In 2026, several important amendments to the Employment Contracts Act (Työsopimuslaki) came into force in Finland. Some of the amendments took effect on 1 January 2026, while others came into force on 1 June 2026. These changes affect the rules governing employee dismissal, fixed-term employment contracts, temporary lay-offs (lomautus), and the employer's obligation to rehire former employees.

Below is a brief overview of the changes and what they mean in practice.

1. Employee Dismissal: When Dismissal Became Easier

📅 Effective from: 1 January 2026.

Before 1 January 2026

To dismiss an employee for reasons related to their conduct or personal circumstances (henkilöön liittyvät irtisanomisperusteet), the employer had to have a proper and weighty reason (asiallinen ja painava syy).

From 1 January 2026

The law now requires only a proper reason (asiallinen syy). However, a dismissal must still be justified. Minor breaches of the employee's obligations are not sufficient grounds for dismissal.

As before, all circumstances of the individual case must be taken into account (kokonaisharkinta) before making a decision. In most cases, the employee must first receive a warning (varoitus) and be given an opportunity to correct their conduct.

Prohibited grounds for dismissal, such as discrimination based on health, political opinions, religion, or trade union activities, remain unchanged.

What does this mean in practice?

It has become easier to dismiss an employee for reasons related to their conduct or personal circumstances. However, this does not mean that an employee can be dismissed without sufficient grounds. Finnish law continues to protect employees against unjustified and discriminatory dismissals.

2. Fixed-Term Employment Contracts: New Rules

📅 Effective from: 1 June 2026.

Before 1 June 2026

A fixed-term employment contract (määräaikainen työsopimus) could only be concluded if there was a justified reason (perusteltu syy), for example, to replace an employee who was temporarily absent.

From 1 June 2026

In certain situations, a fixed-term contract may now be concluded without a justified reason (ilman perusteltua syytä). This is possible if:

• it is the first employment relationship between the employer and the employee; or
• at least five years have passed since their previous employment relationship ended.

The maximum duration of such a contract is one year.

If a fixed-term contract lasts for more than six months, either the employer or the employee may terminate it under the same rules that apply to permanent employment contracts (toistaiseksi voimassa oleva työsopimus).

Before the fixed-term contract expires, the employee has the right to request a written explanation from the employer regarding the possibility of continuing the employment relationship.

If, after the fixed-term contract ends, the employer plans to hire a new employee for the same or a similar position, the employer must first offer the position to the former employee.

This obligation remains in force for a period equal to one-third of the duration of the fixed-term contract. For example, if the contract lasted 9 months, the obligation continues for another 3 months after it ends. If the contract lasted 12 months, the obligation continues for 4 months.

If the employee does not respond to the job offer within two weeks, the employer may offer the position to another candidate.

What does this mean in practice?

Employers now have greater flexibility to conclude fixed-term employment contracts with new employees. At the same time, the law preserves additional safeguards for employees once such contracts come to an end.

3. Temporary Lay-Offs (Lomautus): Shorter Notice Period

📅 Effective from: 1 June 2026.

Before 1 June 2026

The employer was required to notify an employee of a temporary lay-off (lomautus) at least 14 days before it began.

From 1 June 2026

The minimum notice period has been reduced to 7 days.

If a collective agreement (työehtosopimus, TES) provides for a longer notice period, the employer cannot shorten it unilaterally. This is only possible through a written agreement with the employees' representative in cases provided for by law.

If personal delivery of the notice is not possible, it may be sent by post or electronically.

The notice must state the reason for the temporary lay-off, its start date, and its duration or estimated duration.

What does this mean in practice?

Previously, employees had to be notified of a temporary lay-off at least two weeks in advance. Now the minimum notice period is one week. However, if a collective agreement provides for a longer notice period, that provision remains applicable unless otherwise agreed in accordance with the law.

4. Re-employment of Former Employees: New Rules

📅 Effective from: 1 June 2026.

Before 1 June 2026

If an employee was dismissed for economic or production-related reasons (taloudelliset tai tuotannolliset perusteet), the employer was required to offer them re-employment if a vacancy for the same or a similar position became available within the period specified by law.

This obligation applied to all employers, regardless of the number of employees.

From 1 June 2026

This re-employment obligation (takaisinottovelvollisuus) now applies only to employers who regularly employ at least 50 employees.

For employers with fewer than 50 employees, the re-employment obligation has been abolished.

The re-employment periods themselves remain unchanged:

• 4 months after the end of the employment relationship;
• 6 months if the employee had worked continuously for the employer for at least 12 years.

What does this mean in practice?

If a company employs fewer than 50 people, it is no longer required to offer a vacant position to a former employee before hiring someone else after a dismissal for economic or production-related reasons.

For employers who regularly employ 50 or more employees, the re-employment rules remain unchanged.

5. Laws and Regulations: Key Sources

• Employment Contracts Act (Työsopimuslaki 55/2001)
• Act 1390/2025 – amendments effective from 1 January 2026 (Laki työsopimuslain 7 luvun muuttamisesta 1390/2025)
• Act 412/2026 – amendments effective from 1 June 2026 (Laki työsopimuslain muuttamisesta 412/2026)
• List of Key Finnish Employment Laws and Regulations

Please note: This article is intended for informational purposes only and provides a general overview of the main legislative changes. In individual cases, specific provisions of the law, applicable collective agreements, or the terms of the employment contract may also apply.

Published: 10 August 2026 • FINREPO