Finnish Employment Law for Expats: Collective Agreements, Notice & Termination (2026)

Finland is the country where foreign employers most reliably get the basics wrong, and the reason is structural. There is no minimum wage act to look up, no single rulebook of pay rates, and no central registry you can query by job title. Instead there is a layered system: a thin statutory floor in the Employment Contracts Act (työsopimuslaki 55/2001), a much thicker floor in sectoral collective agreements, and a 2025–2026 wave of reforms that has been quietly moving the line between the two.

For the professional arriving in Helsinki, Tampere or Oulu, the practical consequence is that your employment contract is the least informative document in the pile. The collective agreement behind it determines your minimum pay, your overtime multipliers, your holiday bonus, how long you are paid when sick, and in many sectors a longer notice period than the statute gives. For the employer, the consequence is that compliance is sector-specific and cannot be solved once centrally.

This article covers the employment relationship itself — terms, hours, leave, discipline, dismissal and data. Immigration sits upstream of all of it, so if the right to work is not yet settled, start with the Finnish work visa and residence permit routes for expats before negotiating anything.

Why does Finland have no statutory minimum wage, and what sets the pay floor instead?

The Finnish position is deliberate, not an oversight. The occupational safety and health administration states it flatly: there is no minimum wage law in Finland, and employer and employee may agree on how the work is compensated. Wage-setting was left to the labour market organisations, and it works because union density and collective agreement coverage are high enough that the agreements function as de facto legislation.

The mechanism that turns a private contract between confederations into a binding floor is yleissitovuus — general applicability. A board under the Ministry of Social Affairs and Health assesses whether a national collective agreement is representative of its sector. If it is confirmed as generally applicable, Chapter 2 of the Employment Contracts Act requires every employer in that sector to observe at least its terms, whether or not the employer belongs to the signatory employers’ association. The confirmed agreements are published on the public data network at Finlex.

That is why "we are not a member of any employers’ federation" is not a defence. A software company in Espoo that has never joined Teknologiateollisuus can still be bound by the technology industry agreement’s pay grades if its activity falls within the agreement’s scope.

What the 2026 agreements actually pay

The 2025–2027 bargaining round produced multi-year agreements with scheduled increases, which means the 2026 figures are already fixed and knowable. Two of the largest:

The technology industry settlement is worth roughly 8% across its whole term, taking average hourly earnings in the sector from EUR 17.87 at the start to EUR 19.30 at the end. Note the split: part of the increase is a general across-the-board rise, part is a pot distributed at company level. That second element is where a well-briefed employee negotiates and a passive one does not.

Local bargaining widened on 1 January 2025. Previously, deviating from a collective agreement locally generally required employers’ association membership or an elected shop steward. Now company-level agreement is open regardless of membership, with an elected employee representative able to act as counterparty where there is no shop steward. Mandatory statutory minimums still hold, and non-organised employers using local agreements must notify the occupational safety and health authority within a month — negligence can draw a fee of EUR 1,000 to EUR 10,000.

How do you work out which collective agreement binds your role?

Three steps, in this order.

• Identify the employer’s sector, not your job title. General applicability attaches to the employer’s field of activity. A controller at a food manufacturer and a controller at a bank sit under different agreements.
• Check the agreement’s own scope clause. Most Finnish agreements split by employee category: workers (työntekijät), salaried employees (toimihenkilöt) and senior salaried employees (ylemmät toimihenkilöt) are often covered by three separate texts negotiated by different unions. The technology industry has exactly this three-way split.
• Read the pay grade annex and the local-bargaining clauses. The grade determines your floor; the local-bargaining clauses determine how much of the agreement your employer can lawfully vary at workplace level.

Ask the employer in writing which collective agreement it applies. Chapter 2 of the Employment Contracts Act requires the applicable collective agreement to be named in the written statement of terms, so this is not an awkward question — it is a statutory entitlement. If the answer is "none applies", that is a meaningful answer too: senior specialist and management roles in some sectors genuinely sit outside collective agreement scope, and then your contract really is the whole deal.

What has to be in writing, and how long can probation run?

An employment contract in Finland can be oral, written or electronic, and all three are equally valid. What cannot be skipped is the written statement of the key terms of employment. The eight principal terms must be given within seven days of the work starting; the remaining particulars follow within one month. The only exclusion is work of at most three hours a week over four consecutive weeks. Failure to issue the statement is a punishable offence under the Employment Contracts Act, carrying a fine for the employer or its representative.

Probation (koeaika) is capped at six months. Two refinements matter in practice. First, on a fixed-term contract shorter than twelve months, probation may not exceed half the contract’s duration. Second, if the employee is absent during probation because of illness or family leave, the employer may extend the period correspondingly — but the extension has to be communicated before the original period ends, not afterwards. During probation either party can cancel with immediate effect, though the reason may not be discriminatory or otherwise improper.

