Every country in the world has its own rules and regulations when it comes to employment contracts. In Finland, oral contracts are technically permissible, but it’s still best practice to provide all employees with a written agreement. Employers are also legally obliged to provide certain information in writing.
In this section, we’ll cover everything you need to know about employment contracts in Finland, so you can ensure the agreements you provide to your Finnish staff are legal and compliant. We’ll discuss the mandatory terms that need to be included in contracts, as well as additional clauses you could choose to include. We’ll also talk about the conditions that need to be met for fixed-term contracts to be permissible in Finland and the situations when they can be extended.
An employment contract is an agreement between an employer and an employee that sets out the terms and conditions of employment. As in all countries, there are certain rules that apply to employment contracts in Finland, which employers should be aware of.
In Finland, oral contracts are technically valid and legally binding. However, it’s best practice to provide employees with a written contract. At a minimum, employers must provide employees with a written confirmation of the principal terms of employment, as stipulated in the Employment Contracts Act. This must be given to employees within seven days of their start date. The only exception is when the employment contract is for less than three weeks.
Employers in Finland can include a probationary period in their contracts to allow both parties to assess whether the situation is a good fit. The terms of the probationary period must be agreed between the employer and the employee, but probationary periods can’t exceed six months.
Probationary periods can be extended if the employee takes sick leave or family leave during the probationary period, with certain limitations. Collective bargaining agreements may provide for shorter probationary periods.
Certain employment policies are mandatory in Finland. For example, employers with more than 30 employees must implement a non-discrimination policy. All employers in Finland must also have an equality policy, including a pay survey with details of the employment and compensation of women and men. This policy must be available to employees and updated every second year.
Employers in Finland are free to agree on the terms of their employment contracts with employees. However, they may not be less favourable to the employee than the minimum standards set by employment legislation or any collective bargaining agreement that applies. Certain terms must be provided to employees in writing.
While oral contracts are legally binding in Finland, employers must provide employees with a written statement of their key terms of employment. The specific terms that must be included are outlined in the Employment Contracts Act. They include:
Employers can also choose to include other terms in their employment contracts. For example, you could include the following:
In Finland, permanent employment is the norm. However, fixed-term contracts can be used if the employer has a valid reason. These might include:
It is also possible to hire an employee on a fixed-term contract if they have been an unemployed jobseeker for the full previous year. In this case, the duration of the fixed-term contract can’t be longer than one year.
Unlike in some other countries, there’s no statutory maximum length for fixed-term contracts in Finland, nor is there a maximum number of times a contract can be renewed. However, employers can’t use successive fixed-term contracts if this shows that the company has a need for permanent employment.
Fixed-term contracts in Finland generally cannot be terminated by either party before their end date. However, it is possible to include a clause for early termination in the contract. Fixed-term contracts in Finland usually end either on the agreed end date or on completion of the agreed work.
Employers can subject fixed-term employees in Finland to a probationary period. However, this period may not exceed half of the total length of the contract. In any case, it can’t be longer than six months.
In Finland, there is no statutory maximum length for a fixed-term contract. In theory, employers may renew or extend fixed-term contracts indefinitely; However, repeated fixed-term contracts are not allowed if their total duration proves that the employer has a permanent need for labour.
If an employee is hired on several successive fixed-term contracts without interruption (or with only minor interruptions), they accrue benefits such as sick pay and annual leave at the same rate as permanent employees.
The standard working hours in Finland are between 37.5 and 40 hours per week, depending on the sector. The usual working week is Monday to Friday. The rules concerning working hours are set by the Working Hours Act.
Under the Working Hours Act, an employee’s regular working hours in Finland should not exceed 40 hours per week or eight hours per day. In some sectors, regular working hours can be organised as intermittent work, with a maximum of 80 hours per two-week period or 120 hours per three-week period. Collective agreements may also provide for a different maximum amount.
Any hours worked above the statutory maximum of 40 hours per week must be paid as overtime in Finland. In general, an employee’s total overtime should not exceed 138 hours over four months or 250 hours annually. Overtime is generally paid at 150% of the employee’s normal wages for the first two hours, and 200% for any additional hours. Overtime on weekends and rest days is paid at 200%.
Employees in Finland have the right to a break of at least one hour if they work for more than six hours per day. Employees can agree to take a shorter break, but it can’t be less than 30 minutes.
Employees are also entitled to a break of 11 hours between each shift, which is known as the daily rest period. Daily rest periods can be temporarily shortened to either seven hours or five hours (for a maximum of three consecutive days) for practical reasons, as long as the employee agrees. Employees must be compensated for shortened rest periods with additional time off;
In addition, employees are entitled to a weekly rest period of 35 consecutive hours, ideally including Sunday. Employees who are asked to give up their weekly free time must be compensated with either additional remuneration or time off.
Employers in Finland can choose to give their employees flexible working hours. This means that employees choose the actual hours they work, as long as they get their work done. Some employers let employees decide when they start and finish work as long as they work certain core hours in the middle of the day.
International students in Finland on a student visa have the right to work for up to 30 hours per week alongside their studies. Those conducting research or doctoral studies must have a separate residence permit for scientific research.
Many employees in Finland spend at least part of their time working remotely, either from home or another location. However, Finnish employment law doesn’t expressly recognise the concept of remote work. All employment legislation applies equally to remote and in-person workers.
In Finland, remote work is optional for both employees and employers. That means that employees can’t demand the right to work from home, and employers can’t impose it. However, employers can ask their employees to temporarily work remotely in exceptional circumstances.
In practice, the terms of remote work are generally agreed in a remote work agreement that outlines the rights and responsibilities of both parties. Many companies also have remote work policies that set clear rules and guidelines.
In response to the recent rise in remote work, many countries around the world have introduced remote work visas (or ‘digital nomad visas’). These allow remote employees to temporarily live and work in a country without being subject to the usual immigration or tax requirements.
There is currently no digital nomad visa in Finland. Remote employees are allowed to work remotely from Finland if they are there legally for another reason. However, it’s not possible to obtain a residence permit based on remote work. There is a self-employment visa that allows self-employed professionals to work remotely from Finland.
Like all countries, Finland has its own rules and regulations when it comes to employment contracts — and non-compliance could land your company in hot water.
Thankfully, our team is experienced in drawing up tailored, compliant contracts in Finland (and more than 100 countries worldwide). That means that, when you work with us, you won’t need to waste time worrying about whether you’ve got it right. Instead, you can focus on what matters: your business.
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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