New working time legislation introduces a working time bank

Changes in the Working Time Act (työaikalaki, no. 605 of 1996) take effect on 1 January 2020. Though this key of law is still primarily about protecting employees from abusive working time practices, the latest amendments seek to respond more effectively to the various working time needs of businesses by allowing more flexibility.

The working time banking system aims to harmonise work and leisure time. A working time bank allows employees to save and combine their working time, earned time off or monetary benefits converted to time off, and also enables them to accumulate longer periods of time off in the bank. Employees receive their regular pay when taking this saved leave.

Though working time bank regulations have already been included in many collective agreements for some time, this is the first time that they  have featured in Finnish working time legislation. Introducing working time banking has been virtually impossible in companies that do not belong to an employers’ federation, but the new Working Time Act now enables such agreements at all workplaces.

While it will still be possible to set up a working time banking system by collective bargaining, such systems will be governed entirely by the provisions of the resulting collective agreement. A statutory working time bank will correspondingly be governed solely by the provisions of the Working Time Act.

Agreement required

The introduction of a working time bank must be agreed in writing between the enterprise and the shop steward primarily. If no shop steward has been elected for the workplace, then the agreement may be signed by an employee representative elected under the Employment Contracts Act, some other staff representative, a staff group or the entire staff.

A working time bank may be created for the entire staff or for a specific staff group. An agreement made by an employee representative will bind the employees whom the employee representative represents. This means that no individual employee may opt out of a working time bank if the bank system was agreed with an employee representative who represents the said individual employee. Individual employees may naturally choose to refrain from saving working time in the bank, as any transfer of working time to the bank requires the employee’s consent.

THE INTRODUCTION OF A WORKING TIME BANK MUST BE AGREED IN WRITING

The minimum requirements for a working time bank agreement are specified by law. The agreement must settle the nature of deposits that may be saved in the working time bank and the limits of any such saving. The agreement must also specify the procedure for winding up the working time bank and what happens to any time saved in the bank when such winding up occurs. The principles and procedures governing the use of any banked time off must also be settled.

Depositing working time in a working time bank

The working time bank agreement will specify the deposits that may be transferred to the bank, subject to the statutory limits governing such transfers.

The following may be deposited in a working time bank:

• Additional and overtime hours
• Balance hours that have accrued under a flexitime system (up to 60 hours over a 4-month tracking period)
• Statutory or contractual monetary benefits that have been quantified in terms of time (e.g. compensation for additional time, overtime or standby time, holiday bonus and various other bonuses).

The following may not be deposited in a working time bank:

• Regular working hours 
• Reimbursements of expenses
• Monetary benefits that have fallen due for payment (e.g. reimbursement of travelling expenses and saved leave within the meaning of the Annual Holidays Act).

A working time bank functions on a time basis, so monetary benefits such as compensation for additional work and overtime, holiday bonuses and various other bonuses must be converted into working time before they are deposited in the bank. This conversion is made according to the employee’s pay at the time of making the deposit. For example, if a monetary benefit is worth EUR 120 and the employee’s hourly pay is EUR 10, then 12 hours may be deposited in the working time bank instead of paying this benefit . Deposits that have been calculated and confirmed at a certain time are thereafter governed by the general rules of the working time bank, meaning that their basis is no longer tracked.

The accrued working time saved in the bank may not exceed 180 hours during a calendar year, nor may the bank balance exceed the account holder’s regular working time for a six-month period. These limits must always be reckoned according to the employee’s actual working hours, so the maximum balance may be smaller for a part-time employee than for a full-time employee.

Taking time off

The right to take saved leave is basically governed by the terms of the working time bank agreement, which should specify the principles and procedures for taking time off, such as the maximum and minimum periods that may be withdrawn from the bank and the principles governing cancellation and postponement of leave. The agreement may also specify deadlines for notifying the intention to take time off and the procedure that applies when leave cannot be granted at the desired time.

The new legislation includes a fallback provision on taking saved leave that applies if the parties have not agreed these terms in the working time bank agreement or the parties don’t reach an understanding on the terms of taking time off. This provision entitles an employee to take at least two weeks of saved leave annually, and not less than one fifth of the working time bank balance if the total duration of saved leave exceeds 10 weeks. The leave must be granted at the employee’s request during the following six months. The employee is also entitled to monetary compensation instead of time off if the employer insists on the time when the leave must be taken.

The author is a labour lawyer at TEK.