There are various ways in which an employment relationship can come to an end. An employee might quit for a new position or be dismissed for reasons related to either them or the company. In the worst-case scenario, employees may need to be laid off if your company goes out of business.
Whatever the situation, there are various rules and regulations that apply to the end of an employment relationship in Finland. In this section, we’ll discuss the notice periods that apply to both employers and employees and the rules for firing employees in Finland.
We’ll also talk about the post-termination restrictions employers can impose on employees in Finland, plus what happens to employees after a transfer of undertakings. In short, we’ll discuss everything you need to know to manage the end of your employment relationships in Finland effectively and compliantly.
Statutory notice periods in Finland are set by the Employment Contracts Act, an important piece of employment legislation. In some cases, collective bargaining agreements between employers’ organisations and trade unions also include specific provisions. Regardless of the collective agreement that applies, notice periods in Finland can’t be longer than six months.
In Finland, notice periods for both employers and employees depend on how long the employee has been engaged. If an employer terminates the employment contract, the notice period is as follows:
If the employee terminates the employment contract, the standard notice period in Finland is 14 days if they have been employed for up to five years, and one month if they have been employed longer. Again, collective bargaining agreements or individual employment contracts may provide for a different notice period.
There is no statutory requirement for severance pay in Finland. However, some companies include this provision in their employment contracts.
Including a probationary period in an employment contract is a customary practice in Finland. The law states that probationary periods can’t exceed six months, or half the length of the contract for fixed-term engagements. During the probationary period, neither party needs to give notice to terminate the employment contract.
There are strict rules for the termination of employment in Finland, which employers should be aware of before employing workers. Employers must give the employee the correct amount of notice as defined by Finnish labour law or the relevant collective agreement, except in certain rare circumstances. Employers must also have a valid reason for termination of employment in Finland, which may be related to the employee or the business.
Employers in Finland may terminate an employment contract because of the employee’s behaviour, actions, or performance. For example, an employee violating a law or breaching their terms and conditions of employment would constitute a valid reason for termination. A change to the employee’s circumstances that means they are no longer able to perform their work is also a valid ground for termination.
Employers may not terminate an employee’s contract due to the employee’s illness or disability unless this significantly impacts their ability to perform the work and the employer cannot reasonably be expected to continue the employment. The employee’s political, religious, or other personal views or their participation in social activism or industrial action are also not justifiable grounds for termination.
Employers in Finland can also terminate an employment contract for reasons related to their business. For example, employers may need to lay off employees if the amount of work they can offer substantially decreases, or if the company’s financial performance is reduced.
In these cases, employers should try to reassign or retrain employees before resorting to layoffs. Employees should first be offered work that corresponds to their employment agreement. If no such work exists, they should be offered other work that matches their qualifications, expertise, and experience.
Termination of employment without notice is only possible in limited circumstances in Finland. Employers may be able to terminate an employee without notice if they have committed a serious breach or seriously neglected their duties. Similarly, an employee may be able to terminate their contract if the employer has seriously breached or neglected their responsibilities as an employer.
Post-termination restraints (or post-termination restrictions) are restrictions that employees can impose on their employees’ actions after the termination of an employment contract. These are generally only permissible when there’s a genuine need to protect the interests of the business. The main types of post-termination restrictions that employers can impose on employees in Finland are:
Non-compete agreements prohibit employees from working for or setting up a business that competes with their former employer. In Finland, non-compete agreements are legal but are subject to certain conditions.
First, the maximum period for a non-compete agreement is one year after the termination of the employee’s contract. Employers must compensate their former employees during the restricted period, at a rate of 40% of their former salary for periods of up to six months, or 60% for longer agreements.
Employers are allowed to terminate a non-compete agreement in Finland during the course of their employment and don’t need any specific grounds to do so. However, it’s not possible for an employer to terminate a non-compete agreement after an employee has resigned.
This type of restriction prohibits employees from soliciting or poaching employees or customers from their former employer. Non-solicitation agreements are not regulated by the law in Finland, but they are possible and common. In some cases, non-solicitation agreements may be comparable to non-compete obligations, and therefore subject to the same requirements.
Confidentiality agreements prevent employees from sharing trade secrets or other confidential information with others after their employment is terminated. Again, this type of agreement is not specifically regulated by law in Finland. However, they are common in practice.
In certain circumstances, employees in Finland may waive some of their rights. In Finland, this is only possible as part of an exit or settlement agreement and is subject to certain conditions. Employees cannot waive mandatory rights provided by employment laws but may be able to waive other rights granted by an employer or a collective agreement.
