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Termination

Notice

Are employers required to give notice of termination?

An employer must provide notice of termination to employees before dismissal, regardless of the grounds for the termination. Notice should be given in writing and given to the employee personally.

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 (ie, without observing the notice period).

Redundancies

What are the rules that govern redundancy procedures?

Grounds for redundancies are that the work has been permanently and materially reduced or ceased due to financial and production-related reasons or restructuring of the employer company.

The Act on Cooperation within Undertakings (334/2007) sets out a strict consultation procedure which the employer must follow before making a decision on redundancies. The act applies to employers that regularly employ at least 20 employees in Finland.

Employers that regularly employ fewer than 20 employees have a simple consultation obligation set out in the Employment Contracts Act (55/2001). Accordingly, an employer that intends to make an employee redundant must discuss the reasons for the redundancy with the employee in question as early as possible.

The statutory periods of notice are set out by the Employment Contracts Act. These may be deviated from by an individual employment agreement or a collective bargaining agreement.

Are there particular rules for collective redundancies/mass layoffs?

Generally, the rules that apply to redundancies are determined by the size of the employer (see above).

The cooperation obligation under the Act on Cooperation within Undertakings is more extensive if the plan subject to consultation may lead to the redundancy of at least 10 employees. In that case, the minimum consultation period is extended from two to six weeks.

Protections

What protections do employees have on dismissal?

Finnish employees enjoy high protection against dismissal.

The employer must always have proper and weighty grounds set forth by law for terminating an employment contract. In addition, certain groups of employee enjoy particular protection against dismissals. Such employees include shop stewards, industrial safety delegates and other employee representatives, 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 (for employee representatives, the maximum amount is 30 months' salary). Failure to comply with the cooperation and consultation obligation may lead to the court ordering the employer to pay compensation of up to €34,519 per redundant employee. 

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