Finnish employment law changes 2026: dismissal, lay-offs and fixed-term contracts
Published · Author: Palvemax OY
Finland’s Employment Contracts Act (työsopimuslaki) changed twice in 2026. Since 1 January 2026 an employee can be dismissed for a proper reason relating to them as a person, where the law used to require a proper and weighty reason. Since 1 June 2026 seven days’ notice is enough for a lay-off, a fixed-term contract can be made without a stated reason for up to a year, and the duty to re-employ dismissed staff applies only to employers with at least 50 employees.
Notice periods did not change: 14 days or one month when you resign, and from 14 days to six months when the employer gives notice. Below are all the changes with their sections and what they mean for employees.
- 1 Jan 2026
- a proper reason is enough for dismissal
- 7 days
- lay-off notice from 1 June 2026
- 1 year
- maximum fixed term without a reason
- 50
- employees: threshold for the re-employment duty
All the changes at a glance
| In force | What changed | Section |
|---|---|---|
| 1 Jan 2026 | A proper reason is enough for dismissal on personal grounds; it no longer has to be proper and weighty | ch. 7, s. 2 |
| 1 Jun 2026 | Lay-off notice cut from 14 to 7 days | ch. 5, s. 4 |
| 1 Jun 2026 | When a laid-off employee is dismissed, seven days of pay, previously 14, may be deducted from the notice-period wages | ch. 5, s. 7 |
| 1 Jun 2026 | Fixed-term contract without a stated reason, for up to a year | ch. 1, s. 3 |
| 1 Jun 2026 | Re-employment duty only for employers with at least 50 employees | ch. 6, s. 6 |
| no change | Notice periods, the warning requirement and compensation for unjustified dismissal (3 to 24 months’ pay) | 6:3, 7:2, 12:2 |
The changes came in two Acts: 1390/2025 on dismissal on personal grounds (HE 158/2025) and the June Act 412/2026 (HE 199/2025). Neither touches the notice periods.
Dismissal: a proper reason is enough
Since 1 January 2026 an employer may end an open-ended contract for a proper reason (asiallinen syy) relating to the employee as a person. The word “weighty” (painava) is gone from the Act. A proper reason includes breaching or neglecting the obligations of the employment, such as ignoring instructions, neglecting work, unjustified absence, inappropriate behaviour and carelessness, and a change in the conditions for doing the work so substantial that the employee can no longer cope with the job.
Not everything changed. The reason is still assessed as a whole, taking into account the employee’s position, the employer’s own conduct such as adequate instruction, and the number of staff. A breach of obligations calls for a warning first, unless it is so serious that the employer cannot reasonably be expected to continue the relationship. Illness or injury is not a ground unless working capacity has fallen substantially and for a long time, and an employer who dismisses without grounds still pays compensation of 3 to 24 months’ pay.
Transitional rule: if a dismissal rests only on conduct before 1 January 2026, the old and stricter rule applies to it.
Lay-offs: seven days’ notice
A lay-off (lomautus) suspends work and pay while the contract stays in force. Since 1 June 2026 the notice must be given at least seven days before the lay-off begins; previously it was 14 days. If the notice is given on Monday 5 October 2026, the lay-off can start on Monday 12 October 2026 at the earliest. The notice must state the reason, the start date and the length or expected length of the lay-off.
A collective agreement may still set a longer period, and many still say 14 days. The employer and the shop steward or another staff representative can then agree on seven days in writing.
- The notice is handed over in person. If that is not possible, a notice sent by letter or electronically counts as received on the seventh day after sending at the latest.
- If you are on annual leave or on time off of at least two weeks, a notice sent by letter or electronically counts as received no earlier than the day after your leave ends.
- During a lay-off you may resign without a notice period, except in the seven days before a known end date of the lay-off.
- If the employer dismisses you during a lay-off, you are paid your notice-period wages, less seven days of pay if the lay-off was announced with more than seven days of notice.
- If a lay-off has lasted without a break for at least 200 days and you resign, the notice-period wages are paid as compensation.
Fixed-term contracts without a reason
A fixed-term contract still needs a justified reason as a rule, such as cover for someone on leave or a project. Since 1 June 2026 no reason is needed if the employer and the employee have had no employment relationship in the previous five years. Such a contract may last at most one year.
