A fixed-term employment contract can now be made without a justified reason

The Parliament of Finland has approved the government's legislative proposal introducing changes that make it easier to conclude fixed-term employment contracts, shorten the notice period for lay-offs, and limit the obligation to re-employ dismissed employees to employers with at least 50 employees. The changes entered into force on 1 June 2026.

Fixed-term employment contracts no longer require a justified reason.

Going forward, employers can contract an employee for up to one year without a justified reason in two scenarios: if there has been no previous employment contract between the employer and the employee in question or if more than five years have passed since the most recent employment contract between them. 

Employers can conclude a single fixed-term employment contract of up to one year with each employee.

Both parties have the right to terminate a fixed-term employment contract concluded without a justified reason at any time after the first six months. Termination needs to be justified and effected in the same manner as with permanent employment contracts.

Although fixed-term employment contracts can be concluded without a specific reason, concluding one on discriminatory grounds is not allowed. Such a fixed-term employment contract made contrary to the conditions stated in the law must, by law, be regarded as valid until further notice.

The law reform also imposes certain obligations on employers who contract employees on a fixed-term basis without a justified reason. For example, employers are required to consider, before the expiry of each fixed-term employment concluded without a justified reason, the possibility of hiring the employee on a permanent basis or giving them a fixed-term employment contract with a justified reason. Employees have the right to request a written record of this assessment.

In addition, employers are required to offer work to employees whose fixed-term employment contract concluded without a justified reason is about to end. This applies, firstly, if the employer is looking to hire a new employee that would increase the total number of people employed by them. Secondly, the new position needs to be exactly the same or very similar to the job that the fixed-term employee was performing.

If both these conditions are satisfied, the employer has to give the position to the fixed-term employee even if more qualified candidates applied for the position. The fixed-term employee does not, however, have priority over other applicants who are already employed by the employer.

The obligation to offer work lasts for a period corresponding to one third of the total duration of the fixed-term employee’s contract, starting from the end of the employment relationship. In practice, the employer needs to notify their former employee if work becomes available during this period.

The employee has two weeks to respond before the position can be offered to someone else. The obligation to offer work does not apply if the contract is cancelled during the probation period, if the employer terminates the employment contract or if the contract is dissolved. 

The notice period for lay-offs is shortened

The new law halves the notice period for lay-offs. Employees need to be notified of a lay-off no later than seven days in advance. If a longer notice period has been stipulated in the applicable collective agreement, employers can agree with the relevant shop steward, employee representative or other representative of their employees to apply the seven-day notice period locally. Such agreements need to be in writing, and they would override the terms of the collective agreement. 

The re-employment obligation no longer applies to all employers

The obligation to re-employ dismissed employees only applies to employers with at least 50 regular staff. In practice, smaller employers are no longer required to re-employ people whom they have dismissed for financial or production-related reasons.