Changes for both Employers and Employees – Employment Legislation Reform of 1 January 2017

The New Year brings with it numerous legislative reforms, particularly to the Employment Contracts Act, the Act on Co-operation within Undertakings and the Occupational Health Care Act.

Maximum Probationary Period Extended

The maximum probationary period has been four months in most cases. As of the beginning of 2017, the maximum duration is extended to six months. Moreover, the employer will be entitled to further extend the probationary period in case the employee is absent from work during the probationary period due to a disability or family leave. In such cases, the employer is entitled to extend the probationary period by one month per each period of 30 calendar days of the employee’s absence. In fixed-term employment agreements, the maximum probationary period may be half of the fixed term or six months, whichever is shorter.

It is advisable that employers take the changes into account in employment contracts and internal instructions. If an applicable collective bargaining agreement contains express provisions on the length of probationary period, these should be observed in addition to the legislative amendments.  

Preconditions for Concluding Fixed-Term Employment Agreements Eased

Fixed-term employment agreements may only be concluded on the initiative of the employer for a justified reason. As of the beginning of 2017, employers may without any specific reason conclude fixed-term agreements for a maximum period of one year with individuals who are considered long-term unemployed, i.e. unemployed for a consecutive period of at least 12 months. Alternatively, the employer is allowed to conclude a maximum of three short fixed-term employment agreements with a long-term unemployed individual without a justified reason, provided that the total duration of said agreements does not exceed 12 months.

Employer’s Re-employment Obligation Shortened

The employer has an obligation to offer work to an employee made redundant if the employer needs new workforce for the same or similar tasks within nine months after the end of the former employee’s employment relationship. This re-employment obligation has now been shortened to four months, or six months if the employee’s employment relationship has lasted for at least 12 years.

Change Security and Obligation to Provide Occupational Healthcare for Employees Made Redundant

Employers that regularly employ at least 30 employees will be obliged to provide employees made redundant with an opportunity to participate in re-employment coaching or training. The coaching or training must be provided within two months after the termination of employment. The value of the coaching or training must equal the employee’s one month’s salary or the average monthly salary at the workplace, whichever is higher. The principles regarding the arrangement of the coaching or training should be included in the company’s personnel and training plan under the Act on Co-operation within Undertakings.

In addition, employers with at least 30 employees will also be obliged to provide employees made redundant with occupational health care services for six months after their obligation to work ended. The obligation ends sooner if the employee finds new employment for an indefinite period or for a fixed term of at least six months.

Both new obligations only apply to such employees made redundant whose employment relationship with the employer has lasted continuously for at least five years.

Equality Plan Required by 1 January 2017

The Non-discrimination Act, which entered into force in January 2015 obligates employers with at least 30 employees to draft a plan for the promotion of equality of the personnel. The equality plan can either be a separate plan or can be drafted in conjunction with the workplace’s gender equality plan, labour protection plan or personnel and training plan under the Act on Co-operation within Undertakings. The transitional period applicable to the obligation to draft an equality plan ended on 31 December 2016, meaning that the plan must be ready and discussed with the personnel by 1 January 2017.