Consultation round begins on changes to fixed-term employment contracts, notice period of layoffs and re-employment obligation
The Ministry of Economic Affairs and Employment is organising a consultation round from 2 June to 28 July 2025 on legislative amendments to the grounds for fixed-term employment contracts, the duration of the notice period for layoffs and the re-employment obligation of employers. The proposed amendments have been prepared in a tripartite working group that was not unanimous in its work.
The Government has reformed the employment legislation to remove barriers to employment and, in particular, to strengthen the operating conditions of small and medium-sized companies.
Fixed-term employment contract could be concluded without a justified reason with employees hired by the employer for the first time
The working group proposes that in future it would be possible to conclude a fixed-term employment contract without a justified reason in cases concerning the first employment contract between an employer and an employee. Moreover, a fixed-term contract could be concluded without a justified reason if the employee had been employed by the same employer more than five years ago.
A fixed-term contract could be concluded for a maximum of one year without a justified reason. The contract could be renewed up to two times during the year following the conclusion of the first fixed-term employment contract. In total, a maximum of three fixed-term employment contracts could be concluded without a justified reason. The combined total duration of the contracts could not, however, exceed one year.
At the end of the fixed-term employment contract, the employer would be required to give the employee a reasoned explanation of the possibility to hire the employee for an employment relationship of indefinite duration or for a fixed-term employment relationship concluded for a justified reason. The requirement to provide an explanation to the employee aims to prevent possible abuses of fixed-term contracts concluded without a justified reason, especially in situations related to pregnancy or family leave.
The employee and the employer would have the right to terminate a fixed-term employment contract concluded without a justified reason that has lasted for at least six months.
Notice period for layoffs would be shortened to seven days
Under the current Act, the employer must give an employee a personal notice of layoff no later than 14 days before the layoff begins. In addition, collective agreements may specify a notice period of 14 days in accordance with the Act or longer.
As per the working group’s report, the notice period laid down in the Act would be shortened to seven days. The possibility of local collective bargaining would also be added to the Act. The employer and the representative of the employees, or if no such representative has been selected, the employees or a group of employees together, could agree to observe the seven-day notice period instead of the longer notice period included in the collective agreement.
Re-employment obligation would only apply to employers with at least 50 employees
The re-employment obligation refers to a situation where an employer needs employees for the same or similar tasks for which the employer has dismissed an employee four months earlier for financial or production-related reasons. If the dismissed employee is a jobseeker, the employer is required to offer the employee the work in question. However, the obligation to re-employ is six months for employment relationships that have lasted at least 12 years.
The working group proposes that in future the re-employment obligation would only apply to employers with at least 50 employees.
Aim is to submit a government proposal in early autumn 2025
The proposed amendments, which are now being circulated for comments, are based on the Government Programme. The tripartite working group that prepared the legislative amendments was not unanimous in its work. Dissenting opinions were submitted by the Confederation of Finnish Industries EK and the Local Government and County Employers KT, the Federation of Finnish Enterprises as well as the employee confederations the Central Organisation of Finnish Trade Unions SAK, the Confederation of Unions for Professional and Managerial Staff in Finland Akava and the Finnish Confederation of Professionals STTK.
The Government plans to submit its proposal to Parliament in early autumn 2025. According to the working group’s report, the legislative amendments would enter into force on 1 January 2026.
Inquiries:
Jaakko Aromaa, Special Adviser to the Minister of Employment, tel. +358 295 047 110
Elli Nieminen, Chief Specialist, Ministry of Economic Affairs and Employment, tel. +358 295 047 056 (available for comments from 13 June 2025)
Katariina Jämsén, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 295 047 143 (available for comments 2−12 June 2025)