Blog/Guides
Terminating employment in Finland: a guide for employers
Personal and production-related grounds, the warning the employer must give first, statutory notice periods, and the re-employment obligation that follows a redundancy.
- The employer’s notice period runs from 14 days (under a year of service) to six months (over twelve years). The employee’s runs 14 days up to five years and one month after that.
- Before dismissing for a breach of obligations, the employer must give a warning and a real chance to correct it, unless the breach is so serious the relationship cannot reasonably continue.
- Illness only becomes grounds for dismissal once the reduction in capacity is substantial and long-term, adaptation is ruled out, and there is no other work to offer.
- An employer that makes someone redundant and needs the same work back within four months (six months after twelve years of service) must offer it to them first, but only if it has at least 50 employees, once the June 2026 threshold takes effect.
- Cancellation ends the employment immediately and needs an extremely weighty reason; ordinary dismissal runs to the end of the notice period instead.
When an employer is about to end someone’s employment, the question is not what the law says in the abstract. It is whether this particular reason will hold up, what has to happen first, and how long it takes.
Three things decide that. The grounds the employer relies on, the procedure it follows before telling the employee, and the notice period that runs afterwards. Get the grounds right and the procedure wrong and the dismissal can still fail.
Finnish law separates two families of grounds, and they behave completely differently. Grounds relating to the person cover conduct and capacity. Financial and production-related grounds (redundancy) cover the disappearance of the work itself. The two cannot be mixed: dismissing for redundancy when the real reason is performance is how employers end up paying compensation.
A note on recent changes. The Employment Contracts Act was amended on 1 January 2026, and the amendment lowered the threshold for dismissing on grounds relating to the person where an employee breaches their obligations. Guidance published before that date is out of step with the current position, including much of what is still ranking on the Finnish web.
When can an employer dismiss someone for reasons relating to them personally?
When they have breached or neglected their obligations, or their capacity to do the job has substantially changed, and, in the first case, only after a warning.
The occupational safety and health administration lists the kinds of breach that qualify: neglect of duties, unjustified absence, working carelessly or against instructions, inappropriate behavior, and repeated lateness. The other limb is different in kind: a substantial change in the employee’s ability to meet the requirements of the work.
Nothing here is decided in the abstract. The assessment weighs the employer’s headcount, the circumstances of both parties, the employee’s position and the nature of their duties, and, surprisingly to many, the employer’s own conduct. Whether the employer gave instructions, and whether it intervened when things first went wrong, is part of the test. An employer who said nothing for a year and then dismissed has a weaker case than one who managed the problem.
Some grounds are excluded outright. Under the Act a proper reason is not:
- illness, injury or accident, unless capacity is reduced substantially and long-term
- taking part in industrial action
- political, religious or other opinion, or participation in societal or association activity
- using the legal remedies available to them
And dismissal is not permitted for minor shortcomings or isolated mistakes. The bar is a pattern, or a serious single breach, not a bad week.
The warning is not optional
Where the employee has breached an obligation, the employer may not dismiss before giving a warning and a real chance to correct the behavior. The only way past this is a breach so serious that continuing the relationship cannot reasonably be required of the employer.
That exception is narrower than it sounds and it is assessed case by case. The warning is the default, and the exception is something the employer should be ready to defend in court, because that is where it will be defended.
Illness needs a medical basis, not a judgment call
Dismissing on the basis of illness, injury or accident is possible only where the reduction in capacity is substantial and long-term, the duties or working conditions cannot be adapted, and there is no other work to offer. The assessment of duration and of the effect on coping with the job is made in healthcare, not by the employer and not by the line manager.
Worth noting how narrow the redeployment duty is here: the employer’s obligation to look into placing the employee in other work applies specifically to situations where their conditions for working have changed. It is not a general obligation attached to every personal-grounds dismissal.
Next: before you draft anything, check whether a written warning exists on file, dated, with the conduct described. If it does not, the case is not yet at the point of dismissal.
When can an employer make someone redundant?
When the available work has diminished substantially and permanently for financial, production-related or reorganization reasons, and there is nowhere else to put the person.
“Substantially and permanently” is the whole test. A bad quarter is not it. The authority is explicit that reorganization which produces no actual reduction in work is not grounds at all. Moving boxes on an org chart does not create a redundancy.
Two things defeat the grounds outright:
- The employer hired someone into similar duties, whether before the dismissal or after it.
- The reorganization did not actually reduce the work.
Redeployment comes before dismissal
The employer cannot dismiss on these grounds if the employee can be placed or trained into other duties. The order is fixed: first work matching their employment contract, then other work matching their training, professional skill and experience.
The training duty covers what is needed for the new duties and can be considered appropriate and reasonable for both parties. It is not a duty to fund a career change, but it is more than a formality.
The procedure itself sits in the Act on Co-operation within Undertakings rather than the Employment Contracts Act, so check whether the company’s headcount brings it inside that Act before starting.
The re-employment obligation, and who it still applies to
An employer that makes someone redundant and then needs the same or similar work done again may have to offer it back to them.
| Situation | Window |
|---|---|
| Employment ended on financial or production-related grounds | 4 months from the end of employment |
| Employment had run continuously for at least 12 years | 6 months |
Two limits matter. The duty only covers former employees registered as jobseekers with the public employment services, and the employer is expected to check with the authority or contact them directly rather than wait. And from 1 June 2026 the obligation only applies to employers with at least 50 employees: smaller companies now fall outside it entirely.
Even where it applies, it sits third in a queue. Laid-off employees are recalled first. Part-time employees must be offered additional hours next. Only then does the re-employment duty bite. And in a dispute, the employer carries the burden of proving it met the duty.
