Short period employees win pension rights

Helsinki (05.01.1998 - Juhani Artto) Those employed for less than one month will earn increased pension rights from 1.1.1998. This is due to a law that took effect at the beginning of the year. Up to the end of last year private employers were obliged to contribute to pension funds only where employment lasted longer than one month.

The new regulation does not, however, apply to employees under 23 years of age, nor to those earning less than FIM 3,650 per year (FIM 1.00 = USD 0.19).

The reform is a result of pressure exerted by the trade unions.

Employers began to favour short period employment during the slump in the Finnish economy in the early 1990s. Some of them deliberately reduced their social contributions by artificially dividing employment into short periods.

Short period employment is most common in the hotel and catering, commercial and cleaning sectors. Educational institutions and the public sector also use short period employment.

The role of private employment companies has expanded rapidly in the labour market as various forms of non-typical employment have become common. More than 400,000 workers in Finland, one sixth of those in working life, are in short period, fixed period or other non-typical employment.

The Hotel and Restaurant Workers Union has campaigned for the reform since
the early 1990s. The president of the union, Jorma Kallio, observes that 80 per
cent of new recruits in the hotel and catering sector go into short period or fixed
period employment, and only 20 per cent into full-time, continuous employment.

Kallio emphasizes that short period employment is not entirely beneficial to employers, since it adds to the costs of staff training and undermines the loyalty of employees to the employer.

The central trade union organisation SAK runs a special project to provide essential information to those in short period jobs. The project has a nationwide toll-free telephone number.