Temporary lay-offs are a Finnish version of organising work for everybody

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The Finnish manufacturer of metal-based components and systems, Rautaruukki, announced some weeks ago that it was to lay off a total of 3,200 employees.
      It is obvious that the entire workforce would not be on an obligatory unpaid holiday at the same time. Even though the company’s production has declined considerably, there is still work and workers are needed all the year round.
      Rautaruukki will divide the decreased workload between its employees. If temporary lay-offs were not possible, the company would most likely dismiss more people than it now does.
     
Temporary lay-offs are a Finnish version of organising work to everybody.
      In the course of the current recession, the option of temporary lay-offs has been used frequently. According to the most recent statistics, more than 50,000 Finnish employees have received a notification of a forced unpaid vacation. Today the figure may already be higher.
     
Temporary lay-offs have been regarded as a perfect way to avoid permanent dismissals, but employees are hurt in any case, as they have to manage without their salaries.
      However, those who belong to an unemployment fund are entitled to an earnings-related unemployment allowance.
      ”It is better that a larger number of people are laid off temporarily than that a few employees are dismissed permanently”, says Pekka Tiainen, an official at the Ministry of Employment and the Economy.
     
Tiainen hopes to see an increase in other methods of dividing work during the recession, such as part-time jobs, cut weekly hours, and the so-called job alternation leave.
      ”It is shortsighted to dismiss employees permanently now. The workforce size is declining, which means that there will not be enough employees when the boom period starts, only exacerbating the manpower need”, Tiainen argues.
      The record unemployment caused by the recession of the early 1990s was ”taken care of” by job training.
      Professionals were forced to learn how to answer the phone and how to switch on an overhead projector. The term "job training" or "labour market training" became a swear word.
     
Today’s magic term is "in-service training". The aim is to provide employees with new skills according to their own wishes.
      In-service education has been used with success during the upswing period. Now it is time to see how the method works when all industries are tending to downsize their workforce and there is not much demand for new employees.
      The Finnish system of temporary lay-offs is said to be quite unique on a global scale, even though the system in Norway bears similarities to the one used in Finland.
     
In Germany the state has introduced a so-called Kurzarbeit (”short-time work”), an arrangement whereby the employees of a given company can work shorter hours for a certain period.
      The state pays the employee 60-67% of the lost earnings.
      The company is also entitled to apply for some compensation, provided that it does not dismiss its employees permanently.
      Germany has reserved EUR 4 billion to cover the Kurzarbeit package in 2009-2010. Particularly the automobile, electrical, and metal industries have been keen on applying for a permit to work shorter hours.
     
The system of shortened working hours has secured the jobs of many French employees, while the French labour regulations allow flexible work arrangements.
      To rescue the domestic car industry, France has announced EUR 6.5 billion in loans to the national car manufacturers in a bid to save jobs and to continue R&D, in order to produce ”green” cars for when customers start buying again.


Previously in HS International Edition:
  Temporary lay-offs unique Finnish labour policy contrivance (10.2.2009)

Links:
  Ministry of Employment and the Economy

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