This summary of age discrimination law in Finland has been prepared by Dittmar & Indrenius, the Ius Laboris member for Finland: www.dittmar.fi.
Age discrimination in Finland is prohibited by the Finnish Constitution (731/1999, as amended), the Non-Discrimination Act (1325/2014, as amended) and the Employment Contracts Act (55/2001, as amended). The new Non-Discrimination Act was passed on 1 January 2015. While the previous Non-Discrimination Act (21/2004) implemented the Non-Discrimination Directive (2000/43/EC) and the Non-Discrimination in Employment Directive (2000/78/EC) in Finland, the new act is applicable at the national level, aimed at enhancing the Finnish system for civil rights and bringing all discriminating grounds under the same remedies and sanctions.
The fundamental prohibition of non-discrimination is contained in section 6 of the Finnish Constitution. This states that everyone is equal before the law. Accordingly, no one shall be treated differently from other persons on the grounds of age. The Non-Discrimination Act and the Employment Contracts Act contain more detailed provisions on age discrimination.
Discrimination is defined in section 8 of the Non-Discrimination Act. Its scope corresponds to the discrimination provision of the Finnish Constitution. Generally, the scope of non-discrimination provisions of Finland is slightly wider than in the EC directives and “gold plated”. Before the Non-Discrimination Act was enacted, the only provisions that prohibited discrimination in any way were the Finnish Constitution, the Employment Contracts Act and the Act on Equality between Women and Men (609/1986, as amended), which concerned only the discrimination on the basis of gender. However, the equality of the citizens has been one of the major principles in Finland ever since enacting the Constitution of Finland (94/1919, repealed), which was the predecessor of the Finnish Constitution.
The Non-Discrimination Act and the Employment Contracts Act prohibits any unjustified discrimination against employees on various bases, for example on the basis of age. Employees must be treated equally unless there is a distinct and acceptable reason to act otherwise. Discrimination law also applies in recruitment.
Age related non-discrimination provisions of the Non-Discrimination Act apply to public and private activities in the context of conditions for access to self-employment or means of livelihood and support for business activities, recruitment, employment and such employment related conditions, access to training, membership or involvement in an organisation. The provisions do not apply to aims or content of education or matters relating to immigrant applications.
The Employment Contracts Act prohibits the employer from exercising any unjustified discrimination against employees on the basis of age. Essentially this means that the employer must not promote or favour some employees over other employees in any way without justified reason. This also applies to temporary employees, to some extent, but promotions or related matters are generally not regarded as the discrimination against temporary employees.
WHAT ENFORCEMENT/REMEDIES EXIST?
An employer may be found liable for damages if it intentionally or negligently breaches the obligations from the employment contract or the Employment Contract Act. An employer cannot contract out of discrimination law.
If the employer is found guilty of discrimination, the employee may be eligible for a compensation the amount of which depends on the type and extent of the discrimination and its duration and circumstances. Legislation sets no maximum amount for the compensation, which is in compliance with EU's established legal practice.
In cases of discrimination involving redundancy, an employee will be entitled to additional compensation for loss of earnings. The amount of compensation is a matter of discretion and varies from 3 to 24 months’ salary (if the redundant employee is a trade union representative, it can be up to 30 months’ salary).
An employer may face criminal charges according to the Finnish Penal Code (39/1889, as amended). An employer or its representative may be subjected to a fine or imprisonment for a maximum of six months if found guilty for work discrimination without an important and justifiable reason. The same applies to public services.
It should be noted as well, that the aforesaid compensations or other liabilities do not limit the possibility to receive payment from damages under the Tort Liability Act (412/1974, as amended) or any other relevant legislation.
HOW COMMON ARE CLAIMS?
In Finland, claims regarding age discrimination are not as common as discrimination claims on other grounds, for example on the basis of gender or race. Cases which solely involve age discrimination issues are very rare and there have not been any significant claims in the past few years.
It is possible that the claims regarding age discrimination will become more common in the future due to demographic development in Finland.
What claims are most common and what are the trickiest issues for employers?
Many claims regarding discrimination, for example on the basis of age, are presented alongside other claims, especially in cases regarding a groundless termination of an employment contract.
Employers face difficult decisions especially in collective redundancies, in which the employer has to be cautious not to lay-off or terminate the employment contracts of only or mostly elder or junior employees unless there is justified reason. If the redundant employee claims that the employer has discriminated against him or her, and it is found culpable, the employer is obliged to present counter-evidence. The burden of proof remains with the employer.
In some cases the offering of early retirement buyouts may trigger the discrimination claims. This should be noted in restructuring of the company or in other similar situations, when there is a need for collective redundancies.
