Preventing labour market crime
Labour market crime must be eradicated by strengthening the status of victims and their access to justice
Labour market crime goes beyond individual cases, and must therefore be tackled more systematically.
Objectives
- The statute of limitations for criminal offences and the deadlines for bringing civil actions related to remuneration for working time must be prolonged in order to secure more convictions for labour market offences and more effective recovery of pay claims. The sanctions for labour offences must be increased.
- A statutory right to collective lawsuits must be enacted giving trade unions independent standing to bring legal actions on behalf of an employee. This helps in situations where victims are afraid or unable to file suit. Trade unions need independent standing in civil actions relating to work life, gender equality and non-discrimination.
- The application period for the pay guarantee in the event of employer insolvency must be extended, the maximum payment must be increased, processing of applications must be expedited and the review process must be reformed. Victims are currently too often left without compensation for work that they have already done, with no recoverable pay claim.
Grounds
Legislation to tackle and prevent exploitation at work must be improved. Monitoring of working conditions and the rights of victims must be strengthened. Statutes of limitation and time limits for filing suit are also too short, as resolving work-related crimes and related working time disputes is exceptionally difficult and time consuming.
Such matters as underpayment of wages, excessive working hours and inadequate records of working time easily fall into limbo between various enforcement systems at the moment. Monitoring and penalties remain inadequate when these matters are detected. The risk of exposure and the scale of penalties must be sufficiently severe to constitute a genuine deterrent.
Attention should be paid to the status of the victim in legal proceedings. In particular, it is often impossible for employees in vulnerable situations to take legal action against their employers. Collective standing would be useful in such cases, as no single individual would be branded a “troublemaker”, and the action would instead be brought by a trade union.
Legal standing for trade unions and other organisations would uphold human rights by improving the exercise of civil rights and enhancing access to justice. Challenging discrimination is a difficult and often costly process for an individual. The work of public authorities would also be facilitated, and the reform would have a preventative impact.
Arrangements conferring legal standing on organisations are already applied in such jurisdictions as Germany, the Netherlands, Norway, Sweden, and the USA. Nor is the idea of collective standing alien to Finnish legislation. Class action lawsuits are recognised in Finland in matters of consumer protection, and business federations enjoy independent standing when contesting unfair contract terms.
The legal system must genuinely support victims when their employers are guilty of work-related abuse. Wage guarantee claims often remain unpaid. The maximum claim is too small in practice, the deadline for applications is only three months, and processing times can be protracted. The review process is also needlessly complex.
Disputes arising from employment can take several years to settle, and employers may continue applying an incorrect interpretation over this period. Improving the position of victims requires low-threshold remedies that enable employees to have their cases settled swiftly and cheaply, and ensure optimal dispatch in addressing misinterpretations of law by the employer.
Underpayment and exploitation of employees must be prevented
Legislative changes and more effective enforcement are needed to tackle underpayment for work and other forms of exploitation.
Objectives
- The status of exploited workers and their access to justice must be improved by clarifying the criminal law provisions governing work-related offences. This will include more extensive criminalisation of underpayment and debasement of working conditions.
- The status of victims must be improved, with guarantees of legal aid and access to interpretation services.
- Employers who engage in labour exploitation must be barred from operating through such means as enhanced and expanded use of business prohibitions and corporate fines for labour-related offences.
- Official agencies such as the police and the occupational safety and health authorities should have more training, enforcement instruments and resources to ensure that the risk of being caught and sanctioned genuinely deters employers from criminally exploiting their workers.
Grounds
Business models that are based on exploiting employees and seeking to profit at their expense must be stopped. The risk of being caught is far too low and the consequences are non-existent at the moment. For example, underpayment for work is not punishable as a criminal offence in Finland, even though the Employment Contracts Act requires an employer to pay wages in accordance with the generally binding collective agreement.
The State grants legal aid to those who cannot afford to retain their own legal counsel. People who do not understand the language of the court may be entitled to legal interpretation free of charge when their cases are heard. The 2020 annual report of the Parliamentary Ombudsman indicates that both legal aid and legal interpretation services are oversubscribed.
While corporate fines may be imposed on a legal person, their scope does not include labour offences. A limited liability company may be ordered to pay a corporate fine, for example. The corporate fines that are currently imposed in cases of labour exploitation are too small. The use of business prohibitions should be encouraged in cases of serious or repeated labour exploitation.
Police and public prosecutors must have a clear legal basis for investigating and prosecuting labour exploitation offences. The occupational safety and health authorities must be empowered to apply improvement notices and other effective administrative procedures in clear cases of underpayment. These may be supplemented with conditional fines and the power to suspend work. These matters have been prepared, but the statute has yet to be enacted.
Ex ante enforcement of working conditions for foreign workers must be strengthened, with assessment of labour availability retained
Immigration policy has focused on digitising and accelerating residence permit processes. Less attention has been paid to the important principle that accelerated permit procedures should not be realised by undermining working conditions.
Objectives
- Work-related immigration must prioritise sectors with labour shortages.
- Effective ex-ante enforcement of working conditions and assessment of labour availability must be maintained when bringing workers from abroad.
- Employers convicted of labour exploitation must be banned from hiring from abroad for at least two years.
Grounds
Work-related immigration is intended to supplement and not replace the local labour supply, so it must continue to prioritise sectors with a labour shortage.
Assessment of labour availability gives the unemployed an opportunity to apply for vacancies before initiating recruitment of labour from third countries, so there is no justification for dismantling this approach. This assessment requires employers to publish a job vacancy on the website of the employment and economic development office, to maintain the vacancy for two weeks, and to then file an official report of the outcome of recruitment. The employer is free to recruit from third countries if no jobseekers are found during this period.
Occupations in which there is an identified labour shortage have already been exempted from the assessment of labour availability, which does not preclude hiring from third countries in the event of a genuine labour shortage. The assessment of labour availability will only be applied in occupational sectors with substantially more unemployed jobseekers than job vacancies. While it is important to accelerate and digitise permit processes in work-related immigration, this must not undermine ex-ante enforcement of working conditions or the rights of workers. Discontinuing the use of wage and training information may result in hiring foreign workers on the lowest wage scale, leading to a deterioration in their working conditions and a reduction in overall wage levels. Recruitment of workers from abroad must not lead to any erosion of working conditions for employees in the labour market.