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The most asked transition security question and how legislation should be interpreted
The following answers that we have compiled from different sources have not been separately verified and we are not responsible for their accuracy. Therefore, we always recommend you to be in contact with your own legal adviser or, for example, with your employers' union to ensure the matter and application practice in your specific industry.
How is the value of coaching determined?
The coaching or training paid by the employer shall correspond to the employee's total monthly salary or the average monthly earnings of the staff employed by the employer, whichever is greater. For monthly and weekly-paid employees, the value of training or coaching is relatively easy to calculate.
The principles used to calculate annual holiday pay are taken into account in defining the concept of wages. Thus, when calculating deferred monthly pay, no consideration is taken, for example, to distributions of profits, cash profit bonus, contributions to the Personnel Fund, royalties, benefits arising from the exercise of the employee stock option, or performance-based on employment relationships determined by a change in the value of the company's share. Travel and other expenses are also not taken into account.
In the case of an hourly-paid employee with varying working hours or a commission or contract-paid employee, the value of the training or coaching shall be calculated on the basis of the average salary of the employee.
The average monthly earnings of staff shall be obtained by the addition of monthly earnings and by dividing the amount of the euro by the number of staff at the office. The CEO's salary is not taken into account in the calculation because he or she is not employed. In the case of government agencies and institutions, the salary on which the value of coaching and training is based for one month, and the average monthly earnings of staff are calculated on the basis of Section 7 of the General Service and Collective Agreement concerning the remuneration of the State for the remuneration of the period of absence.
Does the value of the coaching include VAT?
Yes, it does. (This interpretation by the EK of 5 January 1777; the draft law does not take a position)
What if the employee refuses training? What should be taken into account that the employer is sure to be able to prove that he has fulfilled the obligation?
The employer is obliged to provide training, but the employee decides whether or not to accept it. There's no compulsion to do this. The employer best demonstrates this by requesting a signature on the contract/paper to be contracted.
Who decides on education? Employee/giver?
The employer decides on the training. It is possible that the employer will agree with the employees' representatives. The collective agreement in the field can also comment on this now or in the future.
Do I have to spend all the money?
The law determines what amount must be spent. A higher amount may be involved, but a smaller amount may be agreed differently together with staff representatives (shop stewards or official staff representatives).
Does the amount of ELY support affect the amount to be paid?
The law does not really take a position on this. The act also talks about the value of education, and it states that since it makes no sense at the level of the law to provide more precisely for the content or targeting of coaching or training, the procedure for acquiring it, or the setting of its value, a collective agreement could agree on these matters differently from the law. Similarly, the employer and personnel could agree partly differently from the law, subject to the collective agreement.
The surest thing to do is to agree on this in advance with the personnel representatives.
If a person is immediately employed, does the employer still have an obligation to provide training or coaching that supports employment?
The law does not take a position on this, so in principle, that is the case. In practice, it can be difficult for a person at work to take advantage of training or coaching while on the job, but this should depend on how the training or coaching has been decided to be acquired or arranged.
Is the average salary calculated according to the site? Will the salary of the Group's management be taken into account?
The value of the training or coaching shall correspond to the employee's calculated salary for one month or the average monthly earnings of the staff working at the same site as the dismissed employee, whichever is the higher. The average monthly earnings of the staff employed by the employer are obtained by adding up the monthly earnings and dividing the amount of the euro by the number of staff on the place of business. The CEO's salary is not taken into account in the calculation because he or she is not employed. The salaries of other employed managers, on the other hand, are included in the calculation.
Can the training to promote employment start within 2 months of dismissal or should it be fully completed within the 2-month period?
The training or coaching must be carried out after the termination of the notice period within two months. For weighty reasons, coaching or training can be partially or fully targeted at a later date. This may be, for example, a situation where the training acquired continues beyond the time limit due to the schedule of the person carrying out the training. A weighty reason would also be that appropriate coaching or training is not available within the time limit, that the arranged training or training is cancelled for reasons not attributable to the employer, or any other comparable reason.
What matters should be agreed on locally?
All possible matters related to the security of change, which are considered important for the implementation of the act and for the implementation of appropriate practice in the company, site, etc. These issues may vary from company to company and/or industry, but also locally.
How is transition security law changing?
At the beginning of 2023, a new transition security package will enter into force, which applies to persons aged 55 or over who have worked for the same employer for more than 5 years and who have been dismissed for production or economic reasons.
The aim of the reform is to improve the re-employment and coping at work of people aged 55 and over. Individuals will also retain the right to existing transition security, which provides a good opportunity for job search and career coaching.
The reform includes for the employee:
- A change security allowance equivalent to the one-month salary of the dismissed person¨
- Change security training, which is worth the equivalent of two months' salary for the dismissed person
- Right to extended employment leave with notice
- The abolition of the right to an additional day for those born in 1965 and later
- Improved access to part-time work
What should employers know about the transition security reform?
It is important for the employer to remember their obligation to inform the dismissed person about the transition security, the right to transition security training, and the transition security allowance. The employer must also arrange the possibility of extended employment leave with notice and improved part-time work.
With the abolition of the right to an additional day of unemployment security, the unemployment security co-payment charged to employers will be abolished for those born in 1965 and later.
As of 1.1.2023, the employer should also be prepared for a possible transition security fee that the Employment Fund will collect if certain conditions in dismissals are met. The Employment Fund finances this transition security package with a transition security fee charged from the employer, which includes the part to be collected from the dismissing employer and the common part. The common part is financed by all employers by increasing the unemployment insurance contribution.