Hire in Finland

No statutory limit exists on the duration of a fixed-term employment contract. However, a contract may only be established for a fixed term based on a justified reason. The justified reason must also form the basis for renewing or prolonging the contract for a fixed term. Contracts made for a fixed term on the employer’s initiative without a justified reason, or consecutive fixed-term contracts concluded without a justified reason, are considered valid as an indefinite contract.

The probationary period outlined in a fixed-term employment contract must not be exceed either of the following:

• Six months
• Half the length of the employment relationship

A fixed-term employment contract generally cannot be terminated, but expires either:

• Automatically at the end of the fixed period
• On completion of the agreed work

Generally, under the Working Hours Act, normal working hours must not exceed eight hours a day or 40 hours a week in total. Collective bargaining agreements typically outline working time provisions, which may also deviate from the provisions of the Working Hours Act.

The Working Hours Act also instructs statutory rest periods. The general principles are as follows:

• The employee must be offered at least a one-hour break per day if his or her daily working time exceeds six hours.
• The employer and employee may agree to a shorter rest period of no less than 30 minutes.
• If daily working time exceeds 10 hours, the employee is entitled to an additional rest period of up to 30 minutes following the completion of eight hours of work.
• The employee must be given a daily rest period of 11 consecutive hours.
• The employee must be allowed at least 35 hours of uninterrupted rest per week, preferably including Sunday.

The Working Hours Act does not generally apply to management or employees working at home.

The maximum amount of overtime worked measured over a four-month reference period is 138 hours. The aggregate overtime work may not exceed 250 hours in a calendar year. An employer can agree to additional overtime with employee representatives, employees or an employee group.

As a general rule, the payment for daily overtime work in addition to normal pay is 50% for the first two hours and 100% for the following hours. For weekly overtime work, the surcharge pay is 50%. If agreed by both parties, overtime may be partly or completely converted into corresponding time off.

An employment contract is usually terminated by either the employer or the employee giving notice to terminate. The employee does not need to give any particular grounds for termination, but he or she is required to observe the period of notice. The employer, on the other hand, may not terminate an employment relationship without proper and weighty reason, either related to the employee or related to the business. The employer must provide notice of termination to employees before dismissal, regardless of the grounds for the termination. The notice should be drafted in writing and given to the employee personally.

Reasons an employer may terminate an employment contract:

Reasons related to the individual employee: The employer may terminate the employee’s employment if the employee seriously breaches or neglects the employee’s obligation to the employer or the employee is no longer able to cope with their work duties. In most circumstances, the employee should be given prior notice as well as an opportunity to modify their behavior.

Business-related reasons: The employer may terminate the employee’s employment if the work has diminished significantly and permanently for financial or production reasons. Consideration should however be given to retraining or placement in other roles where possible.

If a party to the employment relationship commits a fundamental breach of the employment contract, the other party is entitled to terminate the employment with immediate effect (i.e., without observing the notice period).

Finnish employees enjoy strong protections against dismissal. In addition, certain groups of employees enjoy particular protection against dismissals. Such employees include shop stewards, industrial safety delegates, pregnant employees and employees on family leave. If an employee is dismissed without legal grounds, he or she is entitled to compensation for unfair dismissal corresponding to three to 24 months’ salary

The following periods of notice apply to an employer:

Periods of notice that apply to an employee

Non-compete clauses:

A non-compete agreement can be arranged only for a particularly weighty reason related to the employer’s business and operations. A non-compete agreement established without such reason is considered invalid. Generally, a non-compete agreement may restrict the employee’s right to engage in competing activities for a maximum of six months after expiry of the employment. However, if the employee receives reasonable compensation, the restricted period may be extended to a maximum of one year. An employee is released from non-compete obligations if the employment relationship is terminated on grounds originating from the employer. This includes redundancy.

Non-solicitation clauses:

There are no legal provisions governing the non-solicitation of customers and employees. Depending on the circumstances, such provisions may be deemed comparable to a non-compete undertaking. In such cases, the statutory limitations regarding the use of non-compete undertakings apply.

The employer must provide the employee with a payslip in connection with each wage payment, either electronically or in paper form.

Common practice standard stipulates that a payslip should include:

• the employee’s name, occupation and date of birth
• the employer’s name and location of the unit
• start date of the employment relationship and, if relevant, the end date
• cumulative pay subject to withholding tax for the previous calendar year, the current calendar year and the most recent pay period
• the pay period
• taxes withheld for the most recent pay period
• increments paid for shift work and period-based work for the most recent pay period
• holiday pay and annual holiday compensation paid in connection with wage payment

The provisions concerning annual holiday can be found in the Annual Holiday Act. Collective agreements may contain further provisions on the determination of annual holiday and the wages or compensation payable for its duration.

The accrual of holiday days is calculated on the basis of the holiday credit year, which is from 1 April to 31 March. For an employment relationship that has lasted less than a year on 31 March, the employee is entitled to two weekdays of holiday for each full holiday credit month. For an employment relationship that has continued uninterrupted for a year on 31 March, the employee is entitled to two and a half days of holiday for each full holiday credit month. For example, if an employment relationship has started on 1 April or the first working day in April, the employee will accrue two and a half days of holiday for each full holiday credit month already during his or her first employment year.

The summer holiday season is considered as being from 2 May to 30 September. Employees will usually take summer holiday of at least two consecutive weeks during this time period.

Employees in Finland are entitled to an annual vacation bonus payable in May. It is the equivalent of two weeks of base salary.