One more thing runs alongside the notice period: an employee dismissed on these grounds has a right to paid employment leave during it, to draw up a plan and look for work.
Next: if you are heading toward redundancies, write down the reduction in work that can be evidenced, in hours or in volume, before writing anything else. That evidence is the case.
How long is the notice period?
By length of service, unless the collective agreement or the contract says otherwise. The statutory periods are asymmetric: the employer’s are longer.
When the employer gives notice:
| Length of employment | Notice period |
|---|---|
| 0–1 year | 14 days |
| 1–4 years | 1 month |
| 4–8 years | 2 months |
| 8–12 years | 4 months |
| Over 12 years | 6 months |
When the employee resigns:
| Length of employment | Notice period |
|---|---|
| 0–5 years | 14 days |
| Over 5 years | 1 month |
The parties can agree different periods, inside two limits: never longer than six months, and the employee’s period may never be longer than the employer’s. If a collective agreement sets its own notice periods, those apply instead of the statutory ones, unless the agreement itself allows the parties to agree otherwise. Which agreement binds the employer is settled in Does a collective bargaining agreement bind the employer?
The employment continues to the end of the notice period and the employee keeps normal pay throughout, including usual benefits in kind such as a phone or a car, unless there is a specific obstacle to providing them. The employer may release the employee from the duty to work; that does not release the employer from paying.
If an employee walks out before the notice period ends without an agreed basis, they may be liable for the loss that causes the employer.
Next: check your collective agreement’s notice table before you use the statutory one. On this point the agreement usually wins.
What is dismissal with notice, and what is summary cancellation?
Dismissal with notice ends the employment at the end of the notice period. Cancellation ends it immediately. The threshold is far higher: an extremely weighty reason, meaning a breach or neglect so serious that the other party cannot be expected to continue even for the length of the notice period.
Probation is its own case. Where a probationary period has been agreed, either side may cancel during it without a notice period, but not on discriminatory grounds, and not on grounds otherwise improper given the purpose of probation. If no probationary period was agreed, there is none; it never arises automatically. How long it may be is covered in What must an offer letter and employment contract in Finland include?
Next: if you’re weighing cancellation instead of notice, write down why the breach could not have waited even the shortest notice period. That is the test the employer will have to defend.
What is the correct procedure?
Four steps, in order, and each is a place dismissals fail.
1. Hear the employee first. Before ending the employment the employer must give the employee an opportunity to state their own view of the reason. They have the right to bring an assistant, and they must be given time to prepare a position, not asked to respond on the spot.
2. Deliver the notice personally. If that is genuinely not possible, it may go by letter or electronically, in which case it is deemed received at the latest on the seventh day after sending. There is a trap here. If the employee is on annual leave, or on a break of at least two weeks given to even out working time, a letter or electronic notice is deemed delivered no earlier than the day after that leave ends.
3. Put the reason in writing if asked. On the employee’s request the employer must state, without delay and in writing, the date the employment ends and the grounds it knows of. They should be stated clearly and truthfully: vague or shifting reasons are what turn a defensible dismissal into a litigated one. The occupational safety and health administration publishes a form for this.
4. Settle up on the last day. The employer owes final pay on the last working day unless otherwise agreed, and must provide a work certificate if the employee asks for one.
Notice can be given orally and remains valid, but it is safer in writing. In a dispute the person who gave notice has to prove it was given.
Next: map these four steps against your own calendar for this dismissal (the hearing date, the delivery date, and the last working day) before you send anything.
What does getting it wrong cost?
Unfounded termination leads to a liability to compensate. Beyond the money, two practical asymmetries are worth internalizing: the employer carries the burden of proof on the re-employment obligation, and case law turns heavily on documentation the employer either created at the time or did not.
The Supreme Court of Finland’s decision KKO:2014:98 is a useful calibration. A salesperson’s low margin percentage did not by itself show that they had materially breached or neglected their obligations: a number moving in the wrong direction is not, on its own, a ground.
Next: gather the dated documentation you already hold (warnings, hearing notes, correspondence) before a dispute forces you to reconstruct it from memory.
How does Taito.ai help with this?
Taito.ai is a people operations system. It sets up and keeps maintained the employment records a Finnish termination turns on (length of service, warnings, hearing notes, and notice-period dates) so what applied to a given employee, and from what date, is always current.
Sources
- Finlex (2001) Employment Contracts Act, 55/2001, Chapter 6 (general provisions on termination).
- Finlex (2001) Employment Contracts Act, 55/2001, Chapter 7 (grounds for termination).
- Finlex (2001) Employment Contracts Act, 55/2001, Chapter 8 (cancellation of an employment contract).
- Finlex (2001) Employment Contracts Act, 55/2001, Chapter 9 (the termination procedure).
- Finlex (2021) Act on Co-operation within Undertakings, 1333/2021.
- Työsuojeluhallinto (n.d.) Ending an employment relationship.
- Työsuojeluhallinto (n.d.) Financial and production-related grounds.
- Työsuojeluhallinto (n.d.) Notice periods.
- Työsuojeluhallinto (n.d.) Personal grounds for termination.
Finlex publishes these acts in Finnish and Swedish only. There is no citable official English translation, so every rule here is paraphrased rather than quoted. Where the exact wording matters, follow the link and read the Finnish or Swedish text.
Disclaimer
Taito.ai does not provide legal, tax or accounting advice. This article is general information about the law as it stood on the date above, not advice on your situation, and it is not a substitute for it. Rates and thresholds change. Check with a qualified adviser before acting on anything here.
