Hire in Finland

The trial period cannot exceed six months in duration.

According to the Working Hours Act, the standard working hours should not surpass eight hours per day or 40 hours per week. However, collective bargaining agreements often include provisions on working hours that may differ from those outlined in the Act.

The Act also mandates statutory rest periods, with the following principles:

• – Employees must be provided with a minimum one-hour break per day if their daily working hours exceed six.
• – Employers and employees may mutually agree to a shorter rest period of no less than 30 minutes.
• – If the daily working hours exceed 10, employees are entitled to an additional rest period of up to 30 minutes after completing eight hours of work.
• – Employees must receive a consecutive 11-hour rest period each day.
• – A minimum of 35 hours of uninterrupted rest per week should be granted to employees, preferably including Sunday.

It’s worth noting that the Working Hours Act generally doesn’t apply to managerial staff or employees working remotely.

Over a four-month reference period, the maximum allowable overtime is 138 hours, with a yearly cap of 250 hours. Additional overtime may be arranged by the employer with employee representatives, individual employees, or employee groups.

Typically, the compensation for daily overtime work is 50% for the initial two hours and 100% thereafter. For weekly overtime, the surcharge pay is also 50%. Alternatively, if mutually agreed upon, overtime may be partially or fully compensated with equivalent time off.

Collective agreements frequently include a holiday bonus equivalent to 50% of the total annual holiday pay. Employers typically disburse this bonus either before or after the annual holiday period. It’s important to note that the holiday bonus is entirely based on collective agreements, and there is no statutory entitlement to receive it. Additionally, employee performance-related bonus schemes are commonly implemented in Finland.

Terminating an employment contract typically occurs when either the employer or the employee issues notice of termination. The employee isn’t obligated to provide specific reasons for ending the contract but must adhere to the notice period. Conversely, the employer can’t terminate employment without substantial justification, whether it pertains to the employee or business-related matters. Prior to dismissal, the employer must formally notify the employee in writing.

Employers may terminate employment contracts for two primary reasons:

1. Individual Employee Related: Termination may result from severe breaches of duty by the employee or an inability to fulfill work obligations. In such cases, the employee is usually given prior notice and a chance to rectify their conduct.

2. Business Related: Termination may occur if work diminishes significantly and permanently due to financial or production-related issues. However, efforts should be made to consider retraining or alternative roles where feasible.

If either party commits a fundamental breach of the employment contract, the other party reserves the right to terminate the contract immediately, without adhering to the notice period.

In Finland, employees benefit from robust protections against dismissal. Certain groups, such as shop stewards, industrial safety delegates, pregnant employees, and those on family leave, receive additional safeguards against dismissals. In cases of unjustified dismissal, employees are entitled to compensation for unfair dismissal, ranging from three to 24 months’ salary.

The employer must adhere to the following notice periods:

The following notice periods are applicable to an employee:

Non-compete clauses:

Non-compete agreements are permissible only if they serve a significant purpose related to the employer’s business and operations. Without such justification, a non-compete agreement is considered void. Typically, these agreements can restrict an employee’s ability to engage in competitive activities for up to six months following the end of employment. However, if the employee receives adequate compensation, this restriction period may extend to a maximum of one year. Should the employment relationship end due to reasons originating from the employer, including redundancy, the employee is relieved of their non-compete obligations.

Non-solicitation clauses:

There are no specific legal regulations concerning the non-solicitation of customers and employees. Depending on the context, such clauses may be interpreted similarly to non-compete agreements. In such instances, the legal restrictions regarding non-compete agreements apply.

Typically, employees do not have a legal right to receive a severance payment.

In 2019, the European Court of Justice ruled that companies are required to establish a system for recording the working hours of their employees. Consequently, employers must adopt an objective, dependable, and easily accessible system for accurately tracking the daily working hours of each employee.

Finnish employees and employers exhibit a high degree of unionization, with over 70% of employees in Finland belonging to a trade union.

The employer is obligated to furnish the employee with a payslip accompanying each wage payment, either electronically or in printed form.

According to common practice standards, a payslip should typically contain:

• – Employee’s name, occupation, and date of birth
• – Employer’s name and location of the establishment
• – Start date of the employment relationship and, if applicable, the end date
• – Cumulative pay subject to withholding tax for the previous and current calendar years, as well as the latest pay period
• – Duration of the pay period
• – Taxes withheld for the latest pay period
• – Additional payments for shift work and period-based work made in the latest pay period
• – Holiday pay and annual holiday compensation disbursed alongside the wage payment.

The regulations regarding annual holidays are outlined in the Annual Holiday Act. Collective agreements may contain additional provisions regarding the determination of annual holidays and the corresponding wages or compensation.

Accrual of holiday days is based on the holiday credit year, spanning from April 1st to March 31st. For employment lasting less than a year as of March 31st, the employee is entitled to two weekdays of holiday for each complete month of holiday credit. For uninterrupted employment lasting a full year as of March 31st, the entitlement increases to two and a half days of holiday for each complete month of holiday credit. For instance, if an employment starts on April 1st or the first working day of April, the employee will accrue two and a half days of holiday for each complete month of employment during their initial year.

The summer holiday season typically runs from May 2nd to September 30th. During this period, employees usually take a minimum of two consecutive weeks of summer holiday.

Employees in Finland receive an annual vacation bonus, paid out in May, equivalent to two weeks of base salary.

Eligibility for sickness allowance from the state social insurance fund (Kela) begins nine working days after the onset of illness, excluding the day of onset. Typically, the employer covers the employee’s wages during this waiting period. Depending on collective bargaining agreements, many employers may also provide full salary coverage during the initial one to two months of illness. Social insurance will provide sickness allowance for a maximum duration of one year, equivalent to 300 working days. If the employee receives payment during the illness period, Kela will reimburse the employer. A doctor’s certificate is necessary for the duration of the illness.

In case of a serious illness or accident affecting a family member, employees have the right to take temporary leave (unpaid) from work if their presence is necessary.

Generally, leave for other reasons is determined by the relevant collective bargaining agreement. Typically, paid leave is granted for the following occasions:

• – The day of a wedding celebration or civil partnership registration may be granted as a paid day off if it falls on a working day.
• – The employee’s 50th and 60th birthdays are paid days off if they occur on working days.
• – In the event of the death of an immediate family member, a short absence (typically three days) is granted as paid leave. Immediate family members include a spouse (married or in a civil union), parents, grandparents, parents-in-law, children, or siblings.

Maternity Leave

Female employees are entitled to maternity leave lasting 105 working days, roughly equivalent to four months. Maternity leave can commence at the earliest 50 working days and at the latest 30 working days before the expected delivery date. Employers are not mandated to provide salary during maternity leave, although many collective bargaining agreements stipulate full salary payment for the initial three months.

Paternity Leave

Fathers of newborns are entitled to paternity leave totaling 54 working days. Of these, a maximum of 18 workdays can be taken while the mother is on maternity or parental leave.

Parental Leave

In addition to maternity and paternity leave, employees have the right to parental leave lasting 158 working days, beginning immediately after the conclusion of maternity leave. Consequently, the combined duration of maternity and parental leave totals approximately nine months. Parental leave can be availed by either parent, and one parent has the option to transfer up to 63 days to the other.

Moreover, employees are entitled to childcare leave following the conclusion of parental leave until the child reaches three years old. While only one parent may take the same period, they have the flexibility to divide the leave between them.