Concluding an employment contract
Form and duration of employment contract
An employment contract may be made orally, in writing or in electronic format but it is recommended that the contract be made in writing.
An employment contract may be valid for an indefinite or fixed period of time. If an employment contract is made for a fixed term at the employer’s initiative, there must be a justified reason for it, such as a need for a substitute or seasonal worker. Only long-term unemployed people may be hired for fixed-term employment without a justified reason. Anyone who has been an unemployed job seeker continuously over the previous 12 months is regarded as being long-term unemployed. A fixed-term employment contract like that, covering at the most three periods, may last no longer than one year.
At the employee’s request, an employment contract may always be concluded on a fixed-term basis.
An employment contract may contain a provision on a trial period. The maximum length of a trial period is six months. Either party may cancel the employment contract during the trial period, notwithstanding the grounds for termination laid down in the Employment Contracts Act. The employer has the right to extend the trial period, if the employer has been absent from work for more than 30 calendar days due to incapacity for work or because of family leave.
Fixed-term employment contract
A fixed-term employment contract is binding on both the employer and the employee for the whole duration of the contract period. A fixed-term employment relationship terminates at the end of the agreed period or after the agreed work has been completed. During its validity, a fixed-term employment contract may only be terminated on cancellation grounds.
An account of the principal terms and conditions of work
The employer must provide a written account of the principal terms and conditions of work to the employee, if these are not laid down in a written employment contract. The terms and conditions include:
- date of commencement of the work
- duration of and basis for a fixed-term employment contract or specification that the fixed-term contract is concluded with a long-term unemployed person
- employee’s work tasks
- place of work
- grounds for determining pay and other remuneration
- working hours to be observed
- determination of annual holiday
- any right to training provided by the employer based on a statute, contract or practice
- insurance institution in which the employer has arranged the employee’s pension coverage or insured the employee against work-related accidents and occupational diseases
- period of notice or the grounds for determining it, and
- applicable collective agreement.
In variable hours contracts, temporary agency work and work carried out abroad for a minimum of one month, the employee must also be provided with certain additional information laid down in law.
Minimum wages and other minimum terms of employment applicable to employment relationships are regulated by industry-specific collective agreements. An employer belonging to an employers’ association must apply the collective agreement to its employees on the basis of the Collective Agreements Act.
National collective agreements deemed to have a representative scope of application are considered generally applicable. An employer that is not a member of the employers’ association must at least observe the provisions of a generally applicable collective agreement when its employees perform work that fall within the scope of application of the collective agreement.
An employer and an employee may always agree on terms of employment that are better than those laid down in the collective agreement.
If there are no collective agreements in the employer’s sector, the employer and the employee can agree on the remuneration paid to the employee between themselves. However, the pay clause in the employment contract must be reasonable. Finland does not have any law on minimum wages. Furthermore, there are no provisions in the Employment Contracts Act laying down specific euro amounts for the remuneration paid for work. It is, however, stated that the remuneration must be reasonable and normal.
Guidance and supervision of labour legislation: Occupational Safety and Health Administration (Osha)
Law-drafting: Tarja Kröger, tarja.kroger(at)gov.fi