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Finland's furloughed workers face uncertainty as 90-day layoff period ends

Many companies say they are still unable to pay staff wages as maximum temporary layoff periods expire.

Kauppakeskus Triplassa Helsingissä
Many shop workers, such as those at the Tripla mall in Helsinki, were temporarily laid off in March and April. Image: Juha Kivioja / Yle

Thousands of workers who were furloughed or temporarily laid off when the coronavirus pandemic hit industries across Finland, are now preparing to return to work as the 90-day maximum layoff period is set to expire.

Temporary layoffs peaked in late March and early April, as companies scrambled to deal with the economic fallout of the coronavirus crisis.

However, although the maximum period of 90 days is ending or nearly up for many workers, there is still a question mark over whether or not they will return to work, remain furloughed under an exceptional circumstances ruling, or be laid off permanently.

Janne Markkula, a Labour Market Manager at the The Federation of Finnish Enterprises (EK), told Yle that many companies are now receiving inquiries about the end of layoff periods, but some may still be unable to pay staff wages.

It is therefore unclear what options are available to companies, according to Markkula, as new collective bargaining negotiations must be held and redundancy notices redistributed if temporary layoffs are to be extended.

Markkula added that there is also legal uncertainty over the current process, as there are no clear rules for renewing temporary layoffs for a fixed period or even whether or not a temporary reduction in work is a legitimate justification for the extension.

He therefore called for further clarity from the government.

Accelerated furloughing process extended to end of year

In March, trade unions agreed on a joint proposal with employer organisations that allowed firms to accelerate the furloughing process. Previously this process took up to five weeks, but unions agreed to reduce this to five days due to the exceptional circumstances of the coronavirus pandemic.

This agreement has now been extended to the end of this year.

Workers temporarily laid off by their employer can therefore immediately claim income-linked benefits from their unemployment fund.

The faster furlough procedure was also welcomed by employer groups.

"Situations can change at a very fast pace and this brings much-needed flexibility," chief economist Petteri Rautaporras of the employers' grouping Technology Industries of Finland told Yle. "The sooner the negotiations can take place, the better."

Furlough wave is abating

The wave of temporary layoffs brought about by the coronavirus crisis seems to be abating, as the Ministry of Employment and the Economy revealed it is receiving fewer and fewer new temporary layoff notifications.

At its peak in the first week of April, the number of furloughed workers reached 54,500, but currently that figure has dropped to about 8,000 per week.

In addition, the highest number of laid-off jobseekers was around 168,000 in mid-May, compared to fewer than 133,000 now.

However, unemployment in Finland has started to rise. The Ministry of Finance estimated that the unemployment rate will rise from 6.7 percent last year to 8.5 percent this year, and will increase to 9.1 percent in 2021.

The ministry also warned that some of the future unemployed will come from among workers currently furloughed.

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