Leased Labour
In labour leasing a contract exists between the company leasing out the employee (providing company) and the recruiting company being the client (user company), and between the providing company and the employee. In practice, this means that there is no contractual relationship between the employee and the user company. The employee’s obligation to work for the user company is derived from the contract between the providing company and the employee and the employee’s agreement in that contract to undertake work for the user company. The obligations of the employer in respect of leased labour are divided between the user company and the providing company. Consequently, it is e.g. desirable to make a separate confidentiality agreement between the employee and the user company.
Labour leasing helps companies for instance to get temporary or short-term labour in other ways than by recruiting employees directly. Labour leasing is an arrangement based on an agreement whereby the providing company allows the user company to use its employees in return for a consideration. Whilst working for the user company the employee is supervised and managed by the user company.
The working conditions of leased labour are determined in accordance with statutes governing contracts of employment, collective labour agreements and specific issues agreed upon between the employee and the employer. The collective bargaining agreement governing the employer is applied to the employment relationship between the employee and the providing company, which usually is the General Terms and Conditions for the temporary agency work industry (Henkilöstöpalvelualan työehtosopimus). In case no such applicable collective bargaining agreement exists, the user company’s collective bargaining agreement shall be applied. In case there is no collective bargain agreement binding neither the providing company nor the user company, the conditions regarding the salaries, working hours and annual leaves of the leased labor have to be at the minimum on the level of agreements and practices binding the user company or generally applied by it. It is recommendable to check that the business sector in question does not impose restrictions upon the use of leased labour. For instance, the Central Organisation of Finnish Industries and Employers (TT) (currently the Confederation of Finnish Industries (EK)) and the Central Organisation of Finnish Trade Unions (SAK) have concluded an agreement to limit the use of leased labour to even out peaks.
A new statute setting out the buyer’s investigation obligations and responsibility when using leased labour came into force in the beginning of 2007. The statute increases the user company’s obligation to ensure that the providing company has properly complied with its responsibilities as an employer. It is the responsibility of the user company to establish whether the providing company is registered in the preliminary tax withholding register, the employee register and the VAT register. In addition, the user company should obtain an extract from the Trade Register regarding the providing company, a certificate evidencing payment of tax or a certificate of tax debt, or a statement setting out a payment plan for the repayment of a tax debt. Furthermore, the obligation covers obtaining a pension insurance certificate and proof that payments due under it have been made or a payment plan in respect of such has been put in place. A report setting out the applicable collective bargaining agreement or main provisions of the employment relationships is also required. All these obligations are equally applicable where the leased labour is from a foreign providing company.
The user company does not have an establishment obligation if the providing company’s business is stable or when the use of the leased labour lasts no longer than 10 days. Regional State Administrative Agency can pass negligence fee for a negligence of the establishment obligation
For further information, see [Collective Agreements].