Industrial Unemployment Fund’s council convened on 21 of August in Vantaa

The council of the Unemployment Fund of Finnish Industrial Workers held an annual meeting on Friday 21 of August. The huge number of temporary lay-offs due to corona epidemic, the successful measures taken by the unemployment fund in processing the applications and a comprehensive reform to the social security system were discussed. The Head of Unemployment Fund Irene Niskanen reviewed the past year in the meeting.

The council meeting of the unemployment fund was exceptionally held this year not until August, because the meeting, originally to be held in May, was postponed due to the corona epidemic.

The unfortunate occurrence of the epidemic resulted in considerable changes in whole of Finland. The effects were seen in the industrial sector as well, when number of employers were forced to temporarily lay off their employees.

The lay-offs struck hard the members of the Industrial Unemployment Fund and the number of members receiving earnings-related allowance grew rapidly during the spring and summer. In July 2019 there were about 21,000 members that had received allowance, whereas in July 2020 the numbers were up to 44,000 members.

As high as the numbers were, it was reassuring to notice in this exceptional situation that more than 60 per cent of the unemployed members were only temporarily laid off and their employment contracts were not terminated.

Quick reactions to temporary lay-offs

The Finnish state passed many temporary changes to unemployment security legislation in the spring. The central changes concerned the shortening of the employment condition from 26 weeks to 13 weeks, the removal of five days self-liability period and the freeze to the maximum number of allowance days calculator.

– The Government had created numerous laws, directions and temporary changes in order to overcome the corona epidemic as well as possible. At the beginning of this year, many positive amendments were passed that were beneficial to our members, notes Head of Unemployment Fund Irene Niskanen.

Industrial Unemployment Fund took its own measures as well in order to process the rising number of applications. Niskanen mentions among others the revisions made to application processing processes, recruiting of new employees as well as introduction of the advance payment.

In addition, the help received from the Industrial Union and the shop steward system was acknowledged by Niskanen. These are advantages that not all the unemployment funds have.

Industrial Unemployment Fund performed well as a whole

Huge number of applications were sent to the unemployment fund in April. The shop stewards helped to evaluate the number of applications and how to respond to the backlog, as they submitted information of the on-going co-operation negotiations and numbers of temporary lay-offs to the unemployment fund.

Simultaneously, the unemployment fund started hiring new benefit assessors and invested in instructions to help members go through the application procedures.

In June, when the application backlog was at its peak, advance payment was adopted. Equivalent to the amount of basic unemployment allowance, it guaranteed a part of the future earnings-related allowance to those, whose applications had not yet been processed.

Legislative changes and the measures taken by the unemployment fund together facilitated the processing of applications, so that in July allowances were being paid even within a week from the day when they had been submitted.

– When looking at the big picture, we have performed well in our tasks, because the processing time never exceeded the 30 days time limit that is stated in law and only in few occasions our processing time exceeded two weeks, Niskanen says.

Comprehensive reform to social security system is concerning

The comprehensive reform to the social security system has been brought up in the news for some time now.

– The reform has been underway for a long time, Niskanen points out. At the beginning of this year the preparations took off and it has been agreed that the package would be ready in the spring of 2027.

– It has been noted that one of the reasons for the complexity of unemployment security is that the legislation has been reshaped by always adding a reform on top of the previous reform, but never has it been reviewed as a whole.

Different variations have been taken into discussion, such as a universal social security, which would bring the earnings-related allowance in the reach of all employees regardless of their membership in an unemployment fund. Many options of how to put this into operation have been planned: a single institution, for instance, could take care of everyone’s earnings-related benefits, or membership in an unemployment would be made mandatory. This, however, troubles Niskanen.

– At the moment, we have 24 unemployment funds for wage earners and one fund for the entrepreneurs. If the universal social security would be implemented, it would be expensive. In order to secure funding, cuts to the level or length – or both – of benefits would have to be made.

The social security system should secure the living of unemployed people and their families in future as well.

– Now more than ever, it would be important that the social security system should be built in such a way that people are able to support themselves and their families during unemployment periods.

Council approved the annual accounts

Benefit Manager Kaisa Tikka introduced the newly adopted temporary changes to the unemployment legislation, which have facilitated the situation of those fully unemployed or temporarily laid-off due to corona epidemic. Additionally, Development Manager Sari Honkanen discussed about the current affairs in the unemployment fund.

At the of the meeting, the council adopted the annual accounts from 2019. The financial statement showed surplus and equalisation fund rate was 425 per cent. The unemployment fund’s finances are stable, and the good situation helps facing even worse employment situations.

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