce the use of fixed-term contracts especially in the public sector. The legislation on social security regarding temporary workers’ sickness and family allowances has been changed, and the reform of the Act on Annual Holiday (2005) includes several improvements for those with fixed-term or part-time contracts.

As explained above, the majority of fixed-term employees are women. This has been explained, among other things, by the fact that the costs of the family leaves are borne mostly by the employer, which makes them especially unwilling to hire younger women with open-ended contracts. Therefore, the following improvements are expected to reduce the number of fixed-term employees. Firstly, the compensation of employer costs from family leaves has been improved and secondly, fathers have been encouraged to share family leaves.

In June 2006, the Ministry of Labour appointed a tripartite working group to examine the use of fixed-term employment and preconditions for their use. The working group issued its report to the Ministry in February 2007. The group considered the Employment Contracts Act from 2001 as adequate regarding the use of fixed-term employment but called for more active monitoring of the legislation. The group proposed that employers who omit to provide (a fixed-term employee with) a clarification of the central grounds for the employment contract should be punished. The aim is that the grounds for the use of fixed-term employment would be considered more thoroughly and that the employees themselves would be more aware of the reasons behind the type of their employment relationship. The group further proposed that legislation be used to grant the labour inspectorate better preconditions for monitoring the use of fixed-term employment. In addition, the working group proposed that another tripartite working group would be established to examine the questions connected with temporary agency work. The proposals also included a pulling together of good practices on the reduction of fixed-term employment, such as the use of system of substitute personnel – hired on a permanent basis by e.g. a hospital and being dispatched to departments needing them –,’work pools’ as well as promotion of organisation of work and ’working hour banks’. Training measures and strengthening the competence of fixed-term employees was considered to be even more important in the future than before. However, the group concluded that even though the use of open-ended contracts should be prioritised, the labour market will also in future continue to experience needs and situations when the use of fixed-term employment is unavoidable. Minister Cronberg has promised that the proposals of the working group will lead to a law proposal. It is interesting to see how the situation will develop.

1.3 Is there any data on the transitions between:

a) non-standard forms of employment and standard forms of employment, and

b) non-standard forms of employment and unemployment/inactivity?

No studies have been made about these kinds of labour market transitions in Finland. Table 4 reveals, however, how fixed-term employees consider what will happen to their labour market position after their current fixed-term contract ends (Table 4).

Table 4. “Once your fixed-term employment relationship finishes, do you think that..”, % of fixed-term employees
  %
Your fixed-term employment relationship will probably be continued at your current workplace 42
You will probably enter into a permanent employment relationship at your current workplace 10
You will probably start a new job somewhere else 14
You will probably become unemployed 7
You would not even want a new job because of e.g. family reasons or studies 6
You do not know yet what will happen 21

Source: FQWLS 2008

1.4 How prominent is the academic/policy debate on non-standard employment in your country? Please briefly summarise the content of the debate.

The Policy programme for employment, entrepreneurship and work life included in the Government Programme (2007–2011) states that ‘a new Finnish modus operandi will be worked out to create greater harmony between job security and flexibility. Promoting these objectives side by side will help respond to the needs of both the employer and employees.’

In August 2007, a high level working group on flexicurity, appointed by the Ministry of Labour, was set with the aim to design a ’Finnish model of flexicurity’ by 2010. The group is aiming at promotion of occupational and regional mobility, life-long learning and efficient employment services so that employees would be able to change jobs as flexibly as possible in the case of restructurings. However, the Chairperson Minister Cronberg emphasises that the Finnish model will not include a weakening of the conditions of employees' protection against unlawful dismissal.

Academic debate on the issue is also active. For example The Finnish Academy’s Research Programme on The Future of Work and Well-being (2006–2011) funds several research groups that examine non-standard employment. Several researchers and research groups participate in public debate under themes such as bad working conditions and the situation of non-standard employees (so called Precarity debate). It can be claimed that this debate has had an effect also on the work of SATA-committee which is preparing a reform of the Finnish Social security system.

2. The nature of the work carried out by those in non-standard employment

2.1. The nature of the work

  • the sector

As presented above, the proportion of fixed-term employees is higher among public sector than private sector employees. If the sectors are examined more carefully, it can be noted that fixed-term contracts are used relatively more often in such female dominated fields as education and social and health care than in other fields (Figure 2).

