Consultation round on amendments to grounds for terminating employment begins

According to the Government Programme, the regulation concerning the grounds for terminating employment related to the employee will be amended so that, in future, a proper reason would be sufficient for terminating an employment contract. The Ministry of Economic Affairs and Employment requests comments on the legislative amendments to be submitted between 24 February and 7 April 2025. The amendments have been prepared in a tripartite working group that was not unanimous in its work.

The Government aims to remove barriers to hiring employees and to improve the operating environment, especially for small and medium-sized enterprises. Small enterprises, in particular, consider the legal risks associated with dismissals as significant barriers to hiring employees.

Proper reason required for terminating employment - arbitrary grounds continue to be prohibited

At present, an employer can terminate an open-ended employment contract if there is a proper and weighty reason related to the employee for this. A comprehensive view is always adopted when considering the sufficiency of the grounds for the termination.

According to the working group’s report, in future it would be required that there is a proper reason for the dismissal. This requirement means that an employer should have proper grounds related to the employee’s reprehensible behaviour or inadequate work performance for terminating employment. Any kind of reprehensible behaviour or inadequate work performance would not as such be considered to constitute sufficient grounds. The key issue is to assess whether it is reasonable to expect the employer to continue the employment relationship for a longer period than the period of notice. 

As before, the employer should also take into account other obligations concerning employers and employees and the prohibited grounds for dismissal. Termination of an employment contracts on arbitrary or minor grounds would still not be allowed. 

According to the working group’s report, the amendments that have been prepared could also clarify termination of employment in situations such as the following:

• An employee’s earlier behaviour has been reprehensible and a new violation indicates similar indifference in respect of compliance with obligations related to the employment relationship.
• An employee’s violations that are minor in nature occur repeatedly.
• An employee’s underperformance in the work is permanent in nature. 

In addition, an employer would no longer have the obligation to explore the possibility of offering another job to the employee. Situations where employees’ working capacity changes in a way that they can no longer cope with their tasks due to long-term illness or a similar reason would form an exception to this.

Government proposal to be given in June

The draft proposal now circulated for comments has been prepared in a tripartite working group appointed by the Ministry of Economic Affairs and Employment. The working group was composed of representatives of the Confederation of Finnish Industries EK, the Federation of Finnish Enterprises, the Local Government and County Employers KT, the Office for the Government as Employer, the Central Organisation of Finnish Trade Unions SAK, the Finnish Confederation of Professionals STTK and the Confederation of Unions for Professional and Managerial Staff in Finland Akava, and a joint representative of the employee confederations. 

The working group was not unanimous. The Confederation of Finnish Industries EK, Federation of Finnish Enterprises and the Local Government and County Employers KT submitted supplementary opinions to the working group’s report. The Central Organisation of Finnish Trade Unions SAK, Finnish Confederation of Professionals STTK and Confederation of Unions for Professional and Managerial Staff in Finland Akava submitted a joint dissenting opinion.

The Ministry of Economic Affairs and Employment requests comments on the working group’s report to be submitted between 24 February and 7 April 2025. After that, the work will continue as part of official duties. The government proposal should be ready to be submitted to Parliament in June 2025.

According to the working group’s report, the acts should enter into force on 1 January 2026.

Inquiries:
Nico Steiner, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 295 049 001