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Finland
 


Source and scope of regulations - 2019    

References
  • Employment Contract Act, No. 55 of 2001 [ECA].
    Note: Amendments up to 204/2017 in force since May 1st. 2017 have been reviewed by the researchers.
    Date: 01 May 2017; view website » (view in NATLEX »)
  • Act on Cooperation within Undertakings, No 334 of 2007 [ACU], last amended by Act 208/2017 of 4 July 2017 in force since May 1st. 2017.
    Note: the amendments since 2014 are not included in the English version
    Date: 01 May 2017; view website » (view in NATLEX »)
Scope
Size of enterprises excluded (≤): 20
Remarks:
  • The ACU (that establishes cooperation procedures in particular with regards to economic dismissals) only applies to enterprises employing 20 or more workers. However, the ECA is applicable no matter the size of the enterprise.

Workers' categories excluded: civil/public servants; seafarers
Remarks:
  • Sec. 2, chap. 1 ECA: the ECA is not applicable to employment relations subject to public law, ordinary hobbies activities, contracts of work governed by separate provisions.
    Seamen's Act (423/1978, as amended).

Types of employment contracts - 2019    

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Maximum probationary (trial) period: 6 month(s)

Remarks:
  • Sec. 4, chap. 1 ECA.
    The probation period can be prolonged retroactively if the employee has been unable to work for at least 30 days during the probation period. In case of a fixed-term contract, the probation period can not be longer than half the duration of the contract. Collective bargaining agreements can stipulate shorter probation periods. The employer must notify the employee of such if they exist.

Fixed term contract (FTC):
  • FTC regulated: Yes
  • Valid reasons for FTC use: objective and material reasons
    Remarks:
    • Sec. 3, chap. 1 ECA: "justified reason".
      Sec 3a, chap 1 ECA: A fixed term contract with a worker who has been unemployed for at least 1 year is possible without a “justified reason” for a maximum duration of 1 year, with the possibility to renew the contract for 1 additional year.
  • Maximum number of successive FTCs: no limitation
    Remarks:
    • Although there are no statutory limitations on the number of successive contracts, the ECA states that "consecutive fixed-term contracts concluded without any justified reason shall be considered valid indefinitely" (sec. 3(2), chap. 1 ECA).
      New since 1 January 2011:
      Source of information: European labour Law Network, FINLAND - Amendment on consecutive fixed term contracts, 01-01-2011 (link provided under "Scope of additional information").
      Sec 3, chap.1 ECA has been amended by Act No 1224/2010 which came into force on 01/01/2011. A new paragraph (3) regarding successive FTcs has been added to sec. 3, which reads as follows:
      "It is prohibited to use consecutive fixed-term contracts when the amount or total duration of fixed-term contracts or the totality of such contracts indicates a permanent need of labour." (sec. 3(3), chap. 1, ECA)
      "The report of the Employment and Equality Committee of the Parliament indicates that the amendment was a reaction to a judgement of the Finnish Supreme Court (Korkein oikeus 2010:11; votes 3-2). Repeated consecutive employment contracts concluded for one year and prolonged per agreement were considered to have a justified reason. The main argument was that a municipality V outsourced kindergarten services to the employer on a contractual annual basis. The employer only provided services to V and the employer's activity was considered to be fully dependent on the decisions made by V. The minority argued that the economic risk was unduly transferred to the employee."
  • Maximum cumulative duration of successive FTCs: no limitation
    Remarks:
    • No statutory limitation on the maximum cumulative duration of successive FTCS. However the ECA states that "consecutive fixed-term contracts concluded without any justified reason shall be considered valid indefinitely" (sec. 3(2), chap. 1, ECA).
      New since 1 January 2011:
      Source of information: European labour Law Network, FINLAND - Amendment on consecutive fixed term contracts, 01-01-2011 (link provided under "Scope of additional information").
      Sec 3, chap.1 ECA has been amended by Act No 1224/2010 which came into force on 01/01/2011. A new paragraph (3) regarding successive FTcs has been added to sec. 3, which reads as follows:
      "It is prohibited to use consecutive fixed-term contracts when the amount or total duration of fixed-term contracts or the totality of such contracts indicates a permanent need of labour." (sec. 3(3), chap. 1, ECA)
      "The report of the Employment and Equality Committee of the Parliament indicates that the amendment was a reaction to a judgement of the Finnish Supreme Court (Korkein oikeus 2010:11; votes 3-2). Repeated consecutive employment contracts concluded for one year and prolonged per agreement were considered to have a justified reason. The main argument was that a municipality V outsourced kindergarten services to the employer on a contractual annual basis. The employer only provided services to V and the employer's activity was considered to be fully dependent on the decisions made by V. The minority argued that the economic risk was unduly transferred to the employee."
  • % of workforce under FTC: 15.6 %
    Remarks:
    • Source: Eurostat, as of third trimester 2016.
      The figure refers to the percentage of employee with a contract of limited duration (= temporary job) of total number of employee aged 15-74 years.
      Eurostat data are based on the following definition:
      "A job may be considered temporary if employer and employee agree that its end is determined by objective conditions such as a specific date, the completion of a task or the return of another employee who has been temporarily replaced (usually stated in a work contract of limited duration). Typical cases are: (a) persons with seasonal employment; (b) persons engaged by an agency or employment exchange and hired to a third party to perform a specific task (unless there is a written work contract of unlimited duration); (c) persons with specific training contracts."

