A layoff is the temporary interruption of work and pay based on the initiative of the employer while the employment relationship remains otherwise effective. An employer can lay off their employees on financial and production-related grounds or if the employer’s opportunity to offer work has temporarily decreased. An employer can lay off employees for a fixed term or indefinitely. The layoff can be implemented either full-time or by reducing the employer’s daily or weekly working time.
Laying off a fixed-term employee
Usually, an employer cannot lay off an employee in a fixed-term employment relationship. If you have a fixed-term employment relationship, you can receive earnings-related daily allowance only if you are working as a substitute for another employee and the layoff would concern that employee if they were working. A fixed-term employee can be laid off if the layoff is based on financial and production-related grounds.
Circumstances comparable to a layoff
You can also receive earnings-related daily allowance for circumstances comparable to a layoff. Circumstances comparable to a layoff are
- inability to work due to reasons beyond the employee’s or employer’s control (for instance a fire at the workplace, a natural disaster)
- an agreement made when the employment relationship started regarding the interruption of work and pay (concerns for instance some teaching assistants and teachers)
- the suspension of a public official from their office.
If you have originally agreed to inconsistent working hours (for example 0-40 hours a week) then you are not entitled to earnings-related daily allowance on the grounds of a layoff. You may however be eligible for adjusted daily allowance based on your part-time job.
What to do if you are laid off
If you are laid off, register as an unemployed job seeker through the labor authority’s E-service on the first day of your layoff at the very latest. Once you have activated your status as a job seeker, follow the labor authority’s instructions to keep your job seeker status active. The Unemployment Fund can set your waiting period and pay daily allowance only for the time when your job seeker status has been active.
After about two weeks of your layoff, you can apply for unemployment benefits either through the Unemployment Fund or Kela. As a member of the Unemployment Fund for Higher Educated Employees Erko, you will send your application to Erko. You can apply for earnings-related daily allowance online or you can send the Fund an earnings-related daily allowance application by mail. Fill in the application with care and attach the necessary attachments. By filling out the application as instructed you can speed up its processing time.
Fill in your application beginning with the first day of your layoff so that the Fund can set your possible waiting period. As your layoff continues, send your follow-up applications monthly. Despite the monthly application period, please report your information in full calendar weeks on the application, if the month starts or ends in the middle of the week. Apply for daily allowance within 3 months of the layoff days the application concerns. Applications more than 3 months old are considered late and they will be rejected.
Inform the Fund of any changes that happen during your unemployment and that could affect your right to daily allowance (such as work, earned income, entrepreneurship, studies, sick leave, or social benefits granted to your family). Also inform the labor authority of any changes as needed (for example if they concern work, entrepreneurship, studies or sick leave).
Activating your status as a job seeker when laid off
When you become unemployed or laid off, the payment of unemployment benefits requires that you have registered as an unemployed job seeker with the labor authority (formerly known as the TE Office). From now on the labor authority will be your municipality or employment area due to changes at the beginning of 2025.
Your job seeker status with the labor authority is primarily activated through Job Market Finland’s E-service using Suomi.fi identification. If you cannot log in to Job Market Finland, the only way you can activate your status as a job seeker is by personally contacting the labor authority. You can find your region’s labor authority and the relevant contact information through Job Market Finland’s regional pages.
Please also familiarize yourself with the labor authority’s instructions in case of possible error situations concerning the activation of job seeker status.