The new Annual Holidays Act (162/2005) came into force at the beginning of April 2005. The Act shall be applied both in the private and public sectors to all work carried out in a contractual employment relationship or public-service relationship.
The Annual Holidays Act does not apply to seamen, work carried out during normal leisure time activities, persons supported by measures of the labour administration, private care-providers, persons taking care of close relatives, or educational personnel. Their annual holiday benefits have been agreed on in collective agreements.
The whole content of the new Annual Holidays Act shall be applied to annual holidays earned from 1 April 2005. The length of holidays earned before 1 April 2005 and the holiday pay are determined in accordance with the old Annual Holidays Act. However, the new Act’s provisions concerning granting of annual holidays shall be applied from 1 April 2005.
The collective agreement obliging the employer may include provisions on holiday bonus, among others.
The decisions made by the Board for Ratification of the Validity of Collective Agreements, and the texts of binding collective agreements, can be found in Finnish on this link.
Holiday credit year
A one-year period between1 April and 31 March of the following year, preceding the holiday period. The right to have holiday is calculated on the basis of the holiday credit year.
A period between 2 May and 30 September.
Full holiday credit month
A calendar month when the employee has been at work 14 days, or accumulated an equivalent period of days comparable to working days.
If, in accordance with the employee’s contract, the employee works on so few days that he/she does not accumulate 14 days at work in any month, or accumulates 14 days at work in only some of the calendar months, a full holiday credit month is considered to be a calendar month during which the employee has been at work at least 35 hours, or accumulated an equivalent period of hours comparable to hours at work.
Period equivalent to time at work
Any period of absence from work for which the employer is by law obliged to pay the employee is considered to be a period equivalent to time at work. In addition, those working days and working hours are considered to be the equivalent of days at work, when the employee has been unable to work during e.g. the following: maternity, special maternity, paternity or parental leave, temporary childcare leave, absence for compelling family reasons, or due to illness or accident, as well as medical rehabilitation or lay-off (see the list in section 7 of the Annual Holidays Act).
Right to holiday, employee’s right to be given leave, and saved leave
Right to holiday
The employee is entitled to 2,5 weekdays of holiday for each full holiday credit month. However, if the duration of the employment relationship has been an uninterrupted period of less than one year by the end of the holiday credit year, the entitlement is 2 weekdays of holiday for each full holiday credit month.
The earning of annual holiday shall continue uninterrupted if the employee transfers directly to the service of an employer that, on the basis of ownership, agreement or some other arrangement, is controlled by the previous employer or by persons who have close relationship with the previous employer.
If the employee has been working for the same employer under repeated fixed-term employment contracts, the employment relationship is considered to have continued uninterrupted.
Employee’s right to be given leave
When an employee, in accordance with his/her contract, works for less than 14 days or 35 hours during all calendar months, he/she does not accumulate any annual leave. However, such an employee is, during the employment relationship, entitled to 2 weekdays of leave for each calendar month in which the employment relationship has been in force, if he/she so desires.
The employer and the employee may agree that the part of the annual holiday that exceeds 18 days will be taken during the following holiday period, or after it, as saved leave. The employee has a right to carry over any part of his/her holiday exceeding 24 days, provided that this does not cause any serious harm to the production and service operations at the workplace.
Granting annual holiday
A summer holiday (24 weekdays) must be given to the employee during the holiday period between 2 May and 30 September.
A winter holiday (the part exceeding 24 weekdays) must be granted after the holiday period by the start of the following holiday period, i.e. between 1 October and 30 April.
An employee is granted annual holiday at a time determined by the employer, unless the employer and the employee agree on arranging the holiday.
- The employer and the employee may agree on the following:
- The employee will take the part of the holiday that exceeds 12 weekdays in one or more periods.
- The employer and the employee may agree on the timing of annual holiday in a period that starts at the beginning of the calendar year, includes the holiday period, and ends the following year before the start of the next holiday period.
- The employee will take the part of the holiday exceeding 12 weekdays within one year of the end of the holiday period.
- The employee will take the annual holidays earned up to the end of his/her employment relationship before the employment relationship ends.
- On the initiative of the employee, the employer and the employee may agree on converting the part of annual holiday exceeding 24 weekdays into shortened working hours. The agreement must be in writing.
Holiday pay and holiday compensation
When calculating holiday pay and holiday compensation, the form on this link can be used as help. (PDF file 50 kB).
The holiday pay of an employee receiving monthly pay shall be calculated by dividing the monthly pay by the number of workdays per month, and multiplying the resulting daily pay by the number of weekdays during the annual holiday.
- The holiday pay of employees receiving hourly wages or piecework pay is calculated as follows:
- The pay received by the employee, or his/her pay in arrears, for the time at work during the holiday credit year,
- excluding any sum payable for emergency work and statutory or agreed overtime work on top of basic pay,
- is divided by the number of days worked during the holiday credit year,
- to which is added one-eighth of the hours at work in excess of statutory regular working hours.
- If, in accordance with the employee’s contract, the employee’s weekly work days number less than or more than five, the average daily pay is multiplied by the number of weekly work days and divided by five.
- The average daily pay resulting from this calculation is multiplied by a factor determined according to the number of holiday days, as referred to in section 11 of the Annual Holidays Act, or by a factor determined by a holiday pay agreement.
Percentage-based holiday pay is mainly used when calculating holiday pay for part-time employees, or holiday compensation for persons earning leave. The holiday pay is usually 9 percent. If the employment relationship has lasted for at least one year by the end of the holiday credit year preceding the holiday period, the holiday pay is 11,5 per cent of the employee’s pay, or pay in arrears, for the time at work during the holiday credit year. Any sum payable for emergency work and statutory or agreed overtime work is excluded. If the employee has been absent from work for a period considered to be comparable to working, the theoretical pay for that period will be included in the pay that forms the basis for calculating the holiday pay.
Other agreements on the percentage may be made through collective agreements (e.g. construction industry 18,5 percent, commercial part-time work 10 percent or 12,5 percent).
The holiday pay must be paid before the holiday starts, unless the holiday is shorter than 6 days. For employees earning leave, the holiday compensation is paid in connection with the leave or, at the latest, when the holiday period ends.
At the end of an employment relationship, the employee is entitled to holiday compensation instead of annual holiday for any holiday entitlement or holiday compensation earned but not yet received. Holiday compensation is calculated in compliance with the holiday pay provisions, as applicable.
When paying holiday pay or holiday compensation, the employer must give the employee a statement detailing the amount of holiday pay or holiday compensation and the basis on which they are determined.
The employer must keep annual holiday records of the employee’s annual holidays and saved leave, as well as on the holiday pay and holiday compensation determined on the basis of the Annual Holidays Act. The annual holiday records must show the duration and dates of the annual holidays, the amount of holiday pay and holiday compensation, and the basis on which they are determined.
The Ministry of Labour has published a brochure on the new Annual Holidays Act. The brochure and additional information on the matter can be found in Finnish through the webservice of the Ministry of Labour: www.mol.fi Työministeriö – työsuhteet ja lait – työsuhteet – työaika ja vuosiloma.