Statement on the government proposal for acts amending the Unemployment Security Act and certain other acts (TAS 664/2023, issued 26.10.2023)

The Ombudsman for Equality was heard by the Parliament's Employment and Equality Committee on 27 October 2023.

In their statement, the Ombudsman for Equality expressed their extremely serious concern that the cuts proposed in the bill would especially target women in many respects and thus degrade equality between the genders. The Ombudsman reminded the government that the obligation to promote gender equality also applies to the legislator. 

The Government proposal degrades the status of women and has a negative impact on gender equality

Among other things, the government proposal proposes amendments to the Unemployment Security Act. The proposed amendments concern, for example, the employment condition for wage earners, the adjustment of unemployment benefits and the beginning of the right to unemployment benefits, as well as the child increases granted to unemployment benefits. 
It is apparent that these proposals will concern women and men differently. The assessments included in the proposal show that the proposed amendments will have an especially damaging effect on the status of women. 

Amendment of the employment condition 

An amendment is proposed to the wage-earners' employment condition is proposed according to which the employment condition for receiving a daily unemployment allowance would, in future, be determined according to the income obtained from the work. The employment condition would also be extended from the current six months or so to 12 months. The derogations applying to sectors with unusual working hours would be repealed for teachers, those working from home, and creative workers or performers.

According to the government proposal, the extension of the employment condition would concern women more than men in all age brackets below 50 (HE 73/2023, p. 29). The amendment would especially target women aged 30–39 (ibid., p. 67). The amendment would also affect a large number of people in total. Extending the employment condition will have a particular impact on female-dominated industries in which fixed-term employment is common, such as substitute teachers employed for one school year.

On the other hand, making the employment condition income-based will have a particular impact on people working on and off. Workers doing occasional part-time jobs or temporary jobs are mentioned as an example. This amendment would also apply to a large number of people, since 37% of earnings-related unemployment allowance recipients are estimated to be in such circumstances. (HE 73/2023, p. 31) 

The Ombudsman for Equality noted that fixed-term and part-time employment contracts as well as discrimination based on pregnancy and family leave should be examined more broadly when assessing the impact of the proposals.

a) Fixed-term employment contracts are more common among women than men

In 2021, 19% of female wage earners and 14% of male wage earners had a fixed-term employment relationship. According to Statistics Finland, there were 365,000 wage earners with a fixed-term employment contract in Finland in 2021. Women accounted for 214,000 and men for 151,000 of these. The number of fixed-term employees had increased by 43,000 from the previous year. The most common (71%) reason given for fixed-term employment was a lack of permanent employment. Nearly half of new employment contracts were fixed-term. This was more often the case for women than for men. 

b) Women work part-time more than men

In 2021, there were 473,000 part-time employees in Finland, representing 19% of all employees. Of the part-time workforce, 264,000 (24%) were women and 122,000 (13%) men. The number of part-time employees had increased by 58,000 from the previous year. A total of 118,000 of these part-time employees would have liked to work full time. 

c) Discrimination based on pregnancy and family leave is regrettably common in Finland

This is also apparent in the employment-related reports made to the Ombudsman for Equality. Discrimination based on pregnancy and family leave are some of the most common reasons for contacting the Ombudsman. It manifests as, for example, limiting the duration of fixed-term employment contracts due to pregnancy or family leave, or as difficulties when returning to work after family leave. 

In the Ombudsman for Equality's reports to Parliament in 2018 and 2022, the Ombudsman has proposed reinforcing the protection of fixed-term employees against pregnancy-based discrimination in employment legislation. Employment legislation should provide for a prohibition of failing to renew a fixed-term employment relationship based on pregnancy or family leave, along with a prohibition of limiting the duration of fixed-term employment relationships to the start of pregnancy or parental leave.

The government programme of Prime Minister Petteri Orpo states that it should be possible to make fixed-term employment contracts for one year without special grounds. Together with the proposed amendments to unemployment security legislation, the potential realisation of this entry would especially target women of child-bearing age. 

Based on the above, the Ombudsman for Equality has expressed their extremely serious concern over the impact of the proposed amendments on women and gender equality. 

Adjustment of the employment condition

A person who has accepted part-time or short-term work is paid an adjusted unemployment benefit. The government has proposed removing the exempted amount, that is, the portion of income not taken into account in calculating the adjusted unemployment benefit, from the adjusted unemployment benefit.

Furthermore, the government proposes an extension of the deductible period to seven days from the current five. A holiday remuneration paid at the end of full-time employment lasting more than two weeks would also prevent payment of the unemployment benefit for the period over which the holiday remuneration is allocated.

According to the government proposal, the removal of the exempt amount is estimated to affect women in particular. In 2022, 64% of all adjusted daily allowance recipients were women (61% of all recipients of unemployment benefits paid by the Social Insurance Institution of Finland). Women are the majority among recipients of adjusted earnings-related unemployment allowance or adjusted unemployment benefits in all age groups. (HE 73/2023, p. 42). Removing the periodisation of holiday remuneration would also affect women more than men, because more women than men have been given periodisation decisions in the 30–59 age bracket.

The Ombudsman for Equality expresses serious concern over the proposed amendments to the adjustment of unemployment benefits. Proposed amendments that mainly target women to such an extent cannot be considered acceptable in terms of gender equality.

Child increases to unemployment benefits

The proposal suggests abandoning the child increase to unemployment benefits. According to the proposal, approximately 81,000 beneficiaries received child increases to their unemployment benefits in 2022. Of all child increases, 58% were paid to women and 42% to men. (HE 73/2023, p. 44). 
The Ombudsman for Equality noted that the amendment should also be evaluated from the perspective of single-parent families, of which there are 120,000 in Finland. The majority of single parents (87%) are women. The proposed amendments would probably have significant effects on not only the income of these families, but on gender equality and child poverty as well.

Effects on fundamental and human rights

The Finnish Council of Regulatory Impact Analysis issued its statement on the draft government proposal to the Ministry of Social Affairs and Health on 12 October 2023. In its statement, the Council pointed out that the impact assessment should have taken into account the other social security reforms currently under preparation and their potential combined impact, especially on vulnerable groups. The Council found that it would also be important to evaluate the amendments' impacts on fundamental and human rights and whether such impacts would target the same groups. 

The Ombudsman for Equality concurs with the Finnish Council of Regulatory Impact Analysis's position. The Ombudsman also reminds the government that, in its decision issued on 15 February 2023, the European Committee of Social Rights found the Finnish level of social security too low. Among other things, the decision looked at the levels of the basic unemployment allowance, labour market subsidy and basic social assistance in relation to the average income in Finland. The Committee found the minimum benefits too low to cover the basic needs of the recipient as required by the updated European Social Charter. The Ombudsman for Equality recommends that Parliament take this decision into account. (TAS 664/2023)

The full statement (in Finnish) is available for review as an attachment (PDF).

30.10.2023