  • the type of enterprise (size etc.)

Data concerning the proportion of fixed-term employees according to the size of the enterprise are only available concerning the private sector. According FQWLS 2008, fixed-term contracts are used more in micro (2–9 employees) and small (10–49) companies than in medium-sized (50–249) or large (250 ) companies. In micro and small companies around 12% of employees had a fixed-term contract. In medium-sized companies the proportion was around 8% and in large around 6%.

  • The type of activity (eg low-skilled jobs such as cleaning, or high-skilled jobs such as IT consultant roles or jobs in creative arts)

The educational background of fixed-term employees is reported here as an indicator of type of activity. Fixed-term employees have varying educational backgrounds: 13% of those with only basic education worked as fixed-term employees, and the figures for those with secondary and tertiary education were 13% and 10%, respectively. Fixed-term contracts are most used with young persons and more often with women than with men. (Figure 3).

It seems that fixed-term employees can be found rather equally in different hierarchical positions. There are relatively as many fixed-term employees (12%) among upper white collar employees as among lower white collar employees (14%) or manual workers (9%) (FQWLS 2008).

2.2. Work organisation

  • working hours (eg. unsocial working times, rather than working hours)

There is no significant difference in working times of fixed-term and permanent employees; unsocial working times are as common among both groups. For example, 2% of employees in both groups worked nights or evenings and the proportion of fixed-term and permanent employees working in shifts is practically the same (21% vs. 20%).

  • shift patterns

Please, see previous question.

3. Consequences of non-standard work on working conditions

  • pay

    It is rather difficult to estimate the effects of fixed-term contracts on pay because fixed-term contracts are more common in younger age groups than in older ones. Thus it is impossible to say whether lower pay is due to the form of work contract or shorter work experience. Bearing this in mind, statistics of wages and salaries indicate that the difference between the monthly pay of employees with fixed-term and open-ended contracts averages 400 euros. The difference is the highest, at 900 euros, in primary production. These figures are, however only indicative, and reasons (age, experience, education) behind these kinds of differences should be studied before drawing rushed conclusions.

    However, the results of FQWLS 2008 interestingly reveal that those with fixed-term contracts are less likely to be part of result-based bonus systems than those with open-ended contracts. Among those who said that such a system was in use at their workplace, only 8% of open-ended employees said that they were not part of the programme while the respective figure for fixed-term employees was 35%.

  • working hours

    There is no significant difference in working hours between fixed-term employees and others.

  • exposure to risks and accidents at work

    As can be seen in Table 5, employees with fixed-term contracts do not appear to be more exposed to risks and accidents than employees with open-ended contract. The only difference can be found in risk of infection of serious disease. This, however, is explained by the fact that fixed-term contracts are widely used in health care.

Table 5. Considers following risks as clear danger, %
  Accidents Violence Chemical material Infection of skin disease Strain injury Problems with mental health Infection of serious disease Burn-out
Open-ended contract 13 5 4 4 18 3 9 9
Fixed-term contract 9 5 3 3 15 2 16 5

Source: FQWLS 2008

  • work-related health problems (including problems related to mental health) and occupational illnesses

    Please, see previous question.

  • Social consequences such as a lack of job security

    Table 6 indicates how many of the employees with either an open-ended or a fixed-term contract have experienced threat of certain job security issues. Persons with fixed-term contracts have a higher fear of losing their job and becoming unemployed.

Table 6. Proportion of employees whose work includes following insecurity factors, %
  Open-ended contract Fixed-term contract
Transfer to other duties 21 20
Threat of temporary dismissal 11 11
Threat of dismissal 11 22
Threat of unemployment 11 42
Threat of becoming incapable of work 23 17
Unforeseen changes 40 35
Intolerable increase of workload 40 34

Source: FQWLS 2008

Fixed-term employment has also other social consequences. The majority (57%) of fixed-term employees felt that the form of employment was difficult due to the economic insecurity it created, for 42% it was mentally stressful, over half (56%) said that the planning of the future was difficult. Furthermore, around half experienced that they had to do their job especially well in order to get a new work contract, and as many as 68% missed the feeling of security that a permanent contract would bring. Despite of these negative effects of fixed-term employment, it must be noted also that around half said that for them a fixed-term contract was linked with a positive feeling of freedom.

