Finland

A. Hiring of employees (onboarding)

1. Mandatory employer requirements

The employer must present an employee  with written information on the principal terms of work, unless the terms are laid down in a written employment contract. The information must include at least:

1. The domicile or business location of the employer and the employee;
2. The date of commencement of the work;
3. The date or estimated date of termination of a fixed-term contract and the justification for specifying a fixed term;
4. The probation period;
5. The place where the work is to be performed or, if the employee has no primary fixed workplace, an explanation of the principles according to which the employee will work in various work locations;
6. The employee's principal duties;
7. The grounds for the determination of pay and other remuneration, and the pay period;
8. The working hours to be observed;
9. In the case of a worker with variable working hours:
   • in what situations and to what extent the need for labor arises for the employer;
   • the days of the week and the times during which the employer may, in accordance the Working Hours Act, commission work without the employee's consent for each occasion;
10. In case of agency work (hired worker):
    • where known, the name and place of business of the user undertaking;
    • information on the reason and duration or estimated duration of the subscription based on the customer contract of the user company underlying the fixed-term employment contract;
    • an assessment of the other work tasks available in the company of the employer of the fixed-term temporary agency worker that correspond to the tasks agreed in the temporary agency worker's employment contract
11. Any legal, contractual or practical right to training provided by the employer;
12. The manner of determining the annual holiday;
13. The notice period or the grounds for determining it;
14. The collective bargaining agreement applicable to the work;
15. The insurance institution in which the employer has arranged the employee's pension coverage or insured the employee against accidents at work and occupational diseases; and
16. In the case of work performed abroad for a minimum period of one month,
    • the country or countries in which the work is to be performed, the duration of the work, the currency in which the remuneration is to be paid, the fringe benefits, both in cash and in kind applicable abroad, and the terms for the repatriation of the employee.
    • the remuneration to which the worker posted to another EU country is entitled in the host Member State, where necessary, all allowances related to the posting and the arrangements for reimbursement of travel, accommodation and meal expenses, as well as a link to the host Member State's national website where the worker can obtain information on the working conditions in the host country;

The information referred to in points 1 to 8 of the list above shall be provided no later than seven days after the commencement of work. The information referred to in paragraphs 9 to 15 shall be provided no later than one month after the commencement of work. The information referred to in point 16 shall be provided before the employee leaves abroad. 

The employer is also required to notify the employee of any changes in the principal terms of work as soon as possible and in any case, no later than upon the change coming into force, unless the change is due to changes in law or the applicable collective bargaining agreement.

When hiring employees in Finland, employers also have various registration (e.g., tax and employer registration) and insurance-related obligations (e.g., obligation to take out mandatory pension and accident insurance) as well as health and safety  related obligations (e.g., duty to organize occupational health care). 

It is not required to establish a legal entity in Finland to hire someone.

2. Probation periods

The employer and the employee may, in an employment contract that is valid until further notice, agree on a probation period of a maximum of six months starting from the beginning of the work. If the employee has been absent during the probation period due to incapacity for work or family leave, the employer is entitled to extend the probation period by one  month for every 30 calendar days included in the periods of incapacity for work or family leave. In a fixed-term employment relationship, the probation period and any extensions to it, may comprise no more than half of the duration of the employment contract, and in any event may not exceed six months.

During the probation period, the employment contract may be terminated with immediate effect by either party. The employment contract may not, however, be terminated on discriminatory or otherwise inappropriate grounds with regard to the purpose of the probation period.

3. Hiring checks

Medical examination
An employee may not refuse to attend a medical examination without good cause, if at the start or at a later stage of the employment the examination is necessary for:

• Investigating the employee’s health in performing work or being in a working environment that presents a special risk of illness; or
• Investigating the employee’s working capacity or functional capacity for the purposes of the health requirements associated with the job.

The medical examination is performed by mutual agreement with the employee.

Criminal background check
Criminal background checks are permissible for specific functions and as specifically determined by law. Obtaining a criminal record extract mainly requires active initiation from an individual. Based on specific legal rules, the Finnish Security and Intelligence Service carries out security clearances (a wider check than criminal background check) for companies and authorities. A security clearance is only made with the written consent of the person subject to the clearance.

