The effects of coronavirus in an employment relationship

Coronavirus has generated needs for companies to adjust the terms of employment and organise various temporary arrangements for working. Although the situation is challenging to many employers, the employers are required to comply with the labour law even in such exceptional conditions.

Challenges regarding employees are also caused by the decisions to shut down day-care centres and schools. Who is obliged to pay salary or is anybody?

Changing of duties

The duties agreed on in the employment contract of an employee in an employment relationship determine the content of the obligation to work. By virtue of its right to supervise, the employer can implement minor and temporary changes in the employee’s job description. Regarding public officeholders, e.g. the stipulations in the rules of procedure shall be taken into account.

If necessary, an employee at the services of a municipal employer is obliged to transfer temporarily to other positions which can be considered suitable for them, taking into account their training and work experience. A temporary transfer may last for a maximum of eight weeks at a time. For a transfer longer than that, the employee’s consent or existence of grounds for termination of employment are required.

Furthermore, by virtue of the Occupational Safety Act the employer can obligate the employee to perform cleaning duties, such as cleaning of desktops, which aim at preventing the spreading of the coronavirus. In accordance with the obligations of the Occupational Safety Act, the employee shall comply with the employer’s orders and instructions which the employer issues within its power, and also otherwise comply with the safety and health obligations required by the circumstances.

Remote working

Ministries recommend that employees should do remote work. However, if remote working has not been agreed on in the employment contract, the employer cannot unilaterally order the employee to do remote work. In that case, remote working shall be agreed on with the employee, and the employer shall provide the necessary equipment for the employee. In the same way, the employee is not automatically entitled to demand the possibility for remote working from the employer without a provision in the employment contract.

 Adjustments of working hours and lay-off

The employer may only adjust a confirmed work shift list by the employee’s consent or for a good reason. Unexpected absences due to the epidemic may, case by case, generate a good reason to adjust the work shift list.

The working hours agreed on in the employment contract bind both parties of the employment contract. If the employer has the need to reduce the working hours, the matter shall be negotiated with the employee. As a general rule, for unilateral and permanent adjustment of working hours, existence of grounds for termination of employment is required. Coronavirus alone does not give the right to terminate the employment, and thus not to adjust the terms of the employment relationship. If the employer’s prerequisites to offer work have decreased temporarily, and the employer is unable to arrange reasonably other suitable work for the employee, the employer may lay off the employee full-time or part-time, and thus in compliance with the notice period of lay-off of the Employment Contracts Act or the applicable collective agreement (generally 14 days) reduce the employee’s working hours.

During the lay-off, the employee is entitled to apply for daily allowance or, in case of part-time lay-off, for adjusted daily allowance. It is important for the employee to remember to register as an unemployed job-seeker at the beginning of a full-time or part-time lay-off.

As a general rule, employers with a minimum of 20 employees shall also comply with the provisions of the Act on Co-operation within Undertakings and organise co-operation negotiations before making a decision on any lay-offs. The Act on Co-operation within Undertakings prescribes about an exception, however, according to which the employer can decide upon changes in the business operations, arrangement of work and notice of termination, lay-off or reducing a contract of employment to a part-time contract of employees without prior co-operation negotiations, if there are particularly weighty unforeseen reasons harming the productive or service operations or the finances of the undertaking which hinder the co-operation negotiations. The requirements for applying the prevision on exception may exist in some companies due to the situation.

In addition, labour market organisations have presented a 16-point list of measures to the Government for saving companies and jobs. Those measures would mean e.g. shortening the duration of co-operation negotiations and a possibility to lay off fixed-term employees.

Special questions concerning fixed-term employees

According to the Employment Contracts Act, fixed-term employees can only be laid off, if the employee is working as a substitute for a permanent employee and if the employer were entitled to lay off the permanent employee if the permanent employee were working. If the employment contract of the fixed-term employee includes a condition on termination of employment, the fixed-term employee can be laid off on financial and production-related grounds for termination, but not on the grounds of temporary decrease of work. As is stated above, coronavirus alone does not generate a reason to terminate the employment, but as a general rule the issue is temporary decrease of work.

It is possible for the employer and employee to agree on a fixed-term lay-off due to the employer’s operations and financial standing. In that case, however, the employee’s consent is required for the lay-off.

