Employment Contracts in Finland

1. Minimum Requirements

Finnish law does not include rules on the form of an employment agreement. Therefore, written and oral employment agreements are equally valid. However, a simple written employment agreement is the most typical form, and also the recommended form, as it may be difficult for the employer to prove what has been agreed if the employment agreement is made orally.

The employer must provide the employee with written information on the essential terms of employment within the first month of employment if these are not included in a written employment agreement or if the agreement is made orally.

2. Fixed-term/Open-ended Contracts

An employment contract is deemed to be valid indefinitely unless it has, for a justified reason, been made for a specific fixed term. Contracts made for a fixed term on the employer’s initiative without a justified reason shall be considered valid indefinitely. 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 for labour.

3. Trial Period

Pursuant to the Employment Contracts Act, the employer and the employee may agree on a probationary period of four months at most. If the employee is offered specific work-related training for a period longer than four months, the trial period may be up to six months. However, if the employment is made for a fixed term of less than eight months, the trial period may not exceed 50 % of the duration of the employment.

During the trial period, the employment may be terminated with immediate effect by either party without specific reasons. However, the reasons for termination may not be discriminatory or in contradiction with the purpose of the trial period.

4. Notice Period

In connection with the termination of employment, the employer shall observe the applicable notice period and pay the employee his or her salary for the notice period and compensation for accrued but untaken holidays as well as any unpaid commission or bonus. The employee has an obligation to work throughout the notice period, unless released from duties earlier by the employer. When the employment is terminated by the employer, the applicable notice period ranges from 14 days to six months depending on the duration of the employment relationship or is alternatively determined based on the provisions of the employment agreement.

For more information, please contact L&E Global.
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