Substantive requirements for dismissals (justified and prohibited grounds) - 2019    

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Obligation to provide reasons to the employee: Yes
Remarks:
  • Sec. 2 & 3, chap. 9, ECA.


Valid grounds (justified dismissal): any fair reasons
Remarks:
  • See: sec.1-3, chap. 7, ECA.
    As a general condition, termination of employment cannot take place without a "proper and weighty reason". Two types of reasons are listed in the ECA: these are reasons connected with the employee's person (conduct, and capacity) and economic reasons.


Prohibited grounds: pregnancy; maternity leave; filing a complaint against the employer; temporary work injury or illness; race; sex; sexual orientation; religion; political opinion; nationality/national origin; age; trade union membership and activities; disabilities; language; family members at the same workplace; parental leave; participation in a lawful strike; state of health; ethnic origin
Remarks:
  • See:
    * Sec. 2, chap. 2, ECA and sec. 8 of the Non-discrimination Act (1325/2014):Prohibition of discrimination.
    * Sec. 2, chap. 7, ECA: Termination grounds related to the employee's person provides a list of invalid grounds.
    * Sec. 9, chap. 7, ECA : Termination in the case of an employee who is pregnant or on family leave.
    Sec. 4, chap. 1 ECA: Discriminatory termination during the probation period.


Workers enjoying special protection: workers' representatives; pregnant women and/or women on maternity leave; workers with family responsibilities
Remarks:
  • * Workers' representatives:
    Sec. 10, chap. 7, ECA: Dismissal of a "shop steward or elected representatives" based on individual grounds requires the consent of the majority of the employees whom he represents.
    Economic dismissal of those representatives are authorized provided the job they occupy ceases completely and the employer has been unable to find another suitable job or to train the person for some other work.

    * Pregnant women and employees on family leave: sec. 9, chap. 7, ECA deems the dismissal to be based on employee's pregnancy or family leave and places the onus on the employer to prove that the dismissal is based on another reason.
    In addition, sec. 9, chap. 7 ECA states that the employer can terminate the employment relationship with employee on maternity, special maternity, parental or child care on economic grounds only in case of complete cessation of activities.


Procedural requirements for individual dismissals - 2019    

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Notification to the worker to be dismissed: no specific form required

Remarks:
  • Sec. 4, chap. 9, ECA: A notice on termination of an employment contract shall be delivered to the employer or its representative, or to the employee, in person. If this is not possible, the notice may be delivered by letter or electronically.
    However, if so requested by the employee, the employer must notify the employee without delay in writing of the date of termination of the employment contract and of the grounds for termination or cancellation known by the employer to have caused the termination (sec. 5, chap.9 ECA).

Notice period:
Remarks:
  • Section 3, Chapter 6, ECA, General notice periods
    “Unless otherwise agreed, the notice periods to be observed by the employer are the following if the employment relationship has continued uninterruptedly:
    1) 14 days, if the employment relationship has continued for up to one year;
    2) one month, if the employment relationship has continued for more than one year but no more than four years;
    3) two months, if the employment relationship has continued for more than four years but no more than eight years;
    4) four months, if the employment relationship has continued for more than eight years but no more than 12 years;
    5) six months, if the employment relationship has continued for more than 12 years.
    • tenure ≥ 1 year
      • 14 day(s).
    • tenure ≥ 4 years
      • 1 month(s).
    • tenure ≥ 5 years
      • 2 month(s).
    • tenure ≥ 10 years
      • 4 month(s).
    • tenure ≥ 20 years
      • 6 month(s).

    Pay in lieu of notice: Yes

    Remarks:
    • Sec. 4, chap. 6, ECA.

    Notification to the public administration: No

    Remarks:
    • Section 3a has been repealed by Act 204/2017.

      See also sec. 48 of the ACU, applicable only to undertakings employing at least 20 workers: When the employer proposes measures that may lead to termination (on economic grounds), he or she should also inform the employment office.

