Lay-off
There are several different forms of lay-offs, each with their specific impact on daily allowance payouts. Furthermore, the form of a lay-off has an impact on the final amount of daily allowance.
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Are you familiar with the different forms of lay-off?
There are several different forms of lay-offs, each with their specific impact on daily allowance payouts. Furthermore, the form of a lay-off has an impact on the final amount of daily allowance.
Lay-off options:
- full-time ⇒ earnings-related allowance is paid for lay-off days
- shortening of weekly working hours of a full-time job by full working days ⇒ aearnings-related allowance is paid for lay-off days
- shortening of daily working hours ⇒ adjusted earnings-related allowance
- combination of all of the above
Paying out earnings-related allowance during a lay-off always requires the fund to have a statement from an employment authority. You should register as an unemployed jobseeker at Job Market Finland no later than your first lay-off day, as payouts of earnings-related allowance for the lay-off period can start no earlier than from the date of registration.
A mixed lay-off refers to a situation where the lay-off is a combination of all the various lay-off options. During a mixed lay-off, the laid off person works both full days and shorter days but is also laid off for full days. If the lay-off includes both shortened daily working hours and full lay-off days, the day when you had no working time at all is entered in the application as an unemployed day. For days with shortened daily working hours, adjusted earnings-related allowance is paid.
The way the lay-off starts affects the choice of adjustment. If the lay-off starts purely as a shortened workday, the adjustment is payment-based, i.e. adjusted at the time the salary income is paid. While an ongoing lay-off may eventually turn into a mixed lay-off, this does not affect the adjustment, which continues to be payment-based until the lay-off ends. If the lay-off starts purely as a shortened workweek and you have other work or engage in entrepreneurial activities during your lay-off period, the adjustment is earnings-based, i.e. determined by the period during which the salary is earned.
By definition, ‘adjusted daily allowance’ is an allowance which accounts for salary income earned during a workday that was shortened by lay-off, or for salary income earned during both a shortened workday and a shortened workweek.
Daily allowance for the lay-off period is also adjusted if, during the lay-off, you receive income from part-time or on-call work for another employer or from part-time entrepreneurial activities. The adjustment also takes income from other work or part-time entrepreneurial activities into account.
If you have been laid off from part-time work, this income continues to be adjusted during your lay-off for as long as you receive income from the part-time job during the lay-off. This means that you will receive adjusted daily allowance even for your full-time lay-off period for as long as you are paid a salary for your part-time work.
As an additional prerequisite for receiving adjusted daily allowance for your lay-off period, your working hours are not allowed to exceed 80% of the working hours of a full-time employee. For a shortened workday, your working hours are reviewed for the entire adjustment period, which is either four full calendar weeks or a calendar month, depending on salary periods. For a shortened workweek, working hours are reviewed per calendar week.
Adjusted daily allowance is paid in equal instalments for the duration of the application period for each weekday for which you are entitled to the benefit. Daily allowance is paid for both lay-off days and workdays.
The amount of your adjusted daily allowance is affected by the amount of your daily allowance and your salary income for the lay-off period.
During the lay-off period, the payment of an earnings-related daily allowance depends on the provisions of the collective agreement.
- For more information about your right to midweek holiday compensation during a lay-off, please contact your workplace shop steward or your trade union, as this is a matter regulated by the collective agreement.
Earnings-related unemployment allowance can be paid for midweek holidays (arkipyhä) during a temporary lay-off on the same grounds as other days of lay-off, if you are not entitled to full pay for the midweek holiday.
Different sectors have different practices for compensating employees for midweek holidays:
- separate midweek holiday compensation
- no separate compensation, but a midweek holiday during a workweek does not reduce the amount of salary paid
- midweek holidays reduce the amount of salary paid
Earnings-related allowance cannot be paid for a midweek holiday if your employer is obliged to pay a full midweek holiday compensation or the holiday does not reduce your amount of salary. You can receive allowance for a maximum of five days per calendar week. This means that earnings-related allowance can be paid for no more than five days a week.
For example, if you are laid off from Monday to Friday (5 days) but receive midweek holiday compensation for a public holiday that falls on a Saturday, the unemployment fund can only pay you allowance for four days.
If the employer is required to pay midweek holiday compensation based on part-time work, the compensation is considered as adjusted earned income.
There can be a maximum of five compensation days in a calendar week. Therefore, earnings-related daily allowance can be paid for a maximum of five days per week. For example, if you are laid off from Monday to Friday (5 days) but receive a midweek holiday compensation for a holiday that falls on Saturday, the fund can only pay you the unemployment allowance for four days.
A reason comparable to a lay-off means that the employee’s obligation to work and the employer’s obligation to pay wages have been completely interrupted.
Reasons may for example include:
- Fire at the workplace
- An exceptional natural event
- Other reasons beyond the control of the parties to the employment.
It is also possible to apply a reason comparable to a lay-off to fixed-term employment.
Example:
Fire at the workplace:
In the event of a fire, the employer’s obligation to pay wages ends after 14 days. In this case, employees do not need to be separately laid off. In this case, remember to register as an unemployed jobseeker at Job Market Finland. You can contact the employment authority even before you are laid off. It is worth mentioning to the employment authority that the labour policy statement they have submitted to the unemployment fund mentions a reason comparable to lay-off due to a fire. After the seven-day waiting period, an earnings-related daily allowance will be paid to you normally, as in other lay-off situations.
In the event of a weather barrier, you can apply for a daily allowance from the fund under certain conditions.
The weather barrier under the Unemployment Security Act only applies to the building and forestry industry. In other industries an employer may, if necessary, lay off a person for production and economic reasons.
If work is prevented due to freezing temperatures, those working in the building and forestry industry must have agreed on a frost limit before starting work on the site. A weather barrier is a situation in accordance with a collective agreement in the building or the forestry industry where:
- Work is prevented solely and exclusively due to freezing temperatures
- A certain frost limit has been set in advance for the construction site, below which the work will not be carried out
- According to the collective agreement, the employer is not obliged to pay any wages or other remuneration.
- Earnings-related daily allowance can only be paid for a completely unpaid frost day. If the salary has been paid for example for the waiting period, then no daily allowance can be paid for that day.
- An entire day of weather obstacles can be used to accrue a waiting period or to pay unemployment benefit when the job-seeking is activated at Job Market Finland. Inform the employment authority that it is a weather barrier or frosty day.
- Unpaid frosty days must be specified either in a statement from the employment authority or in a separate certificate from the employer.
In this case, you can apply for daily allowance from the fund, if the employer has not paid wages or other remuneration for the days in question. However, always fill in the application for entire calendar weeks from Monday to Sunday.
In the forest machinery sector or in the sheet metal and industrial insulation sector an employee may be laid off due to a weather barrier. You can also apply for a daily allowance for these days if you are laid off.
If you are applying for daily allowance for the first time in the event of a weather barrier or your employment condition has been met again, the seven-day waiting period will be set normally.
In case of doubt, you should contact either your own trade union or the customer service of the A-fund.