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Legal alerts / 24 Oct 2016

Legal Alert – Did You Know Employers May Have an Opportunity to Extend Employees’ Annual Working Time in 2017?

In 2017, certain employers will have the opportunity to extend their employees’ annual working time by 24 hours without an impact on the salary costs. This follows from the so-called competitiveness agreement that was recently negotiated by the Finnish central labour organisations. The extension is due to take effect at the earliest starting from 1 January 2017, and if you wish to benefit from it from the very beginning, it is best to initiate negotiations with your personnel without delay.

Who are eligible?

The opportunity to extend annual working time originates from the renegotiations of some of the major collective bargaining agreements in Finland and therefore concerns a significant part of employers who adhere to a collective bargaining agreement. Most companies operating in Finland have an obligation to apply at least one collective bargaining agreement, regardless of their membership in an employers’ association. The extension does not apply to employees who already work the statutory maximum hours, i.e. 40 hours a week.

How to implement the change?

The practical instructions on how to extend the working time are included in each collective bargaining agreement. The explicit phases of the working time extension may be determined in the collective bargaining agreement itself or the collective bargaining agreement may leave the details to be agreed at the workplace. If the details of the extension may be agreed at the workplace, this can typically be done in multiple alternative ways depending on the company’s needs (e.g. by adjusting the daily or weekly working hours or adding training days). However, if the relevant provisions in the applicable collective bargaining agreement are complex, some employers may find it easier to waive the option to extend working hours for now. If both the employer and the employee agree that the working hours will not be extended at this point, this should ideally also be explicitly agreed at the workplace.

When to take action?

Some of the collective bargaining agreements provide that employers should take measures related to the working time extension by the end of November. We therefore recommend all companies to review their applicable collective bargaining agreement(s) as soon as possible in order to learn what kind of actions may be required and when.

What if the daily or weekly working time has already been set in the individual employment agreements?

If the maximum daily working time has been specifically agreed in individual employment agreements, this could in practice limit the employer’s possibilities to extend the working time. However, it does not necessarily completely prevent implementing the change. For example, some collective bargaining agreements allow for allocating the additional working time to public holidays. This might enable implementing the change without violating the individual employment agreements.

Are the changes permanent?

At the moment, the decision to extend working hours only concerns the year 2017, and it remains unclear whether the change will be permanent.

Our experts will be happy to help you assess if your company could benefit from the change.

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