The new restructuring protection scheme for employees aged 55 and over dismissed on financial or production-related grounds will be introduced on 1 January 2023. The Finnish Parliament approved the act on restructuring protection on 28 June 2022.
With the reform, the Employment Fund will start levying a restructuring protection fee from employers and there will also be changes to the liability component.
The Employment Fund can levy the restructuring protection fee from an employer dismissing an employee on financial or production-related grounds if the employee in question has reached the age of 55 and has been employed by the employer in question for at least five years. The restructuring protection fee applies to employers whose payroll on which the unemployment insurance contribution is based exceeds a specific minimum level in the year preceding the date of dismissal. For example, in 2022, the minimum level will be approximately 2.2 million euros.
With the abolition of the additional days of unemployment security, employers will no longer have to pay the liability component (in Finnish) for employees born in or after 1965. Employees born in 1964 are the last age group entitled to additional days of unemployment security and employers will also be obliged to pay the liability component for this group.
Restructuring protection comprises the restructuring protection allowance, right to training and extended job search leave. The restructuring protection training will be provided by the Employment and Economic Development Office and it corresponds to the maximum of two months’ salary of the dismissed employee. The restructuring protection allowance will be paid by the unemployment fund or Kela and it corresponds to one month’s salary of the dismissed employee.
The Employment Fund will finance the restructuring protection with a restructuring protection fee levied from the employer. The fee comprises two parts of equal size: a common part and a portion collected from the employer dismissing personnel. The common part will be levied from all employers by raising the unemployment insurance contribution.
The new restructuring protection scheme is part of the current government’s policy outlined in 2020 to promote employment among individuals aged 55 and over and to ensure that they can cope with their work.
Read more:
Restructuring protection fee levied by the Employment Fund
Media release of the Employment Fund 22 April 2022: The Government is proposing a new restructuring protection fee for employers that discharge employees
Frequently asked questions about restructuring protection and the abolition of the additional days of unemployment security on the website of the Ministry of Social Affairs and Health (in Finnish)