Reference and education checks
Reference and education checks are permissible with consent from the individual and provided that such information is necessary for the employment relationship.

4. Diversity & inclusion

According to Finnish law, an employer must treat all employees equally, unless deviating from this is justified in view of the duties and position of the employees. There are also provisions on equality and on the prohibition of discrimination (on several grounds, such as gender).

5. Types of employment contracts

The two main categories of employment relationships in Finland are:

• Open-ended employment relationships (permanent employment relationships); and
• Fixed-term employment relationships.
  

An employment contract is open-ended (permanent employment relationship) unless it has, for a justified reason, been made for a specific fixed term (fixed-term employment relationship). An example of a valid legal reason for a fixed-term employment relationship is the temporary nature of the work concerned. However, employment contracts made for a fixed term on the employer's initiative without a justified reason are considered open-ended. It is also prohibited to use consecutive fixed-term contracts when the number or total duration of the fixed-term contracts, or the totality of such contracts, indicate a permanent need of labor. 

An employment contract (both open-ended and fixed-term contracts) may be oral, written or electronic. However, in case no written employment contract is available, certain information on the principal terms of work still has to be provided in writing (please see section A 1. above).

6. Specific rules for executives

There is mainly one official category of executives under Finnish law whose rights deviate from the labor law rules applied to employees—managing directors (toimitusjohtaja). Managing directors are not regarded as employees in Finland and are thus not protected by the provisions of the Employment Contracts Act or other employment regulations, unless otherwise agreed. Therefore, it is common to draft a specific agreement to confirm the terms and conditions applicable to the position of the managing director. There are also some special provisions concerning executives relating to e.g. post-employment non-competition obligations and the applicability of the Working Hours Act.

7. Language requirements

There are no mandatory provisions on the language in which HR-related documents (such as employment contracts) must be drawn up in Finland. Finnish employment-related documents are normally drafted in an official language—Finnish or Swedish. However, other languages are also valid, but when determining which language to use, the decisive factor should be that the employee understands the content of the document(s) concerned. Accordingly, employment-related documents in dual languages are becoming more common.

8. Equal pay

Except for the general Act on Equality between Women and Men, Finland has no specific equal pay measures enacted at the moment. 

As a member of the European Union, Finland is, however, obliged to implement the EU Pay Transparency Directive by June 2026. In Finland, a working group preparing for the implementation of the Directive was established in May 2024 and its term runs until the end of March 2025.

9. Remote work

There is no separate legislation on remote working, and for this reason, remote working is subject to employment legislation that is otherwise applicable to the employment relationship. 

The employer may determine where remote work can be done. Remote work can be done either at the initiative of the employer or the employee, but neither party is obliged to agree to remote work (unless the employer´s decision is based on legal termination grounds, i.e. if the only alternative to remote work would be termination (e.g. in case the employer decides to give up his work premises all together). As a rule, remote working does not change the rights and obligations of the employer and the employee related to the employment relationship, and thus, for example, the right to direct the work remains with the employer as in local work. The introduction and initiation of remote work does not necessarily require a separate agreement with an individual employee or the entire staff.

The employer can also enable remote work with one-sided instructions, and in most cases this is the most appropriate way to enable remote work. The employer is not obliged to purchase separate work equipment and furniture for remote working, at least in situations where the place of work specified in the employee's employment contract is the so-called work place (i.e. employer’s premises). It is sufficient that the employer provides the necessary tools and furniture, such as a desk and chair, for the place of work. There is no obligation to acquire these separately for the remote work place. 

The instructions/policy on remote working should always be reviewed together with the personnel, and if the company regularly employs at least 20 employees, it is a recommended the practices and policies concerning  remote working are addressed in change consultation procedure.

B. Termination of employees (offboarding)

1. Kinds of dismissal

An open-ended employment contract can be terminated by the employer either on the basis of:

• Financial and production-related or re-organisational reasons (collective dismissal–further described under section B 9. below); or
• Reasons relating to the individual.
  

The employer may not terminate an open-ended employment contract without proper and weighty reason. Dismissal for reasons related to the individual requires a serious breach or neglect of obligations arising from the employment contract or law having material impact on the employment relationship. In addition, material changes in the employee’s capabilities necessary for working, resulting in the employee no longer being able to fulfil the work duties, can be considered a proper and weighty reason for dismissal. However, the number of employees employed by the employer as well as the employer's and the employee's overall circumstances must be taken into account when assessing the validity of the reason.