Fixed-term contracts changed materially on 1 June 2026. The old rule was simple and strict: a fixed term needed a justified reason, and a chain of unjustified fixed terms converted into a permanent relationship. Now a fixed-term contract of up to one year can be concluded without any justified reason, provided it is the first employment relationship between the parties or at least five years have passed since the last one. After six months, either party may terminate it as if it were permanent. If the employer later recruits for the same or a similar role, it must first offer the job to the former fixed-term employee for a period equal to one third of the contract’s duration, and the employee has two weeks to respond. The employee can also request a written statement on the prospects of continuing in a permanent or justified fixed-term role, which the employer must provide within a month.

How much can you be made to work, and what is a working time bank worth?

The Working Hours Act that entered into force on 1 January 2020 sets regular working time at 8 hours a day and 40 hours a week. The ceiling that actually binds is different: an employee’s working time including overtime may not exceed an average of 48 hours a week over a four-month reference period. That replaced the old system of separate annual overtime maxima, and it is the number a compliance review should test.

Overtime requires the employee’s express consent each time it is worked — a blanket consent in the employment contract does not satisfy the Act. Statutory compensation is an increase of 50% for the first two overtime hours in a day and 100% thereafter, with weekly overtime at 50%; Sunday work carries double pay, calculated on basic salary and separate from overtime increases. Overtime can be taken as time off instead of money if both sides agree, at the same multiplier. Collective agreements frequently improve these rates and sometimes buy them out for senior salaried employees against a higher base salary — read the clause before assuming your unpaid late nights are lawful.

Rest entitlements are firm: at least 11 hours’ uninterrupted daily rest per 24-hour period and at least 35 hours’ uninterrupted weekly rest, normally including Sunday. A meal break of one hour (or 30 minutes by agreement) does not count as working time if the employee may leave the workplace.

Flexiwork and the working time bank

Two 2020 instruments are genuinely useful and still under-used by foreign employers. Flexiwork (joustotyöaika) permits a written agreement under which the employee independently decides the placement of at least half of the working time and where it is performed, with the employer defining tasks, targets and the overall volume of hours. It suits specialist and knowledge roles far better than conventional flexitime, and either party can bring it to an end.

The working time bank (työaikapankki) is now available at every workplace, independently of any collective agreement. Additional and overtime hours, flexitime balances (up to 60 hours over a four-month tracking period) and monetary benefits converted to time at the then-current pay rate can be deposited. The limits: no more than 180 hours may be accrued in a calendar year, and the balance may not exceed the employee’s regular working time for six months. Regular working hours, expense reimbursements and benefits already due for payment cannot be banked.

What do holiday, sick pay and family leave actually add up to?

Annual holiday runs on a credit year from 1 April to 31 March, not the calendar year — the single most common payroll error in a first Finnish year. Accrual is 2 days per month where employment has continued less than a year by the end of the credit year and 2.5 days per month thereafter, giving 24 or 30 holiday days. Saturdays count as holiday days, so 30 days is five weeks in practice. Twenty-four days must be given as summer holiday in the period from 2 May to 30 September; the remainder is winter holiday.

Family leave was rebuilt by the 2022 reform and the architecture is now simple. Kela pays pregnancy allowance for 40 days (Monday to Saturday), with leave starting 14 to 30 working days before the due date. Each parent then has 160 parental allowance days, of which up to 63 may be transferred to the other parent or another carer — 320 days in total for one child. The allowance is income-based: in 2026 the formula runs from a minimum of EUR 31.99 per working day up to EUR 106.74 plus a tapering percentage for incomes above EUR 45,744. Where the employer pays salary during the leave, Kela pays the allowance to the employer, which must apply separately. Child-care leave on top of that runs until the child turns three.

A note for employers budgeting a hire: the Kela reimbursement, the sick pay overhang and the holiday bonus are exactly the items that make the all-in cost of a Finnish employee diverge from the gross salary. The arithmetic is set out in our breakdown of the true cost of employing someone in Finland, and the contribution percentages behind it in the Finnish payroll, tax and social security guide for expats.

Can you be dismissed in Finland, and what changed on 1 January 2026?

Finland has never been a hire-and-fire jurisdiction and still is not, but the threshold moved in 2026 and the movement is real rather than cosmetic.

Personal grounds

Dismissal on grounds related to the employee required, for twenty-five years, an asiallinen ja painava syy — a proper and weighty reason. Effective 1 January 2026, the statutory test is a proper reason, and the assessment turns on whether termination is a reasonable consequence of the employee’s conduct. Three consequences follow:

• The warning requirement survives, but its threshold fell in parallel. A warning must still identify the conduct and state explicitly that recurrence risks termination. Dismissal without a prior warning remains possible only where the breach is so serious that continuing the relationship would be unreasonable.
• The duty to offer other work was abolished for most person-related dismissals. The exception is important: where the reason is declining work capacity through illness or disability, the employer must still look for alternative work.
• The lower threshold applies only to conduct occurring after 31 December 2025. Older misconduct is judged under the old, stricter test.

One trap for employers who assume the statute is the ceiling of their obligations: where a collective agreement independently requires a "proper and weighty" reason, that clause prevails over the lighter statutory wording. The reform did not rewrite collective agreements.

