Browse through brief employment and labor law updates from around the globe. Contact a Littler attorney for more information or view our global locations.

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New Rules Concerning Post-Termination Noncompetition Agreements

New Legislation Enacted

Authors: Samuel Kääriäinen, Partner, and Emma Mäkeläinen, Associate – Dottir Attorneys Ltd

The amendments of the Employment Contracts Act relating to post-termination noncompetition agreements entered into force January 1, 2022. However, to all noncompetition agreements entered into before the new legislation took effect, the new rules apply as of January 1, 2023.

The obligation to pay compensation is extended to all post-termination noncompetition agreements and the compensation is 40–60% of employee’s regular salary, depending on the duration of the noncompete period. The compensation is paid throughout the noncompetition period, on the regular salary payment days. The employer can unilaterally terminate the noncompetition agreement but not after the notice of termination has been given. The notice period shall correspond one third of the duration of the noncompete period but shall always be at least two months.

Reform of Act on Co-operation within Undertakings

New Legislation Enacted

Authors: Samuel Kääriäinen, Partner and Head of Employment, and Emma Mäkeläinen, Associate – Dottir Attorneys Ltd

The new Act on Co-operation within Undertakings entered into force on January 1, 2022. Most changes compared to the previous Act are technical or at least of lesser significance. The only significant change is the so-called obligation to have continuous dialogue. The purpose is to improve communication between employers and employees, advance personnel’s possibilities to influence matters, and enhance the co-operation. Primarily parties would meet once, twice or four times a year, depending on the size of the company. More detailed procedures are to be agreed locally.

Supreme Court: Applied Practice Established a Binding Condition of Employment

Precedential Decision by Judiciary or Regulatory Agency

Authors: Samuel Kääriäinen, Partner and Head of Employment, and Emma Mäkeläinen, Associate – Dottir Attorneys Ltd

On October 15, 2021, the Supreme Court of Finland ruled on a case relating to a break practice being established as a binding condition of employment due to many years of application. The practice entitling the employees to take longer breaks than set out in the applicable collective agreement had been followed as of year 1995.The breaks were included in the working time. The employer unilaterally decided to amend the break practice in 2016.

The Supreme Court ruled in favor of the employees that the practice was a binding condition of employment at the same level as conditions set out in the employment agreement. The employer was not entitled to unilaterally amend the practice and thus was obliged to pay the employees remedy of unjust enrichment equalling 23 minutes’ salary for each working day during which the breaks were not taken as of 2016.

Reform of Family Leave Legislation

Proposed Bill or Initiative

Authors: Samuel Kääriäinen, Partner and Head of Employment, and Emma Mäkeläinen, Associate – Dottir Attorneys Ltd

Parliament has accepted the proposed bill to reform the family leave legislation. The amendments are scheduled to enter into force August 1, 2022. Currently, the maternity leave is 105 days, paternity leave is 54 days, and the parental leave is 158, which the parents may use alternately. Maternity and paternity leaves will be replaced by pregnancy leave and quotas for parental leave and the special maternity leave is renamed as special pregnancy leave. The pregnancy leave will be 40 days and the quotas for parental leave will be 160 for both parents and 320 days in total. In addition, a new filial leave is introduced. Employees are entitled to a maximum of five calendar days of filial leave during a calendar year.