The Finnish Customer Liability Act, also known as the 'Tilaajavastuulaki', is a legislative framework designed to promote fair competition and responsible conduct among businesses operating in Finland. It sets forth the obligations of clients (customers) when outsourcing services to contractors, particularly in the construction industry, but also applicable to other sectors.

For Estonian companies looking to expand into the Finnish market, understanding and adhering to the Customer Liability Act is crucial. It ensures that they maintain a reputable standing and avoid legal pitfalls that could arise from non-compliance.

Key Provisions of the Customer Liability Act

The Act applies to contracts where services are outsourced and where the contract value exceeds a certain threshold. It covers various sectors and outlines the due diligence that must be performed by clients before entering into agreements with contractors.

Contractors are required to comply with Finnish labor laws, including wages, working hours, and occupational safety. They must also ensure that their employees have the right to work in Finland and are registered with the appropriate social security institutions.

Clients must verify that contractors fulfill their legal obligations. This includes checking contractors' business registrations, tax payments, and social security contributions. Clients are also responsible for ensuring that subcontractors adhere to the same standards.

Compliance with the Customer Liability Act

Both clients and contractors must maintain accurate records and provide specific documents upon request. These documents include certificates of paid taxes, pension insurance, and compliance with collective agreements.

Failure to comply with the Customer Liability Act can result in significant fines and reputational damage. It is therefore imperative for businesses to understand their obligations and implement compliance measures.

Navigating the Act for Estonian Businesses

Adapting to the Finnish business culture and legal environment is a key step for Estonian companies. This includes recognizing the importance of transparency, punctuality, and equality in business practices.

Developing a compliance strategy is essential. This may involve internal audits, employee training, and establishing a compliance officer role within the company.

Given the complexities of the Act, seeking professional legal and consulting services can be invaluable. This ensures that all aspects of the law are understood and adhered to, preventing any inadvertent breaches.