The employer can dismiss the employee only if there are relevant and weighty grounds for dismissal. The employer must always explain the termination reason to the employee.

Change negotiations refer to a procedure in which the employer and employees jointly discuss significant changes occurring in the workplace. These negotiations can lead to part-time arrangements, lay-offs or dismissals.

By virtue of the Employment Contracts Act (55/2001), an employer can, by unilateral declaration, reduce the working hours as agreed on in an employee’s employment contract to a part-time arrangement. In this case, however, the employer has an obligation to offer any extra hours available to the part-time employee. If the part-time work has been imposed unilaterally by the employer, it is possible to receive an adjusted earnings-related daily allowance during the part-time arrangement. The payment of the adjusted unemployment benefit requires registration as a jobseeker with the TE Office, even while you are working within the employment relationship. However, in order to qualify for the benefit, you must be actively seeking a full-time job

A lay-off may be either part-time or full-time. As in the case of a part-time arrangement, it is a good idea to register as a full-time jobseeker with the TE Office immediately on the first day of the lay-off. Both work and salary payments are interrupted during a lay-off. You can, however, work elsewhere while laid off. Any fringe benefits attached to your employment relationship will also be interrupted during the lay-off. If the lay-off lasts a minimum of 200 calendar days, the employee has the right to terminate the employment relationship without a period of notice and to receive compensation equivalent to their pay for the period of notice.

The employer can dismiss the employee only if there are relevant and weighty grounds for dismissal. The employer must always explain the termination reason to the employee. An employment contract cannot be terminated if the employee can be reassigned or trained for another position. The reassignment obligation is valid for the entire period of notice and concerns all such work that the dismissed employee is capable of performing immediately or after a reasonable amount of training.

If, within four months of an employee’s dismissal, the employer ends up needing new employees for the same or similar work that the dismissed employee had been doing, the employer must offer the work to this former employee as long as the employee is still registered as seeking work via the TE Office. However, if the employment relationship has lasted without interruption for at least 12 years prior to dismissal, the re-employment period shall be six months.

Transition security is a benefit that includes a paid employment leave, employment plan and occupational health care. An employer shall offer dismissed employees the opportunity to participate in coaching or training paid for by the employer for the purpose of promoting employment, provided that the company regularly employs at least 30 persons and the employees have been employed by the employer for at least five consecutive years before the end of the employment relationship. An employer who has failed to comply with this statutory obligation, is obliged to paid the employee a lump sum compensation equivalent to the value of the training or coaching.

The maximum length of the employment leave is a total of five working days if the period of notice is less than one month. If the period of notice is 1–4 months, the maximum length of the employment leave is a total of ten working days, and if the period of notice exceeds four months, the maximum length is a maximum total of 20 working days. If the employee is aged 55 or over at the moment of dismissal, the employment leave is 15/25 working days (respectively).

If the employee is dismissed on financial or production-related grounds, the employer has an obligation to continue to provide occupational health care for six months after the obligation to work ends. This obligation concerns employers who regularly employ at least 30 people.  Another requirement is that the employee’s employment relationship has lasted at least five years. During a part-time work arrangement or lay-off, the employee is entitled to the minimum statutory occupational health care.

Persons over the age of 55 who have worked for the same employer for at least five years have an extended right to transition security. The extended transition security includes the right to transition security training corresponding to two months’ salary and arranged by the TE Office, the right to a transition security allowance corresponding to one month’s salary, the right to a longer employment leave during the period of notice, and the right to reduced working hours if you have worked for the same employer for at least 3 years. Remember to register as a jobseeker with the TE Office within 60 days in order to receive transition security.

The earnings-related daily allowance is generally paid for a maximum of 300–500 days. Some employees may be eligible for additional days of unemployment allowance after the maximum period of the basic unemployment allowance has been reached. The additional days of unemployment allowance will continue at the most until the end of the calendar month in which the employee reaches the age of 65. The right to additional days is being abolished gradually with the result that those born after 1964 will no longer have this right.

If you become unemployed or laid off

Remember to register with the TE Office on the first day of unemployment or lay-off, at the latest, via, for example, työmarkkinatori.fi/en. The right to unemployment benefits is considered to begin from the day on which you register as a jobseeker. You must be registered as a jobseeker for the specified waiting period to elapse and the daily allowance to be paid. The earnings-related unemployment allowance is paid by an unemployment fund on the basis of an application.

Apply for the daily allowance retroactively for each one-month or four-week period. Your first application can be sent, however, already after two weeks if you are unemployed or fully laid off. The unemployment fund for ASIA members is the KOKO fund found online at kokokassa.fi/en.

Text Heikki Kähkönen, Labour Law Advisor at ASIA.

The article is available also on the ASIA membership magazine 1/2024.

More information

Employment related legal services for ASIA members