Obligation to pay remuneration

If the employer shuts down the workplace due to a decision of the authorities, the employer is obliged to pay the employee salary for 14 days. In that case, working is considered to be prevented by a reason not attributable to the employer or employee, and then obligation to pay salary continues for only 14 days by virtue of the Employment Contracts Act. In that case, salary shall also be paid to fixed-term employees only for 14 days. After 14 days, the employee can apply for unemployment daily allowance. The right to receive unemployment daily allowance shall be decided by the TE Office and the unemployment fund.

If the employer shuts down the workplace without a decision of the authorities, e.g. based on low volume of work, the employer has the normal obligation to pay remuneration. The employer can lay off employees if the requirements are fulfilled.

Annual holidays

The employer shall confirm or announce the employee’s annual holiday no later than one month before the start of the holiday. In exceptional cases the period is two weeks. The confirmation or announcement is binding. If the employer changes the holiday period or cancels a confirmed holiday, the employer is obliged to compensate the expenses caused by the cancellation of the holiday to the employee.

The employer cannot order the employee to use the holidays of the next holiday period outside the holidays season. The summer holiday season begins on 2 May 2020 and lasts to 30 September 2020. The employer cannot order the holidays accumulated during the holiday credit year from 1 April 2019 – 31 March 2020 to be taken before 2 May 2020. The employer and employee may, however, agree on taking the summer holiday in advance.

The employee is not entitled to transfer confirmed annual holiday to another time except due to disability to work. If the employee has contracted coronavirus before the start of their annual holiday, they have on request the right to have their annual holiday or part thereof postponed to a later date. If the employee contracts coronavirus during their annual holiday, they have on request the right to have their annual holiday transferred regarding the annual holiday after the six-day waiting period. Annual holiday shall not be transferred automatically, but needs to be specifically requested.

An employee in an employment relationship is not obliged to interrupt annual holiday that has already begun. If the employer requests for interruption of annual holiday, they shall agree with the employee, if demanded by the latter, how the interruption of the holiday will be compensated. A public officeholder’s holiday can, in a special case, e.g. due to weighty reasons or performance of duties related to health or safety, be interrupted and they can be ordered to come to work.

Quarantine does not affect the accumulation of annual holiday. Absence from work due to an order by the authorities issued to prevent the spreading of a disease shall be considered time comparable to working in the Annual Holiday Act. A similar provision is included in the State’s civil servants’ collective agreement and general collective agreement on annual holidays. According to the law, the quarantine period is time comparable to working.

Absences due to illness and quarantine

If the employee contracts coronavirus, the employer has the normal obligation to pay remuneration during illness in accordance with the Employment Contracts Act or the collective agreement. If the employee is ordered to isolation by virtue of the Communicable Diseases Act, Kela shall pay the employee sickness allowance on account of an infectious disease in the full amount of loss of earnings. For the period that the employer pays salary during illness to the employee, the sickness allowance on account of an infectious disease shall be paid to the employer.

Regarding an employee ordered to quarantine, the employer has no obligation to pay remuneration for the duration of the quarantine, unless otherwise agreed in the applicable collective agreement. The employee is entitled to receive sickness allowance on account of an infectious disease paid by Kela.

Special situations concerning a child

If the employee’s child contracts coronavirus, the right to absence from work is determined in accordance with the provisions concerning temporary child care leave. By virtue of the Employment Contracts Act the employer is not obliged to pay salary if a child falls ill. It may have been agreed in the employment contract that salary is paid for temporary child care leave, in which case the employer is obliged to pay remuneration.

The employee is entitled to receive sickness allowance on account of an infectious disease paid by Kela, if the employee’s child aged under 16 has contracted coronavirus or if the child has been placed in quarantine due to coronavirus and the employee’s working is prevented because of that.

The employer is not obliged to pay remuneration, if a day-care centre or school has been shut down due to coronavirus. In that case the reason for absence is compelling family reasons, and thus according to the Employment Contracts Act, the absence is unsalaried, unless otherwise stipulated in the collective agreement. If the employee’s child has not been ordered to quarantine to prevent the spreading of the disease, the employee is not entitled to receive sickness allowance on account of an infectious disease. In that case the employee should primarily negotiate with the employer about the possibility to work remotely at home. If remote working is not possible, the employee can negotiate with the employer on taking annual holiday in advance or taking flexi leave or overtime leave.

Employees of a day-care centre or school have the right to receive their salary for 14 days, if the day-care centre or school is shut down by a decision of the authorities to prevent the spreading of communicable diseases. In that case, working is considered to be prevented by a reason not attributable to the employer or employee.

Katja Halonen, lawyer, Teperi & Co Oy

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