Finland – New Working Hours Act brings changes to working hour arrangements
New rules on flexible working that will take effect in January 2020 will allow employees in Finland greater freedom over where and when they work.
The new Working Hours Act will enter into force on 1 January 2020. The goal of this legislative reform is to modernise the regulation of working hours and in particular, to take into account the special features of expert work, increasingly common in today’s world.
The revised Act introduces new tools for flexible working hour arrangements. The Act also tightens regulation in some respects, for example regarding rest periods. The location of work is no longer crucial for calculating working hours, since distance work and work from home will also be governed by the new Act. Following the reform, companies may need to revise their working hour practices.
New elements of flexibility include the following:
‘Flexitime’ is a statutory concept and refers to a working time arrangement, where an employee, within limits agreed in advance, can decide for him or herself when to come to the workplace and when to leave. Under the new Working Hours Act, the amount of permitted daily ‘flexitime’ will be four hours instead of the three under the present Act. The maximum allowed accumulation of excess hours will increase to 60 from the current 40 hours. Under the new Act, working hours may not fall more than 20 hours short of normal working hours. The new Act allows for more flexibility, since there is no restriction on accumulation of hours i within the reference period of four months. However, at the end of the period, the accumulation cannot be more than 60 hours in excess of normal working hours or 20 hours short of normal working hours. The new Working Hours Act will also expressly allow an agreement on flexitime to be terminated.
Flexible working time
A ‘Flexible working time arrangement’ (joustotyöaika) is a new concept, which the employer and employee can agree on in cases where the employee can independently schedule and determine the location of at least half of their working hours. This flexible working time arrangement is particularly well suited to specialist work, where the employer sets goals and general schedules instead of strictly defining the time and place for performing the work. In this kind of work, the working hours can be assigned more freely than in flexitime. Employees can independently decide on the time and day on which they perform their work, within agreed limits. However, weekly working hours must balance out to a maximum of 40 hours over a four-month reference period. In flexible work, monitoring of working hours is primarily the employee’s responsibility.
Working hours banks
The new Act allows for the adoption of a working hours bank in all workplaces, even if the employer is not party to a collective agreement that includes provisions on a working hours bank. A working hours bank enables employees to save and combine working hours, earned leave or free time gained from an exchange of monetary benefits. However, the new statutory system cannot be used for regular working hour arrangements. In other words, companies must assess whether such a bank is of benefit to them in terms of increased flexibility in working hours.
Statutory average hours
There will be more leeway to agree on the statutory average working hours in the future. However, the relationship between statutory average working hours and the working hour regulations in collective agreements is not altogether clear.
Temporary night work will be allowed for all kinds of work, and the requirements for night work will be relaxed.
Questions about the scope of the Act’s application
This legislative reform raises important questions regarding the scope of application of the Act. Opinions have already been voiced in public concerning flexible work and what is left outside its scope of application. The fact that remote work and home-based work will now be more clearly governed by the Working Hours Act must also be taken into account in considering work arrangements. Questions to be solved include, for example, how to organise the statutory monitoring of working hours when employees work remotely.
Tighter requirements for rest periods and more specific rules on overtime
The employer is responsible for assigning periods of rest. The new Act tightens regulation in this respect. For example, weekly rest periods may no longer be spread over two weeks. Under the new Act, compensation for daily rest must also be taken into account in period-based work and rules on compensatory daily rest will tighten.
Overtime and extra hours
The new Act also specifies the calculation of extra hours and overtime, especially regarding average working hours and flexitime. Workplaces sometimes have to determine whether an employee has accumulated overtime for which he or she needs to be paid. Flexitime systems, for example, must distinguish between an employee’s use of flexitime hours and the accumulation of excess working hours categorised as overtime.
The new Act clarifies the determination of overtime in flexitime arrangements and other working hour arrangements. Overtime will no longer be subject to a maximum annual quota, which is another key change introduced by the reform. On the other hand, the overall workload, including overtime, will be restricted to 48 hours in a four-month period. With this in mind, employers must set up specific and predictable practices for determining overtime within the framework set up by legislation.
KLIEMT.Arbeitsrecht is a member of Ius Laboris, an international alliance of leading law firms providing specialised services in employment law.