Dismissal for reasons related to the individual can take place either with a notice period (i.e., so-called ordinary dismissal) or with an immediate effect (i.e., so-called dismissal for serious cause−työsopimuksen purkaminen). A serious cause is such a grave breach related to the employment relationship that it would be regarded unreasonable to require the employer to continue the contractual relationship.

A fixed-term employment contract ends automatically when the agreed term expires, without notice period. An employment contract for a definite period cannot be terminated during its term, unless the parties have specifically agreed so, or if  there is an serious cause, as referred to above. If the employer and employee continue to execute the employment relationship beyond its expiry date, the rules relating to an open-ended relationship will apply. Furthermore, a fixed-term employment contract for longer than five years may, after five years, be terminated on the same grounds and using the same procedure as an open-ended employment contract.

2. Dismissal motivation

The termination of an employment contract always requires objective and justified (legal) reasons. Termination is subject to notice period.

As stated above, dismissal for reasons relating to the individual requires serious breach or negligence of obligations arising from the employment contract or law, having an essential impact on the employment relationship. In addition, material changes in the employee’s capabilities necessary for working may constitute a valid reason for dismissal. Employees who have neglected their duties arising from the employment relationship, or committed a breach thereof,  must be warned and given a chance to amend their conduct before notice can be given. As an alternative to the dismissal, the employer must also consider e.g., whether the employee could be transferred to other duties.

The employer must effect termination of the employment contract within a reasonable period after being informed of the existence of the dismissal grounds related to the employee. In addition, before the employer terminates an employment contract on reasons related to the individual, or terminates it with an immediate effect, the employer must provide the employee with an opportunity to be heard concerning the grounds for termination. While being heard, the employee is entitled to be assisted (e.g., by a shop steward/employee representative).

Dismissal with an immediate effect is applicable only with serious cause (i.e., when a breach or negligence is made in such a manner that it is unreasonable to expect the employer to continue the contractual relationship, even for the period of notice). It should be noted that the right to revert to dismissal with an immediate effect lapses if the employment contract is not terminated within 14 days from when the contracting party is informed of the existence of the immediate dismissal grounds.

Dismissal for economic and production-related reasons requires that the work to be offered has diminished substantially and permanently for financial or production-related reasons, or for reasons arising from reorganization of the employer’s operations (Please see section B 9. for further information). Termination for financial and production-related reasons requires a notice period.

3. Notice period

The employer must inform the employee of the termination of the employment contract without delay by giving notice.

The applicable notice periods of employment contracts/relationships are generally determined by law. If a collective bargaining agreement is in place with the employer, the notice periods of the collective bargaining agreement apply. The notice period can also be negotiated between the employer and the employee. However, the maximum length of the notice period is six months and the notice period of an employee may not be longer than the notice period of the employer.

Unless otherwise agreed, the notice periods to be observed by the employer are the following if the employment relationship was continuous:

Unless otherwise agreed, the notice periods to be observed by the employee are the following if the employment relationship has continuously lasted for:

The employment continues throughout the notice period. Thus, the employee is entitled to the salary and other employment benefits during the course of employment until the end of the notice period.  Finnish law does not recognize the concept of indemnity in lieu of notice, as an indemnity in lieu of notice is only possible with a separate and specific consent of an employee. Unless  such consent exists, the employer pays the salary during the notice period on monthly basis.

4. Severance pay

There is no mandatory severance pay (eroraha) in Finland to be paid in addition to the notice period salary (and compensation for accrued but unused holidays).

5. Dismissal formalities

Before dismissing an employee, the employer must provide the employee with an opportunity to be heard concerning the reasons for dismissal (please also see section B 2. above). 

The notice of termination should be delivered to the employee in person. If this is not possible, the notice may be delivered by letter or electronically. The notice in such situations is deemed to have been received by the recipient at the latest on the seventh day after the notice was sent. 

The form of the notice is not stipulated by law, but for reasons of proof, a written form is highly recommended. In addition, termination reasons as well as termination date must be notified to the employee in writing at the employee’s request without delay.

