Legal Alerts/1 Jun 2026

New Changes to the Finnish Employment Legislation Entered into Force

The Finnish government has enacted significant amendments to the Employment Contracts Act, effective 1 June 2026. These reforms are designed to reduce employment barriers, strengthen the operating conditions of small and medium-sized employers and address Finland's unemployment challenges. The changes affect fixed-term contracting, layoff notice periods and re-employment obligations.

Fixed-term contracts without a valid reason

Employers may now conclude a fixed-term employment contract without a valid reason, provided no employment relationship has existed between the employer and the employee within the five years preceding the contract. There is no requirement to assess whether the need for labour is permanent. Such contracts are capped at a maximum duration of one year.

Either party may terminate a fixed-term contract concluded without a valid reason once it has been in force for at least six months. Upon termination, the employer must assess whether the employment relationship can be extended and, under certain conditions, offer the employee work following the end of the contract if the employer is considering hiring additional staff.

Lay-off notice period cut in half

The statutory notice period for lay-offs has been reduced from 14 days to seven days. All other procedural obligations relating to the lay-off process continue to apply in full. Note that applicable collective bargaining agreements may still contain the previous 14-day notice requirement, in which case those terms continue to govern.

Re-employment obligation narrowed for smaller employers

The re-employment obligation now applies exclusively to employers with at least 50 employees regularly in employment; smaller employers are exempt. For employers at or above that threshold, the obligation remains fully in force. Here too, collective bargaining agreements may retain the previously applicable terms, which would continue to take precedence.

If you have any questions concerning the amendments to the Employment Contracts Act or their implications for your organisation, please contact the undersigned or other members of our Employment team.