Government’s proposal would introduce different rules for similar stores
In Sonkajärvi among others, the K and S Group’s food stores are located side by side. Photo: Minna Raitavuo
Two stores located side by side on the same street, different legislation. This will be one of the consequences if the government’s proposal on a new dismissal act is approved. PAM’s expert questions the proposal which would make companies and their employees more unequal.
In many Finnish localities, the biggest retail chains’, S Group and K Group, food stores stand next or opposite to each other. If the government’s proposal to make it easier for smaller companies to remove employees on person-based grounds goes through, different rules may soon apply to these neighbours and their employees, among others.
The reason for this is the different corporate structure of K and S Groups. S Group has 20 regional cooperative stores with altogether approximately 40,000 employees, i.e. on average 2,000 employees per each cooperative store. Single stores are an integral part of their regional cooperative so there are no stores with less than 20 employees. K Group’s food stores, in turn, are retailer-led and retailer-owned small businesses – even if a single retailer sometimes has several stores to manage. In practice, most K Group employees work in companies with less than 20 employees.
If the legislative proposal was approved as such stores located side by side – even of similar size – could have different legislative criteria for person-based dismissal. And, in a similar way, other sectors would face new regulations as well, as soon as the 20 employees limit is exceeded.
“It is peculiar that the legislative proposal may place stores of similar size located next to each other in an unequal position as an employer. On the basis of our experience, bigger companies have more developed processes to sometimes unavoidable dismissals. Therefore, a more relevant issue would be to think about improving these processes in smaller companies”, PAM's Legal Manager Arja Pohjola points out.
The Finnish government proposed, in its spring budget framework talks, that person-based dismissal in companies with a maximum of 20 employees be facilitated by amended legislation. PAM has been against the proposal as it weakens the employees’ position and places them in an unequal situation depending on the size of their employer. Also, many experts do not believe that this is the right means to achieve the government’s objective of reducing unemployment: there is no evidence of its effectiveness.