Financial and production-related grounds

Redundancy still requires that the work has diminished substantially and permanently, and the employer must examine redeployment and reasonable retraining before terminating. What changed on 1 June 2026 is the surrounding machinery: lay-off notice fell from 14 days to 7 (collective agreements may preserve 14, though employer and employee representatives may now agree in writing on seven days regardless), and the re-employment obligation applies only to employers regularly employing at least 50 people. Where it does apply, it runs for four months after termination, extended to six months where the employment had lasted at least twelve years, and covers jobseekers registered with the employment service.

Full salary and benefits run through the notice period whether or not the employee is required to work. Notice may not exceed six months even by agreement, and the employee’s notice may never be longer than the employer’s — a clause that tries to lock a specialist in for twelve months while the employer can leave in one is unenforceable to that extent.

What happens in change negotiations, and what do they cost to get wrong?

The Act on Co-operation within Undertakings (1333/2021) governs both routine information-sharing and restructuring. Since 1 July 2025 it applies in full to employers regularly employing at least 50 people — up from 20. Employers with 20 to 49 employees are no longer in the full regime but must maintain workplace-specific practices for regular continuous dialogue, with no prescribed frequency; at 50 and above, continuous dialogue is held four times a year.

Change negotiations (muutosneuvottelut) must precede any decision to dismiss, lay off, convert to part-time or unilaterally change a material term of employment for financial or production-related reasons. The minimum negotiation periods were halved in the same reform, to seven days or three weeks depending on the subject matter and the number of employees affected. A board-level employee representation threshold cut from 150 to 100 employees has been prepared for 1 July 2026, with the government proposal scheduled for spring 2026 — confirm the position with the Ministry of Economic Affairs and Employment before relying on it.

What about non-competes, inventions, your data and the works council?

Non-competition agreements

Finland’s reform of 1 January 2022 ended free non-competes. A restraint still requires a particularly compelling reason connected to the employer’s operations or the employment relationship, may not exceed one year, and now carries mandatory compensation:

• restraint of up to six months: 40% of the employee’s salary for the corresponding period;
• restraint longer than six months: 60% of salary for the whole restraint period.

Compensation follows the normal pay cycle during the restraint period. The employer may terminate the non-compete while the employment continues, on notice equal to one third of the restraint period and at least two months — but not after the employee has given notice. The practical effect is that boilerplate non-competes in template contracts became expensive, and most employers have narrowed them to a genuinely small group.

Employee inventions and IP

The Act on the Right in Employee Inventions governs patentable inventions made by employees. The employee must notify the employer in writing without delay; the employer then has a statutory window to decide whether and to what extent it takes the rights; and where it does, the employee is entitled to reasonable compensation, assessed on the invention’s value, the employment terms and the employer’s contribution. Copyright in software and other works is treated separately and is usually assigned by contract, so the contract clause matters more there than the statute. Senior technical hires should check both clauses before signing: Finnish law does not treat invention compensation as something that can simply be waived in advance.

Data protection in the employment relationship

The Act on the Protection of Privacy in Working Life (759/2004) sits on top of the GDPR and is stricter in one decisive respect. The necessity requirement permits the employer to process only personal data directly necessary for the employment relationship, and — this is the part foreign employers misread — the employee’s consent cannot create an exception. Data should normally be collected from the employee. Drug test certificates, camera surveillance, technical monitoring and the handling of an employee’s email are each subject to specific conditions and, in workplaces within the co-operation regime, to a co-operation procedure before introduction. A global monitoring policy rolled out from headquarters is a standard source of findings here.

Representation and remedies

Employee representation is agreement-based rather than statutory in form. Where a collective agreement applies, employees elect a shop steward (luottamusmies) who represents all employees in the bargaining unit; non-unionised employees may additionally elect their own representative, and an elected representative can act where no shop steward exists. Occupational safety representatives sit alongside them.

Individual disputes — unlawful dismissal, unpaid wages, discrimination — go to the district court, with appeal to the Court of Appeal and, by leave, the Supreme Court. The Labour Court (työtuomioistuin) is a specialised court for disputes about the interpretation and breach of collective agreements, brought by the signatory organisations rather than by individuals; a union can take a member’s collective agreement point there. Compensation for unlawful termination runs from 3 to 24 months’ pay, set by the circumstances and the gravity of the breach, and notice-period pay and holiday compensation are claimed alongside it. The occupational safety and health authority supervises minimum terms and can be contacted before litigation — frequently the cheaper first move.

Employers building a Finnish entity or using an employer of record should map these obligations before the first offer letter rather than after the first dispute; the sequence is set out in our guide to employer compliance when hiring expats in Finland.

One reform to watch, not to plan around

The government’s programme includes making the first day of sick leave unpaid for absences shorter than five days, with exemptions for occupational accidents. As of October 2026 this has not entered into force: statutory sick pay still covers the day of falling ill plus the following nine working days. Employers writing 2027 policies should treat it as pending legislation, and employees should not accept a contract clause that implements it early — a term below the statutory floor is void.

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