6. Special dismissal protection

Some categories of employees enjoy special statutory protection against dismissal if they are dismissed for reasons linked to their protected status. This concerns for example:

• Pregnant employees and employees on family leave—the employer may not terminate an employment contract on the basis of the employee’s pregnancy or because the employee is exercising his or her right to family leave.
  
• Shop stewards (“luottamusmies”) and comparable elected employee representatives
  • The employer is entitled to terminate the employment contract of a shop steward (employee representative elected on the basis of a collective bargaining agreement) or of an elected representative on grounds related to the employee only if the majority of the employees represented by the shop steward or the elected representative so agree. The employer is entitled to terminate the employment contract of a shop steward or an elected representative also if the employer is declared bankrupt. Furthermore, termination for financial or production related reasons is also possible, provided that the work of the shop steward or the elected representative ceases completely and the employer is unable to arrange work that corresponds to the person’s professional skills, or is otherwise suitable, and that the person cannot be trained to perform some other tasks.

7. Legal means of employees

If the employer intentionally, or through negligence, commits a breach of obligations arising from the employment relationship or law, the employer is liable for the loss it caused the employee.

If the employer has terminated an employment contract contrary to the reasons laid down by law, the employer may be ordered to pay compensation for unjustified termination of the employment contract. The exclusive compensation must be equivalent to the pay due for a minimum of three months and a maximum of 24 months (a maximum of 30 months for shop stewards and elected representatives). In case of termination for financial or production related reasons and dismissal for an extremely weighty cause, the abovementioned provision on minimum compensation shall not apply.

Furthermore, an employer who has deliberately or negligently failed to observe the co-operation provisions (provided the Co-operation Act applies) in connection with termination on financial and production-related reasons, is liable to pay each employee affected an indemnification amount of up to EUR 35,000.

8. Specific rules for executives

There is mainly one official category of executives–managing directors−under Finnish law whose rights deviate from the labor law rules applied to employees.

Managing directors can be terminated at any time without any specific reason and  there is no mandatory notice period to be applied by the parties. Therefore, it is common to agree on termination provisions in detail between the parties in the managing director agreement. A fairly common “termination protection package” of a managing director consists of a notice period between one and six months (for both parties) and a separate severance payment amounting to three to 24 months’ salary (payable in case the termination is not caused by any failure or breach of the managing director).

9. Collective dismissals

As stated above in section B 2., the employer may terminate the employment contract if the work to be offered has reduced substantially and permanently for financial or production-related reasons or for reasons arising from reorganization of the employer's operations. The reduction is usually considered temporary unless it clearly exceeds a period of 90 days. In addition, it is required that the employees affected cannot, within reason, be placed in or trained for alternative or other duties. No legal termination grounds are deemed to exist if the employer has, either before or after the termination (approximately one year), hired a new employee to similar duties without changes in its operating conditions, or if no actual reduction of work has occurred due to the reorganisation.

The obligation to offer alternative work (equaling the employee’s work under the employment contract or, if no such work exists, equaling his/her education, professional skills or experience) covers all departments and offices of the employer entity (and also other entities in which the employer exercises control in personnel matters) and the employer is also required to provide the employee with reasonable training required by the new duties. This obligation is, in general, interpreted broadly and applies throughout the applicable notice period.

The employer has a re-employment obligation if the employer needs new employees to the same or similar duties that the employee made redundant was doing within four months from the termination of employment (six months if the employment has lasted at least for 12 years). 

There is no minimum number of affected employees required for the rules to apply. If the employer regularly employs at least 20 employees, the Co-operation Act applies, and subject to Act, the employer is required to conduct change consultation procedure prior to making any decisions on the terminations, temporary layoffs, making employment part-time, or unilateral changes in  essential terms of employment. In case the employer regularly employs less than 20 employees, the consultation obligation is not applicable and the termination procedure is more straightforward. 

If the employer is making at least 10 employments redudant, the employer furthermore has an obligation to notify the employment and economic development office. There are also additional obligations relating to making employees aged 55 or more redundant.

Get in touch
 

Nikolas Sjöberg
Finland
Nikolas.sjoberg@deloitte.fi | +358 44 750 5663