Insights | March 22, 2019

New Working Hours Act passed

On Wednesday 13 March, the Finnish Parliament passed the new Working Hours Act. The new act will enter into force on 1 January 2020, replacing its predecessor from 1996. Due to changes in working and business life, the need for new legislation has been apparent for years.

The drafting work of the new act was initiated in a committee involving the social partners (meaning employer and employee organizations). This committee failed to produce a unanimous proposal, and the drafting work was finalized by Ministry of Employment and the Economy. The new act will introduce some important innovations, although only time will tell how significant these will be in practice. Below we will highlight some of the key changes.

Location neutrality

Unlike the current legislation, the act is relatively neutral in relation to where the work is performed. Since in many industries work is no longer tied to a certain place or time, the applicability of the new act does not require that work be carried out in a certain place. The new act applies to remote working. To emphasize this change, the “workplace” concept (Fin: työpaikka) is amended to “place where work is performed” (Fin: työntekopaikka).

The government’s proposal covered all work outside a fixed workplace very broadly. However, the Parliament’s Employment and Equality Committee amended the scope of application so that it excludes work that is, due to special characteristics, performed in circumstances where the employer is not responsible for or able to supervise the arrangement of working hours. This is meant to include work that is performed entirely outside a fixed workplace, work which is mobile, or work where the employee’s working time is determined mostly based on timetables agreed between the employee and a client. According to the Committee, this will typically leave, for example, sales representatives and real estate agents outside the scope of the act.

New flexible working time

Designed for experts and information workers, flexible working time allows the employer and the employee to agree that the employee can decide on when and where to perform their work. The employer will determine tasks, goals and overall timetables for the work. In flexible working time, the employee must be able to decide on when and where to work at least 50% of their working time. The employee will report the working hours per each salary payment period, and the working hours must not exceed 40 hours per week in a four month period.

Working hours bank

Previously working hours banks have only been provided under different collective bargaining agreements. Now they will become available at all employer entities. However, working hours banks will become automatically available, but their implementation at the workplace must be agreed between the employer and the employee representatives or the personnel or personnel group as a whole. An employee can save additional and overtime hours as well as flextime hours to the working hours banks and withdraw free time later. The maximum number of hours to be “deposited” is 180 hours annually and 6 months’ worth altogether.

Maximum amount of working hours

The current limits for overtime hours will be removed and instead, there will be limits for the overall working hours. The maximum working hours, including overtime, will be on average 48 hours per week in a four month period.

Further changes ahead?

While the proposal for the new act was going through Parliament, the Employment and Equality Committee noted that the proposal did not sufficiently address changes in the different ways to organize work (e.g., platform economy, non-conventional work and borderline cases between employment and entrepreneurship). According to the Committee, this may mandate changes in the new act in the near future.

If you have further questions, please do not hesitate to contact Janne Nurminen.