Employment law in Finland
Employment law in Finland is governed by several key pieces of legislation, with the Employment Contracts Act (the main legal framework) being one of the most important. Finnish labor law is known for providing strong protections for employees, and Finland is recognized for its comprehensive social security system and fair work practices. Below is a summary of the key aspects of employment law in Finland:
1. Employment Contracts
Written Contracts: In Finland, it is mandatory for an employer to provide a written employment contract when an employee is hired. This contract should outline key terms such as job description, working hours, salary, and the duration of the contract. While most contracts are for indefinite periods, fixed-term contracts can also be used for specific, temporary work.
Types of Contracts:
Indefinite-term contracts (permanent employment) are the most common.
Fixed-term contracts must be for a valid reason (e.g., a specific project, seasonal work) and are limited to a fixed duration or specific project.
Probation Period: Employment contracts may include a probation period, typically up to 6 months. During this period, both the employer and employee have the right to terminate the contract with a shorter notice period (usually 14 days).
2. Working Hours
Standard Working Hours: The standard workweek in Finland is 40 hours (usually 8 hours per day). However, collective agreements or individual contracts can sometimes modify these hours.
Overtime: Overtime is defined as work exceeding the standard working hours, and it is generally paid at a higher rate:
1.5x the regular wage for overtime during weekdays.
2x the regular wage for overtime on weekends or public holidays.
Overtime must be agreed upon between the employer and employee and cannot exceed 250 hours per year.
3. Minimum Wage
Minimum Wage: Finland does not have a national minimum wage. Instead, wages are usually determined through collective agreements that apply to specific sectors or industries. These agreements set wage floors for workers in various sectors.
Collective Bargaining: Unions play a significant role in setting wages and working conditions in Finland. Most employees are covered by collective agreements that establish minimum salary levels and other conditions.
4. Vacation and Leave
Annual Leave: Employees are entitled to a minimum of 30 calendar days (about 4 weeks or 5 working days per week) of paid annual leave. The exact amount can vary depending on the employment contract and collective agreements.
Sick Leave: Employees are entitled to paid sick leave. For the first 9 days, the employer pays the employee’s salary (subject to the employment contract), and after that, the Finnish social insurance system (KELA) provides sick benefits.
Public Holidays: Finland recognizes several public holidays. If an employee works on a public holiday, they are entitled to double pay or compensatory time off, depending on the employment contract.
5. Maternity and Paternity Leave
Maternity Leave: Female employees are entitled to 105 working days (about 4 months) of paid maternity leave. The leave can be taken up to 50 days before the expected birth date. Maternity benefits are paid by the Finnish social insurance system (KELA), typically at a percentage of the employee’s salary.
Paternity Leave: Fathers are entitled to 54 working days of paternity leave, which can be taken until the child is 2 years old. Paternity benefits are also paid by KELA and are typically based on the father’s earnings.
Parental Leave: In addition to maternity and paternity leave, parents are entitled to parental leave after the birth of a child, which can be taken until the child turns 3 years old.
6. Social Security and Benefits
Social Security Contributions: Both employees and employers contribute to Finland’s social security system. This system covers various benefits, including pensions, unemployment insurance, health insurance, and family benefits.
Health Insurance: Employers are responsible for providing employees with health insurance, which is a mandatory requirement in Finland. KELA also provides access to public healthcare services for all residents.
Unemployment Insurance: Employees in Finland are covered by unemployment insurance, which provides financial assistance in the event of job loss. Benefits are paid by the Finnish Unemployment Insurance Fund (TYEL).
7. Termination of Employment
Notice Period: The notice period for terminating an employment contract depends on the length of employment:
Less than 1 year: 14 days
1–4 years: 1 month
4–8 years: 2 months
More than 8 years: 3 months
Termination by Employer: Employers can terminate an employee’s contract for various reasons, including redundancy, misconduct, or performance issues. However, the employer must provide just cause for dismissal and follow proper procedures.
Termination by Employee: Employees can resign by providing the required notice as stated in the employment contract or based on the legal notice period.
Severance Pay: Employees may be entitled to severance pay if they are dismissed without cause. The amount depends on the employee’s length of service and the terms of the employment contract.
8. Non-Discrimination and Equal Treatment
Finnish law prohibits discrimination in the workplace based on gender, age, sexual orientation, religion, disability, and other protected characteristics. Equal treatment is ensured through various laws, including the Equality Act and the Non-Discrimination Act.
Equal Pay: The principle of equal pay for equal work is enshrined in Finnish law, and employers must ensure that employees doing similar work are paid fairly and equally.
9. Workplace Health and Safety
Employers are required to provide a safe and healthy working environment. The Finnish Occupational Safety and Health Act outlines the duties of employers to prevent workplace accidents and injuries and to provide employees with proper training, protective equipment, and a safe workplace.
Employees also have the right to participate in health and safety discussions and raise concerns about unsafe working conditions.
10. Collective Bargaining and Unions
Trade Unions: Trade unions play a significant role in Finland’s labor market. Many employees are union members, and unions negotiate collective agreements on behalf of workers. These agreements cover various issues, including wages, working conditions, and benefits.
Collective Agreements: These agreements are legally binding, and they often apply to specific industries or professions. They set minimum standards for wages, working hours, and conditions, and they may also provide additional benefits beyond the statutory minimum.
11. Remote Work and Flexibility
Remote Work: Remote working arrangements have become more common in Finland, especially after the COVID-19 pandemic. There is no specific legal framework for remote work, but employers and employees are encouraged to negotiate flexible work arrangements, ensuring that they comply with general employment laws such as working hours and health and safety regulations.
Work-Life Balance: Finland places a strong emphasis on work-life balance, and employees enjoy flexible working arrangements, especially for parents or caregivers.
12. Foreign Workers
Work Permits: EU citizens can work in Finland without a work permit, while non-EU citizens must apply for a work permit. The work permit application process depends on the nature of the job and the worker’s qualifications.
Foreign workers are entitled to the same employment rights as Finnish employees, including working conditions, wages, and social security benefits, once they are legally employed in the country.
Conclusion
Finland's employment law provides comprehensive protections for employees, ensuring fair wages, safe working conditions, and a strong social safety net. The country’s legal framework also places a strong emphasis on equal treatment, non-discrimination, and work-life balance. Finnish workers benefit from a robust system of paid leave, social security, and collective bargaining, which contributes to high levels of employee welfare.
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