Finland

In Finland, the termination of employment contracts follows specific notice periods as per the Employment Contracts Act (ECA) of 2001. These periods are dependent on the length of employment.

Notice Periods

For both employers and employees, the notice periods are as follows:

• Less than one year of employment: No minimum notice period is required.
• Between one year and four years of employment: One month's notice.
• Between four years and eight years of employment: Two months' notice.
• Between eight years and twelve years of employment: Four months' notice.
• Over twelve years of employment: Six months' notice.

These are the minimum legal requirements. Employment contracts or collective agreements may stipulate longer notice periods. The employer's notice period cannot be shorter than the employee's notice period in the agreement.

Exceptions to Notice Periods

There are certain exceptions to these notice periods:

• Mutual Agreement: If both employer and employee agree, they can shorten the notice period or waive it entirely.
• Termination for Cause: In cases of serious misconduct by the employee or a significant breach of contract, the employer may resort to summary dismissal without notice.

Notice Periods During Lay-offs

During a lay-off period, employees have the right to terminate their employment contract with no notice period. This right applies throughout the lay-off period, except for the last seven days before the scheduled end date.

In Finland, there is generally no legally mandated severance pay scheme in the traditional sense. There's no legal obligation for employers to provide a specific severance payment upon termination unless the reason for termination is economic, production-related, or financial.

Severance Pay in Specific Circumstances

When employment is terminated due to economic, production-related, or financial reasons, employers must provide severance pay, with the amount determined by the employee's length of service. Here's the breakdown:

• At least 5 years of employment: Equivalent to at least one month's salary.
• At least 10 years of employment: Equivalent to at least two months' salary.
• At least 15 years of employment: Equivalent to at least three months' salary.
• At least 20 years of employment: Equivalent to at least four months' salary.

Additional Considerations

Collective bargaining agreements or individual employment contracts may include more generous severance provisions than this minimum requirement. Severance packages can sometimes be negotiated between employers and employees, even in situations where severance pay is not legally required.

If your employment is covered by a collective agreement, it's essential to consult the agreement for any severance pay provisions. Your contract should be carefully reviewed to see if it addresses severance pay.

In Finnish labor law, there are several ways an employment relationship can end. These include resignation by the employee, termination by the employer, mutual agreement, and expiry of a fixed-term contract.

Types of Employment Termination

Resignation by Employee: Employees can terminate their employment at will. No specific reason is needed to justify the resignation.

Termination by Employer: The employer can only terminate an employment contract if "proper and weighty" grounds exist. These grounds generally fall into two categories:

• Employee-Related Grounds: Serious misconduct, incompetence, or repeatedly neglecting duties, despite warnings.
• Financial or Production-Related Grounds: Economic necessity, restructuring, reduction of workforce, etc.

Mutual Agreement: Both employer and employee can mutually agree to end the employment relationship.

Expiry of Fixed-term Contract: A fixed-term employment contract ends automatically on the agreed-upon date, without formal termination needed.

Termination Procedure

1. Notice of Termination

Notice must be given in writing or delivered in person. Electronic notice (e.g., email) may be valid if mutually agreed upon.

2. Consultation

Before terminating an employment contract for reasons unrelated to the employee's misconduct, the employer must engage in a consultation process with the employee. During consultation, the employer must explain the reasons for the proposed termination and give the employee an opportunity to respond.

3. Written Statement of Grounds (If Applicable)

If requested by the employee, the employer must provide a written statement outlining the grounds for termination and the date it takes effect.

Special Protections

Finnish law provides additional protections to certain categories of employees, such as pregnant employees, employees on parental leave, and shop stewards (union representatives). Terminating employees in these categories may require more extensive justifications and procedures.

Wrongful Termination

If an employer terminates an employment relationship without valid grounds or without following proper procedures, the employee may be entitled to compensation.