Worker’s cooperatives usually have employment relationships: the cooperative is an employer, and the member is an employee under contract. The employment relationship can be an ordinary permanent employment or a fixed-term one. Cooperatives can hire agency workers for temporary tasks or take work contracts. This is why the employment relationships are often rather short, which does not rule out short-term jobs repeating continuously.
Regardless of the duration of the work, it is usually under an employment contract relationship. The member supplying the labor, or any other employee and the cooperative have made a contract, but it may not always be written. This means that the cooperative is an employer, required to follow normal duties of the employer in an employment contract. These include records on actual hours worked, health and safety at work and occupational health care. The employee has the rights provided by the law and the collective agreements .
It is advisable to familiarize oneself with the legislation defining the employment relationship and the collective agreements of the line of business in question. The most important obligations of an employer are defined in the following Finnish laws: The Employment Contracts Act (55/2001), the Working Time Act (272/2019), the Collective Agreements Act (436/1946), the Holiday Act (162/2005), the Employees Pensions Act (395/2006) and the Occupational Health Act (1383/2001). The laws and their amendments are available in Finnish here: Finlex pages.
The working conditions to be written down in a written employment contract
The conditions of the employment relationship are defined, as far as not limited by the law and the collective agreements, in the employment contract signed between the employee and the employer. Such a contract can be oral, written or electronic, but it will be safest to write a document certified by signatures of the two parties.
According to the Employment Contracts Act, the employer must always give the employee a written document of the essential conditions of a permanent employment or one that has lasted more than one month, before the end of the first salary period of the employment, if the conditions are not defined in a written contract. In repeating employment relationships of less than one month under the same employer and under the same conditions this document has to be delivered at least one month after the beginning of the first employment relationship. In agency work the document must be delivered, even if the contract was made for less than a month, if the employee specifically asks the agency for it.
The employment contract or written document must mention at least:
- The residence or registered office the employer and the employee;
- The starting day of the work;
- The grounds for the temporary nature of the contract and the (estimated) expiry date of the contract;
- at the employer’s initiative, the employment contract can only be temporary for a valid ground mentioned in the contract. This can be the duration of the work, the replacement of an existing employee, seasonal work etc. In case of more than one employment contracts of limited duration, each of them must have a valid ground;
- Any employment contract without a valid ground is considered a permanent contract;
- If the contract is of limited duration, neither party can terminate unilaterally before its end, unless there is a specific stipulation in the contract;
- A long-term unemployed person can be engaged for an employment relationship of limited duration of less than one year without any specific ground;
- trial period
- A trial period is valid only, if it is mentioned in the employment contract;
- The trial period can’t be longer than six months, and in a contract of limited duration, only half of the contract duration, in any case not more than six months;
- During the trial period each party can terminate the contract without any reason or notice;
- In no case the ground for termination can be improper or discriminating;
- The place of work or a document of the grounds on which the employee works in different locations;
- It is useful to define the place of work as precisely and as comprehensively as possible. It will be reflected on the employer’s right to designate the location of work and the employee’s right to have the travel costs reimbursed.
- Main duties
- The definition of the duties has an impact on the possibilities of the employer to modify the description of duties and assign new tasks, and on the other hand, on the employee’s obligation to accept changes.
- The collective agreement applied
- If the employer has the membership of a national confederation that has signed a collective agreement, this will be applied;
- If the employer is not under a collective agreement, the sector of the work done defines the universal agreement generally applicable, if such a collective agreement exists;
- Many sectors have no universal agreement, in which case normal and reasonable conditions of employment are applied, of course according to the minimum conditions of the law;
- Salary and its calculation base and periodicity
- Any salary can’t be less than the minimum defined in the collective agreement;
- The usual periodicity is maximally one month, and two weeks, if the time wage is based on a period shorter than one week (hourly pay) or a piece rate;
- The salary or wages is usually paid at the end of the accrual period, unless otherwise agreed;
- At the end of the employment relationship, the salary or wages and the holiday pay, if applicable, must be paid on the last day or work, unless there is a stipulation in the contract of its payment on the next normal pay day;
- The working hours; for variable working hours agreed on at the employer’s initiative (on-demand worker), the latter must give an explication on the situations in which and to which intent the employer needs this kind of labor;
- In case of variable working hours, the minimum number of hours defined in the clause of an on-demand worker (a so-called zero-hours contract) can’t be agreed, at the employer’s initiative, smaller than the actual need is. Supposing the real need is 15 hours a week, the contract may not define between 0 and 40 hours a week, but the minimum working time has to be the exact 15 hours;
- calculation of the annual leave
- The Holiday Act contains the minimum provisions, but a collective agreement can define different holiday entitlements;
- Notice in case of termination and its calculation.
- The Employment Contracts Act define the general periods of notice, but collective agreements can stipulate longer notices than the law.
If the operation is based on occasional temporary work, the employment contract can be drawn up in the beginning of the employment relationship, adapting the starting day, the period of work, the working hours and the salary or wages according to the operations, e.g. ”the employee will be called on-demand”, ”the duration of the employment will be according to each duty”. The salary will be defined in accordance with the method agreed in the cooperative but within the minimum conditions of the collective agreement.
Collective agreement (työehtosopimus or “TES”)
Every employer is required to apply the universal collective agreement of the sector or the one the entity is bound with because of its membership in a national federation, if such agreements exist. The universal collective agreements are available in Finnish at Finlex site: https://www.finlex.fi/fi/viranomaiset/tyoehto/.
The labor inspectorates and the social partners can assist in the choice of the right agreement https://www.tyosuojelu.fi/tietoa-meista/yhteystiedot/.
Annual leave
In every employment relationship, the employee acquires a holiday entitlement per year or an annual leave payment. The Holiday Act defines the minimum conditions applied https://www.finlex.fi/fi/laki/ajantasa/2005/20050162?search%5Btype%5D=pika&search%5Bpika%5D=vuosilomalaki.
In principle, an employee is entitled to two days of annual holiday for working during one month in his or her first year of employment, and later two and a half day per month. The holiday pay is paid during this holiday.
If the employment contract ends before the holiday, a holiday payment is added to the salary or wages, amounting to between 9 and 11,5 % of the salary, depending on the duration of employment.
More often than not, collective agreements have better clauses for annual holiday and holiday payment, so it pays go know one’s own agreement.
Occupational health care
Every employer with one employee or more is required to have a written contract with a private medical center authorized to provide occupational health care services or with a health center, defining the contents and the operations included in the occupational health care necessary for the job.
Occupational Health Act https://www.finlex.fi/fi/laki/ajantasa/2001/20011383?search%5Btype%5D=pika&search%5Bpika%5D=ty%C3%B6terveyshuolto.
The statutory occupational health care usually includes only the inspection of the conditions at the workplace and the establishment of a plan for ensuring the employee’s well-being. The provision of actual health care services for the benefit of the employees is voluntary.. The labor inspectorate controls that the employer has organized and realized the statutory occupational health services.