Transition Security

Transition Security of employees is a statutory approach to redundancies. The parties to Transition Security process are the employer, the employees and the employment authorities. It consists of obligations for the employer and the employment authorities laid down in various laws. Broadly speaking, Transition Security includes, inter alia, also change negotiations under the Co-operation Act [Change Negotiations].

The Transition Security has been enacted for supporting employees who have been dismissed for productional and economic reasons or due to restructuring of the employer's activities, and to expedite their re-employment. It does not apply to employment relationships terminated by contract or to terminations of employment caused by the employee him or herself.

An employer who is going to dismiss 10 or more employees must inform the employment authorities without delay and inform the employees in scope of their right to an employment plan.

An employer who regularly employs 30 or more employees  must provide occupational health care services to a dismissed employee if he/she has been employed by the employer for at least 5 years continuously, until such employee is employed by a new employer, but for no longer than 6 months after the employee has been released from the obligation to work.

The employer must allow employee on notice period to keep certain amount of days off as paid employment leave. They are intended for activities promoting re-employment, such as drawing up an employment plan and applying for a job. They may also be used for training to promote re-employment. The number of days of the employment leave depend on the age of the dismissed worker and the length of period of notice. If the employee is 55 years of age or older at the time of the notice of dismissal and the notice period is 1 month or less, the employment leave is 5 days, 15 days with 1 to 4 months' notice period and 25 days for longer than 4 months' notice period.  For employees under 55 years, the corresponding lengths of employment leave are 5 days, 10 days and 20 days. The use of the leave may not seriously harm the activities of the employer [Employee’s Right to Employment Leave].

An employer who regularly employs 30 or more employees has an obligation to provide employment coaching or training to a dismissed employee if he/she has been employed by the employer for a continuous period of at least five years. The training must take place within two months of the end of the employment relationship and must be equivalent to the employee's monthly salary or the average monthly salary of the staff in the same establishment, whichever is the higher.

An employee aged 55 or over who has worked continuously for the same employer for at least 5 years is entitled to a Transition Security allowance equal to one month's salary paid by the unemployment fund or KELA, and to Transition Security  training approximate of the value of two months' salary of the employee to be provided by the employment services. To be eligible for these benefits the dismissed person must register to the employment authority as a job seeker within 60 days of receiving the notice of termination. The unemployment fund or the KELA will pay the Transition Security allowance within three months after the end of the employment relationship, and it has no effect on unemployment or other benefits except living allowance. The employer has obligation to inform the person being notified of dismissal of these rights and their preconditions. The Transition Security training does not remove the employer's obligation to provide the dismissed person with above mentioned coaching or training for promoting his or her re-employment.

The Transition Security allowance and training offered by the employment authorities are financed partially by a supplementary contribution of unemployment insurance by all employers and partially by a Transition Security payment  by dismissing employer. In August each year, the Employment Fund calculates the amount of the supplementary contribution as part of its proposal for the following year's unemployment insurance payments.  The employer’s Transition Security payment is payable by the largest employers whose total of salary payments exceed the annually stipulated minimum threshold. A multiplier between 0 and 2.9 times depending on the total salary amount will be used on the monthly salary of the dismissed employee to calculate the actual Transition Security payment. The employment authorities have a calculator in their web pages for calculating the multiplier and applicable payment in each case.