A transfer of undertakings is when one company acquires all or part of another company, including its employees. Employees in Finland are protected by the Employment Contracts Act, which contains provisions concerning what happens in the case of a transfer of undertakings.
When a business is transferred in Finland, employees are automatically transferred to the new business along with their existing terms and conditions. Employees must also maintain continuity of service, meaning that they continue to accrue any statutory benefits at the same rate as before the transfer. The rights and obligations set out in employment contracts transfer to the new business.
A transfer of undertaking is not a valid ground for termination of employment in Finland. However, employers may be able to dismiss employees based on business reasons brought about by the transfer, such as the closing of a location.
Before a transfer of undertakings can take place, both the transferor and the transferee are required to inform employee representatives and provide them with specific information including the date of the transfer, the grounds, and the consequences for employees. There are no formal requirements for how this information must be presented.
Employees don’t have the right to object to a transfer of undertakings in Finland. However, employers must give employees at least one month’s notice before the transfer. Employees who don’t wish to be transferred can choose to give notice and end their employment as of the transfer date.
There are many different ways an employment contract can come to an end. But whatever the situation, you need to understand the rules that cover the end of employment in Finland — or you could end up facing legal issues.
Our solutions ensure your business is protected from risk when a relationship with a worker comes to an end — whatever the reason. We can also help you to avoid missed opportunities by re-deploying talent where possible.
The process for termination of employment in Finland starts with checking the grounds, contract and collective agreement. Before deciding, employers complete any required warnings, employee hearing, staff consultation and consideration of other work. They then give notice, settle final pay and complete the departure paperwork.
For dismissal based on conduct or ability, the employee normally receives a warning and a chance to improve. The employer must hear their response before deciding, and the employee can bring someone to assist. If their ability to work has changed significantly, the employer must consider other suitable work.
For redundancy, employers must offer available suitable work and reasonable training where these could avoid dismissal and complete any required staff consultation before deciding.
Employers normally deliver notice personally, using post or electronic delivery if that is not possible. They must promptly provide the end date and reasons in writing if asked, apply the correct notice period, settle final pay, provide a requested employment certificate and complete the required records and reporting.
The default notice period in Finland for employers’ termination notices range from 14 days to six months. Unless the contract or collective agreement sets different terms, employers give notice based on the employee’s continuous service:
Employees normally give 14 days’ notice during their first five years, or one month after that. A contract or collective agreement can set different periods, but an agreed period cannot exceed six months. If the employee’s notice is longer than the employer’s, the employee can use the shorter employer period.
Notice starts the day after it is given, and normal pay continues even if the employer asks the employee not to work. Fixed-term expiry, termination during probation and immediate dismissal have separate rules, so these notice periods do not automatically apply.
Termination of employment in Finland may be justified by employee misconduct or a significant change in the employee’s ability that leaves them unable to perform their duties. Employers can also dismiss for redundancy when available work has fallen substantially and permanently.
Since 1 January 2026, dismissal for reasons relating to the employee requires a proper reason. Repeated neglect, unjustified absence or failure to follow lawful instructions can qualify, but none automatically justifies dismissal. Employers must assess the seriousness, the employee’s role, instructions given and their own conduct.
Employees normally need a warning and a chance to improve, followed by an opportunity to respond before dismissal. If their ability to work has changed significantly, employers must consider other suitable work. Discrimination and protected activities cannot justify dismissal.
Redundancy still requires proper and weighty financial or production grounds. Employers must offer available suitable work and reasonable training where these could avoid dismissal.
Ending employment without notice requires an exceptionally serious breach that makes continuing through the notice period unreasonable. Employers normally have 14 days to act after learning of the grounds.
At the end of contract in Finland, employers must pay wages earned through the employee’s last day, compensation for unused annual leave and any other outstanding amounts. These can include overtime, allowances, earned commissions or bonuses and expenses.
Employers must also pay any holiday bonus required by the collective agreement or contract, notice pay where due, and any severance required by the employment terms or a settlement.
Final pay is normally due when employment ends, unless another date has been agreed. If that date falls on a non-banking day, payment generally moves to the preceding banking day. Employees must receive an itemised payslip.
Late payment can lead to interest and up to six calendar days’ extra pay for the delay. If an amount is unclear, disputed or wrong because of a calculation error, the employee must notify the employer within one month of leaving. The employer then has three working days to correct payment before waiting time pay starts.
Employers must provide severance pay in Finland when a contract, collective agreement, settlement or another specific obligation requires it. Finnish law does not set a general severance formula based on length of service.