ARE THERE ANY SPECIFIC EXCEPTIONS IN YOUR LAW?
Discrimination may be justified if there is an objectively and appropriately founded justified reason for the related employment policy or when there are age limits for qualifying for retirement or invalidity benefits within the social security. In some situations, age discrimination is justified due to special requirements of the occupation, for example if physical stamina is required for certain occupations.
There is a possibility for "positive discrimination" in order to achieve genuine equality. These actions must be appropriate to the objectives of such actions and may not be used as means to discriminate against certain employees.
Some provisions of the Employment Contracts Act and collective agreements are, arguably, indirectly age discriminatory. For example longer notice periods and some salary provisions may be applicable only to employees that have been in service of the employer for longer time. However, these have been commonly accepted and are not treated as discriminatory as long as the employer follows the provisions of the Employment Contracts Act.
The Finnish earnings-related pensions were reformed in the beginning of 2017. The aim of the reform was to lengthen careers and, consequently, to ensure the sufficiency of pensions. Generally, an employee may retire on an earnings-related old-age pension when the employee reaches their minimum retirement age, which depends on their year of birth. For employees born in or before 1954, the minimum age for retirement is generally 63 years. For employees born between 1955 and 1964, the minimum age rises by 3 months per age class starting with those born in 1955, who may retire when they have reached the age of 63 years and 3 months. For employees born in or after 1965, the retirement ages are linked to their life expectancy. There are some exceptions to the general retirement age limits, especially in military occupations.
The pension system shall be amended from time to time on a regular basis also after the reform in 2017.
Unless there is an exception provided by law or the parties of the employment contract agree otherwise, the employment contract expires automatically when the employee reaches their maximum retirement age, which is generally 68-70 years, depending on the age class. The employee may continue working after reaching the maximum retirement age without accruing any more pensions. The employee is entitled to choose the retirement age but there is the potential for age discrimination claims if the employer requests the employee to inform them when he/she is planning to retire.
The retirement age can be agreed in the employment contract. If the agreed retirement age is below the applicable maximum retirement age, the clause may be invalid in certain circumstances. This applies in situations when the expected pension of the employee would not correspond to the later retirement pension.
In 2014, the Supreme Court gave a ruling concerning the permissibility of employment political actions of an individual employer. The employer was committed to pay compensation for redundant employees as a part of the employer's change security policy. An employee was entitled to an extra benefit of the Finnish earnings-related unemployment allowance because of his age. Due to this, he had not received the compensation from the employer. The employer explained that the compensation was meant for redundant employees in vulnerable positions only and by allocating the compensation to these employees the actual equality of the redundant employees had been secured. The court considered that the employer had put the employee in unfavourable position compared to other employees because of his age. However, the employer had an objectively and appropriately justified legitimate object referred to in the Non-Discrimination Act and hence, the employer had not breached the non-discrimination obligation set out in Employment Contracts Act.
In a recent case from the Administrative Court of Turku, an individual born in 1962 had applied for a training post for specialist dentists. Although the individual was one of the most distinguished applicants, only significantly younger applicants had been invited for an interview. The employer claimed that the difference in treatment was justified because it was based on the need for a reasonable period of employment before retirement, as provided for in article 6(c) of the Non-Discrimination in Employment Directive (2000/78/EC). However, as Finland had not used its national margin for manoeuvre to implement the said exception allowed by the Directive, the Administrative Court of Turku ruled that the procedure of the local authority was discriminatory.
In another case, the question was about whether the shifting of a 59-year-old employee to a part-time role and replacing him with a younger colleague was discriminatory on the basis of age. In this case, the older employee resigned after shifting to a part-time work and claimed that they had terminated the employment contract due to the discrimination by the employer. The employer claimed that both the poor performance of the employee and the age structure of the customers were the grounds for shifting the employee to a part-time role.
The Court of Appeal of Turku ruled that it was not necessary to shift an older employee to a part-time job and thus, the employer was found guilty of age discrimination. It was ruled that the employment contract had been terminated without grounds. As a result, the employer had to compensate the employee with 12-months’ salary and 8,000 Euros.
The Finnish Chancellor of Justice responsible for the supervision of authorities gave a ruling in 2017 regarding the job advertising of a Finnish municipality. The municipality had published a job advertisement seeking a project coordinator for city museums, who should be under the age of 30. Although the work was linked to a special ministry allowance aimed to enhance the employment of young people and recent graduates, the allowance itself did not contain any age restrictions. As the municipality had no justified reason for the difference in treatment, the Chancellor of Justice found that the job advertisement was contrary to the prohibition of discrimination.