The law of change security for dismissed employees requires outplacement training

In the beginning of 2017 there came a new amendment to the Employment Contracts Act, which regulates the dismissed employees' change security.

According to the Finnish Government's change security law, organizations are obligated to provide outplacement training for their dismissed employees. The law entered into force on January 1, 2017, and it brings changes to companies employing more than 30 people. What does this mean for organizations?

The main points of the change security law in a nutshell

The change security law concerns employers that employ more than 30 workers and employees that have worked for the same employer for at least five years continuously. The law amendment concerns situations where co-operation negotiations have begun in 2017.

What change security law requires

  • The employer must pay for the dismissed employee's training program, which promotes re-employment, due to co-ordination negotiations.
  • The value of the training program must correspond to the person's one-month salary or the average monthly salary of those working in the same office, whichever is the greater.
  • The training must be arranged no later than two months after the end of the term of notice.

Training can be organized as outplacement coaching individually or in groups.

How can outplacement services pay for themselves?

More costs, are bound to say many companies struggling with their financial situations and employee co-operation negotiations. In addition to paying termination period salaries, companies ought now also to pay for a job search coaching for laid-off personnel, at least for those who have worked for five or more years in the organization. Furthermore, the value of the service should correspond to the monthly salary of the laid-off employee, and thus cannot be crossed off by low-cost online courses.

So, let’s think about it in more detail. In addition to the costs mentioned above, employee co-operation negotiations and dismissals bring various invisible costs that basically form the part of the iceberg below the surface. This part is significantly bigger than the part floating on the surface. The costs covered below are related to factors that aren’t easily measured. They have to do with atmosphere, motivation, productivity, employer image – and yes, employer responsibility.

Taking care of the laid-off personnel also helps to maintain the wellbeing and motivation amongst the remaining personnel, as well as in getting faster back to the level prior to the negotiations. After all, the remaining personnel doesn’t only experience relief of getting to continue at their job whereas some are laid off. Quite the contrary, they experience grief for the departing colleagues and surprisingly often also guilt – why do I get to continue when others must leave? The knowledge that the departing persons are provided with professional help in getting a new start eases the atmosphere and helps to regain good work motivation. And this shows in the organization’s results.

Outplacement service builds a good employer image

A good employer image is not built merely by the employer using reliable and skilled cooperation partners in providing job search coaching. It is also built by giving the departing persons the chance to express their feelings with a skillful coach and to look to the future. Often the start of a coaching is filled by anger towards the former employer, but as the coaching proceeds, the anger fades away and conversation turns towards how the coachee will start to build the near future for oneself. Thus, there is no need to moan about the former employer to one’s friends and acquaintances, or let alone in the social media. A good employer image presents itself in recruitments, commitment and in customers’ behavior. And that all shows in the bottom line.

Fulfilling corporate social responsibility by providing outplacement services and by taking care of superiors in challenging situations as well as the remaining personnel creates an atmosphere which has security and caring in the center. Unfortunately, dismissal situations continue to be part of the future. Let’s make them as humane as possible.

The writer is Päivi Montgomery.

Päivi is a career counselor and a coach responsible for developing career services.