A lawful dismissal does not automatically entitle an employee to a lump-sum payment. Employers still owe salary during notice, compensation for unused annual leave and outstanding earnings. Compensation for unlawful dismissal is also separate from any severance entitlement.
When making redundancies, employers regularly employing at least 30 people must also provide employment training or coaching for employees with at least five years’ continuous service. This helps the employee find another job.
The training or coaching must normally be worth at least one month’s pay, using whichever is higher: the employee’s own monthly pay or the average monthly pay at the workplace. The employer provides this support rather than automatically paying the equivalent amount in cash. The same qualifying employers must normally continue occupational healthcare for these employees for six months after the obligation to work ends, subject to the statutory conditions.
For fixed-term employees, termination of employment in Finland normally happens on the agreed end date or when the specified work is finished. Neither party usually needs to give notice.
Ending the contract early on ordinary notice generally requires a clause allowing it, and the employer still needs lawful grounds. Ending employment during probation or immediately for a serious breach follows separate rules.
Since 1 June 2026, employers can offer a fixed-term contract of up to one year without a temporary reason if they have not employed the person in the previous five years. Either side can give ordinary notice once the employment has lasted six months. Employers still need lawful grounds to dismiss.
For these contracts, employers must explain before expiry whether employment can continue. If requested, they must provide that explanation in writing within one month. If they plan to recruit for the same or similar work when the contract expires, they must offer it to the employee. This duty continues for one-third of the completed contract’s duration. The former employee has two weeks to respond to an offer sent to the address they provided.
If an employee continues working after any fixed term with the employer’s consent, the employment can become permanent.
After termination of employment in Finland, employers can enforce confidentiality duties and valid non-compete agreements. A non-compete needs a particularly strong reason linked to the employee’s work, such as access to business secrets or special training. The employee’s duties and position matter, so including a standard clause in the contract is not enough.
Employers must pay 40% of salary for a restriction lasting up to six months, or 60% if it lasts longer. The 60% rate applies throughout the restricted period, not just after six months. A non-compete can normally last no more than one year.
The restriction does not apply if employment ends for reasons attributable to the employer, such as redundancy. Employees dismissed for misconduct are not automatically released from it.
Employers can withdraw a non-compete by giving notice equal to one-third of its duration, with a minimum of two months. They lose that option once the employee gives notice to end their employment.
An employer’s checklist for termination of employment in Finland should cover the reason for dismissal, the steps before the decision, notice, final pay and any duties after departure.
Following redundancy, the re-employment duty (takaisinottovelvollisuus) requires employers regularly employing at least 50 people to offer suitable same or similar work that becomes available within four months if the former employee is a registered jobseeker. This period extends to six months after at least 12 years’ continuous service.
Employers must also pay the required compensation for any valid non-compete restriction that continues after employment ends.
Redundancy can justify termination of employment in Finland when available work has fallen substantially and permanently. Dismissal for cause concerns employee misconduct or a meaningful change in their ability that leaves them unable to do the job.
Redundancy requires proper and weighty financial or production grounds. Employers must offer available suitable work and reasonable training where these could avoid dismissal and complete any required consultation. Falling revenue alone does not establish redundancy if the employee’s work remains.
Since January 2026, dismissal for reasons relating to the employee needs a proper reason, assessed across all the circumstances. Repeated neglect can qualify, but employers normally need to give a warning, allow time to improve and hear the employee’s response. A significant change in ability to work also requires consideration of other suitable work.
Both routes normally require notice. Dismissal for cause does not automatically allow employment to end immediately; that requires an exceptionally serious breach. A temporary suspension of work and pay, often called a layoff in Finnish guidance, is also different from permanent redundancy.
CXC simplifies complex termination processes in Finland by helping international businesses meet local employment requirements, reduce the risk of disputes and handle employee departures with care and sensitivity.
Termination in Finland can involve strict legal requirements, applicable collective agreements and specific procedures depending on the reason for dismissal. CXC helps businesses understand these obligations, prepare the necessary documentation and coordinate final payments and employee communications, reducing the administrative burden on internal HR teams.
With more than 30 years of global workforce management experience, CXC understands the importance of protecting both the business and the employee. For employers, this means helping prevent costly mistakes, minimise disruption and protect their reputation. For employees, it means clear communication, confidentiality and respectful treatment during what can be a difficult time.
Speak to our team to discuss how CXC can help your business manage termination processes in Finland carefully and compliantly.
With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.
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