    Notification to workers' representatives: No

    Remarks:
    • However, according to the Act on Co-operation within Undertakings (2007), notification to worker's representatives and negotiation are compulsory when the dismissal affects a single worker provided such dismissal is based on financial and productive grounds, and the undertakings employs at least 20 workers. (see sec. 44-53 ACU)

    Approval by public administration or judicial bodies: No

    Approval by workers' representatives: No

    Procedural requirements for collective dismissals for economic reasons (redundancy, retrenchment) - 2019    

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    Definition of collective dismissal (number of employees concerned):
    The ACU provides for a specific cooperation procedure applicable to dismissals on financial or productive grounds of one or several employees.
    However, procedural requirements regarding information provided by the employer to the worker's representatives only apply to dismissal of over 10 workers over a period of 90 days.

    Remarks:
    • Sec. 44 ACU: scope of application of the cooperation procedures.
      On the information requirements: see art. 47 ACU and sec. 3b, chap. 9 ECA.
      Sec. 13(12), chap. 13 ECA, the application of the procedural requirements for terminations listed in Chapter 9 of the ECA can be derogated by collective agreement

    Prior consultations with trade unions (workers' representatives): Yes

    Remarks:
    • Sec. 45-51 ACU.
      Note that section 47 differentiates information requirements based on the number of employees concerned by the dismissal (under or above 10 employees).
      When the dismissal concerns less than 10 employees over a period of 90 days, information shall be directly given to the employees or their representatives if the employees so request.

    Notification to the public administration: Yes

    Remarks:
    • Sec. 48 ACU: applicable to the economic dismissal of one or more employees.
      Section 3a has been repealed by Act 204/2017.

    Notification to workers' representatives: Yes

    Remarks:
    • Sec. 45-51 ACU on negotiation.
      Sec. 53 ACU on communication of the employer's report regarding the decisions adopted on the basis of the negotiation.

    Approval by public administration or judicial bodies: No

    Approval by workers' representatives: No

    Priority rules for collective dismissals (social considerations, age, job tenure): No

    Employer's obligation to consider alternatives to dismissal (transfers, retraining...): Yes

    Remarks:
    • Sec. 49-50 ACU.

    Priority rules for re-employment: Yes

    Remarks:
    • Sec. 6, chapt. 6, ECA: “If an employee is given notice on the basis of chapter 7, sections 3 or 7, and the employer needs new employees within four months of termination of the employment relationship for the same or similar work that the employee given notice had been doing, the employer shall offer work to this former employee if the employee continues to seek work via an Employment and Economic
      Development Office. However, if the employment relationship has lasted without interruption for at least 12 years prior to its termination, the re-employment period shall be six months."

    Severance pay and redundancy payment - 2019    

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    Severance pay:
    Remarks:
    • No statutory severance pay.

      Employers employing at least 30 workers must provide free vocational coaching or training courses to workers, which they have terminated based on economic reasons and which have worked for them for at least 5 years, sec. 13, chap. 7 ECA. This entitlement can be waived by collective agreement, sec 7(11), chap. 13 ECA.

      Notes / Remarks
      No statutory severance pay or redundancy payment.

      Avenues for redress (penalties, remedies) and litigation procedure for individual complaints - 2019    

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      Compensation for unfair dismissal - free determination by court: No

      Remarks:
      • See: sec. 2, chap. 12 ECA.

      Compensation for unfair dismissal - Legal limits (ceiling in months or calculation method):
      * Groundless termination of employment: min. 3 months' pay and max. 24 months' pay.

      * Failure to observe the procedural requirements applicable to economic dismissal: max. 30 000 EUR.

      Remarks:
      • * Compensation for groundless termination of employment: sec. 2, chap. 12 ECA.
        The minimum amount of 3 months is not applicable to dismissals based on financial and production-related grounds or a reorganization procedure.
        For shop stewards and elected representatives, the maximum amount is 30 months' pay.

        In cases of discriminatory terminations, the compensation which would have been received for the same infraction under the Non-Discrimination Act (1325/2014) must be taken into account, when determining the compensation received. (According to sec. 24 of the Non-Discrimination Act, the compensation must be equitably proportionate to the severity of the act, taking into account the type, extent and duration of the infringement but also attempts of the offender to preclude or remove the consequences of the actions).

        In case the former employee has received unemployment allowances before being granted the compensation payment, up to 75% of these allowances payment can be deducted from the final sum, sec. 3, chap. 12 ECA.


        * Failure to observe the procedural requirements applicable to economic dismissal: sec. 62 ACU.

      Reinstatement available: No

      Preliminary mandatory conciliation: No

      Remarks:
      • No statutory provision found.

      Competent court(s) / tribunal(s): ordinary courts

      Remarks:
      • In Finland, individual labour disputes over rights are heard by ordinary courts as apposed to disputes connected with collective agreements which are dealt with by labour courts. (See Act on the Labour Court 646/19974)

      Existing arbitration: No

      Remarks:
      • No statutory provision found.

      Source of additional information - 2019    

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      Links

      ILO Committee of Experts on the Application of Conventions and Recommendations - Comments on the ILO Termination of Employment Convention, 1982, No. 158 »