A layoff is the temporary interruption of work and pay based on the initiative of the employer while the employment relationship remains otherwise effective. An employer can lay off their employees on financial and production-related grounds or if the employer’s opportunity to offer work has temporarily decreased. An employer can lay off employees for a fixed term or indefinitely. The layoff can be implemented either full-time or by reducing the employer’s daily or weekly working time.

Laying off a fixed-term employee

Usually, an employer cannot lay off an employee in a fixed-term employment relationship. If you have a fixed-term employment relationship, you can receive earnings-related daily allowance only if you are working as a substitute for another employee and the layoff would concern that employee if they were working. A fixed-term employee can be laid off if the layoff is based on financial and production-related grounds.

Circumstances comparable to a layoff

You can also receive earnings-related daily allowance for circumstances comparable to a layoff. Circumstances comparable to a layoff are

  • inability to work due to reasons beyond the employee’s or employer’s control (for instance a fire at the workplace, a natural disaster) 
  • an agreement made when the employment relationship started regarding the interruption of work and pay (concerns for instance some teaching assistants and teachers)
  • the suspension of a public official from their office.

If you have originally agreed to inconsistent working hours (for example 0-40 hours a week) then you are not entitled to earnings-related daily allowance on the grounds of a layoff. You may however be eligible for adjusted daily allowance based on your part-time job.

What to do if you are laid off

If you are laid off, register with the TE Office as an unemployed job seeker on the first day of your layoff at the very latest. You can activate your status as a job seeker even before your layoff begins. Once you have registered with the TE Office, keep your job seeker status active by following the TE Office’s instructions. The Unemployment Fund can set your waiting period and pay daily allowance only for the time when your job seeker status has been active.

After about two weeks of your layoff, you can apply for unemployment benefits either through the Unemployment Fund or Kela. As a member of the Unemployment Fund for Higher Educated Employees Erko, you will send your application to Erko. You can apply for earnings-related daily allowance online or you can send the Fund an earnings-related daily allowance application by mail. Fill in the application with care and attach the necessary attachments. By filling out the application as instructed you can speed up its processing time.

Fill in your application beginning with the first day of your layoff so that the Fund can set your possible waiting periodAs your layoff continues, send your follow-up applications monthly. Despite the monthly application period, please report your information in full calendar weeks on the application, if the month starts or ends in the middle of the week. Apply for daily allowance within 3 months of the layoff days the application concerns. Applications more than 3 months old are considered late and they will be rejected. 

Inform the Fund of any changes that happen during your unemployment and that could affect your right to daily allowance such as work, earned income, entrepreneurship, studies, sick leave, or social benefits granted to your family. If necessary, also inform the TE Office of relevant changes such as work, entrepreneurship, studies, or sick leave.

Registering with the TE Office when laid off

For laid-off people to get unemployment benefits they must register as an unemployed job seeker with the TE Office. Registration is primarily done by logging in to the TE Office’s online service using your online banking codes or an identity card with a chip. If you do not have online banking codes or an identity card with a chip you can activate your job seeker status by personally contacting the TE Office.