When talking about the social consequences of non-standard employment, it is important to notice that 7% of women with fixed-term contract say that they had postponed having children because of a fixed-term contract. Thus, the labour market situation can also influence family formation.

  • training and career development opportunities

    According to FQWLS 2008, only 65% of fixed-term employees say that that they have similar access to education and training offered by the employer as the permanent employees. Furthermore, 41% of fixed-term workers agreed with the statement “I would take a longer-term approach to my work if I were a permanent employee”.

  • job quality: is the content of the job interesting and/or does it require the worker to possess a certain level of knowledge and skills?

    A large majority of fixed-term employees seem to consider their job content interesting, at least when it is examined how employees answer to the question “Do you yourself regard your current work as: very important and significant/ quite significant/ rather insignificant/ or totally insignificant?” As many as 46% of fixed-term employees consider their work as very significant as against to 39% of permanent workers and 47% consider it quite significant, as against to 54% of permanent employees.

Table 7 illustrates factors making one’s job more enjoyable. There is no great difference in factors measuring job quality when fixed-term employees and permanent employees are compared.

Table 7. Factors making current job more enjoyable, (%)
  Open-ended contract Fixed-term contract
Interesting work 64 67
Unhurried pace of work 13 17
Independence of work 70 65
Appreciation of work 39 40
Working hours 46 50
Relations with superiors 36 37
Relations with co-workers 68 70
Possibility to fulfil oneself 45 47
Variety of work 61 58
Pleasant customers / students 44 49
Learning of new things 44 54
Promotion opportunities 13 12
Pay 25 20
Working conditions 25 22
Opportunities for influencing the work 37 32
Spirit of the workplace 56 58
Certainty of the employment relationship 51 11
Feeling of achievement and usefulness 55 59
Challenging nature of work 55 56

Source: FQWLS 2008

  • Employment rights (equality, non-discrimination, right to collective bargaining). Are there any control mechanisms to ensure that these rights are not being breached? Are there any mechanisms to ensure that employees can lodge complaints about breaches of employment rights?

    Please, see question below.

4. Impact on health and safety

  • what are the main health and safety issues for workers in non-standard employment?

    Because the typical fixed-term employee is a women working in the sectors of education or social and health care, the health and safety issues for workers in non-standard employment are the same as they are in general within these sectors. Please, see question 3.

  • are there any control mechanisms to ensure the health and safety of these workers?

    The health and safety issues of fixed-term and other non-standard employees are controlled through the same control mechanisms as the other employees’. This means work of labour inspectors that have access to any workplace to ensure that health and safety are at the right level. The labour inspectors have also access to such workplace documents as working contracts. (For more detailed information, see http://www.tyosuojelu.fi/fi/guidance)

  • what is the role of the labour inspectorate?

    Please, see question above.

  • what mechanisms exist to ensure that employees can lodge complaints relating to health and safety?

    Every workplace has a labour protection manager who should, together with employee’ representatives, tackle the issues of labour safety. This includes also issues related to working contracts. If this is not the case, the employee has a right to ask for inspection by the labour inspector.

5. Views and actions of policy makers and social partners

5.1 Have there been any actions taken by policy makers and/or social partners to change the regulatory framework surrounding non-standard forms of employment, or to encourage the growth or decline of any particular practice?

Please, see questions 1.2 and 1.4.

5.2 What are the views of policy makers and social partners on these issues?

Please, see questions 1.2 and 1.4.

6. Commentary by the NC

In Finland the debate about “non-standard” employment is mainly concentrated around the question of fixed-term employment, since on-call, temporary agency or undeclared work are rather minor forms of employment. From the European perspective Finland is one of the leading countries in the proportion of fixed-term employment, especially among women. Compared to other EU countries, fixed-term employees have a rather high education in Finland. The issue of fixed-term employees has often been on the political agenda and a topic of public debate. This, together with the good economic situation, might have had an effect on the recent downward trend of fixed-term employment.

Anna Pärnänen, Statistics Finland

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