This summary of age discrimination law in Finland has been prepared by Dittmar & Indrenius, the Ius Laboris member for Finland: www.dittmar.fi.
OVERVIEW
OVERVIEW
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. Discrimination is also defined in Section 8 of the Non-Discrimination Act. Its scope corresponds to the discrimination provision of the Finnish Constitution.
The Non-Discrimination Act and the Employment Contracts Act contain more detailed provisions on age discrimination and prohibit any unjustified discrimination against employees on various bases, e.g., on the basis of age. Employees must be treated equally unless there would be a distinct and acceptable reason to act otherwise. Non-discrimination obligations also apply in recruitment.
WHO'S COVERED
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 private or family activities or religious practice.
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. Fixed-term employees shall be treated in the same way as permanent employees in terms of age discrimination matters.
WHAT ENFORCEMENT/REMEDIES EXIST?
An employer may be liable for damages if it intentionally or negligently breaches its obligations under the employment contract or the Finnish Employment Contracts Act. The employer cannot contractually exclude the application of discrimination law.
If the employer is found to have engaged in discrimination, the employee can claim compensation, the amount of which depends on the type and extent of the discrimination, its duration and circumstances. Legislation sets no maximum amount for the compensation, which is in compliance with EU's established legal practice. Compensation must be claimed before a district court and must be claimed within two years of the discriminatory conduct.
In cases of discrimination involving redundancy, an employee may be entitled to additional compensation for termination of employment. The amount of compensation is a matter of discretion and varies from 3 to 24 months’ salary.
An employer may face criminal charges according to the Finnish Criminal 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 above mentioned 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.
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 unfair dismissal cases.
In collective redundancy situations, employers should be mindful of potential age discrimination claims if the target of redundancies or lay-offs is mainly a group of people of a certain age. To rebut the presumption of discrimination, the employer must prove that there was an acceptable reason for its conduct other than age.
Offering of early retirement buyouts may trigger discrimination claims. This should be noted in restructurings or in other similar situations where 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 bargaining agreements may be seen as "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 applicable law.
RETIREMENT
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 is increased 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.
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 pension. 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 of the planned retirement age.
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.
INTERESTING CASES
There have not been many major cases on age discrimination in recent years. 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 argued 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.
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.
The Labour Court gave a ruling in 2021 on invalidity of a provision of a collective bargaining agreement. The collective bargaining agreement of education personnel in the municipal sector contained a provision on entitlement to annual bonus based on years of service. The case concerned an employee who had retired from military service and was already receiving pension benefits, and who was not entitled to the annual bonus based on the employee's prior employment experience, as provided in the collective bargaining agreement. The Labour Court ruled that this provision was discriminatory based on age, as the employee receiving pension benefits was paid a lower salary for the same work compared to an employee with similar experience not receiving pension benefits.