Revisions to the Employment Contracts Act, which came into force at the beginning of the year, have brought changes to companies’ day-to-day life.
Extension of the trial period
The maximum duration of a trial period was extended from four to six months and this possibility has already been taken into use in several companies. Additionally, the trial period can be extended by a month for every 30 days’ period of disability to work or unpaid parental leave.
However, the six months rule is not unconditional: in fixed-term contracts the trial period cannot exceed half of the contract’s duration.
Reduction of the re-employment obligation and mandatory re-employment training
Another significant change is the shortening of the re-employment obligation from nine to four months. In other respects, the obligation remains unaffected: if an employment relationship is terminated on financial or production-related grounds, and the employer needs new employees for the same or similar work that the dismissed employee had been doing, the employer has the obligation to offer work to its former employee if he is registered as a jobseeker at the Employment and Economic Development Office (TE-keskus). The dismissed employee does not need to be unemployed. However, if the employment relationship of the terminated employee has continued successively for at least 12 years, the duration of the re-employment obligation is six months.
Even though these revisions tend to increase flexibility, the price tag for dismissals is on the rise: the Employment Contracts Act now obliges companies to provide re-employment training or coaching to employees who have been dismissed for economic or production related reasons. This obligation concerns companies who employ at least 30 persons and employees with a minimum of five years’ work history. This practice that was already in use in many companies is now mandatory and, furthermore, there is a minimum level set for the re-employment coaching: the value of the training or coaching has to correspond at least to the estimated value of the employee’s monthly salary or the average monthly salary of the employees working at the same location, depending on which one is higher.