- Before the term ends, the employer must give a reasoned account of whether the employment can continue on an open-ended contract or on a fixed-term one with a justified reason. On request it must be given in writing within a month.
- If the employer is considering hiring for the same or similar work when the term ends, the work must be offered to you. The duty lasts for a third of the length of the employment that ended, and if you do not reply within two weeks the work may be offered to others.
- Once the contract has lasted at least six months, either party may end it in the same way as an open-ended contract.
- If the employer makes such a contract against the conditions, it is treated as open-ended.
Re-employment duty only for employers with 50 or more staff
When an employee is dismissed on financial or production grounds, the employer must offer them work if it needs staff for the same or similar tasks within four months of the end of the employment, or six months if the employment had lasted at least 12 years. The duty applies only if the dismissed person has registered as a jobseeker. Since 1 June 2026 it applies only to an employer with at least 50 employees on a regular basis. A collective agreement may still provide otherwise.
Notice periods did not change
The notice period starts running on the day after notice is given. A period in days ends once the days have passed. A period in months ends on the same day of the month, or on the last day of a shorter month.
| Employment has lasted | Employer gives notice | Employee resigns |
|---|---|---|
| up to 1 year | 14 days | 14 days |
| over 1, up to 4 years | 1 month | 14 days |
| over 4, up to 5 years | 2 months | 14 days |
| over 5, up to 8 years | 2 months | 1 month |
| over 8, up to 12 years | 4 months | 1 month |
| over 12 years | 6 months | 1 month |
Example: the employment started on 1 February 2022 and notice is given on 15 October 2026. If you resign, the notice period is 14 days and your last working day is 29 October 2026. If the employer gives notice, the period is two months and the last day is 15 December 2026.
An employment contract or collective agreement may set a different period, up to six months. Normal pay continues through the notice period, and unused vacation days are paid as holiday compensation with your final pay.
If your residence permit is based on work
Since 11 June 2025, if the employment ends early, a holder of a work-based residence permit has three months to find a new job. Some, such as specialists and people who have been in Finland on a work-based permit for more than two years, have six months. If no new job is found and there is no other ground to stay, the permit may be cancelled.
The employer must notify the Finnish Immigration Service within 14 days if the employment of someone on a work-based permit ends early. While unemployed, you may take work in a sector with a national labour shortage on your current permit. If the new job is neither in such a sector nor in the field your permit was granted for, you need a new permit, and the work permit calculator shows its salary threshold.
Coming: pay transparency from 1 January 2027
On 9 July 2026 the government put forward a bill to implement the EU Pay Transparency Directive by amending the Equality Act. Under the bill, job applicants would be told the starting pay or its range in good time, and employees could ask in writing for the average pay of people doing the same work or work of equal value, broken down by gender. Employers with at least 100 staff would report their pay gaps. The changes are meant to take effect on 1 January 2027, and the bill is before Parliament.
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FAQ
What changed in Finnish employment law in 2026?
Since 1 January 2026 a proper reason is enough for dismissal on personal grounds. Since 1 June 2026 lay-off notice is seven days, a fixed-term contract can be made without a reason for up to a year if the parties have had no employment relationship for five years, and the re-employment duty applies only to employers with at least 50 employees. Notice periods did not change.
How much notice is needed for a lay-off?
Under the Act, since 1 June 2026, at least seven days before the lay-off begins; previously 14 days. A collective agreement may still require longer, often 14 days. A notice sent by letter or electronically counts as received on the seventh day after sending at the latest.
Did notice periods change in 2026?
No. An employee resigning gives 14 days, or one month after more than five years. An employer gives from 14 days to six months depending on the length of employment. The period starts on the day after notice is given.
What counts as a proper reason for dismissal?
For example breaching or neglecting work obligations, such as unjustified absence, ignoring instructions or inappropriate behaviour, or a substantial change in the conditions for doing the work. The reason is assessed as a whole, and a warning is usually required first.
Can a fixed-term contract be made without a reason?
Since 1 June 2026 it can, if the employer and the employee have had no employment relationship in the previous five years. The contract may last up to a year, and before it ends the employer must explain whether the employment can continue.
Does the re-employment duty apply to small firms?
Not any more. Since 1 June 2026 the duty to offer work to someone dismissed on financial or production grounds applies only to an employer with at least 50 employees on a regular basis. A collective agreement may provide otherwise.