Concluding an employment contract, and the minimum content of the contract
Benefits of a contract in writing
An employment contract in writing gives many benefits to both parties to the contract. The contract in writing can be used to prove what has been agreed upon. By using contract forms specially designed for the branch concerned, the parties can be sure that all terms required by law and having importance in the branch are included in the contract. A written contract gives the employee the message that the employer is a reliable contract party. This helps to maintain work motivation and improve commitment. When the employer uses an employment contract in writing, he or she does not have to give any other written information as required by law, or suffer the consequences of neglecting to give information.
Design of the content of an employment contract
When designing the content of an employment contract, the employer should have at least the following material available: the collective agreement for the branch concerned, Employment Contracts Act, Working Hours Act and Annual Holidays Act, as well as an employment contract form for the branch, or a general employment contract form.
- The content of the employment contract is affected at least by the following:
- the employer’s and the employee’s needs
- the provisions of the Employment Contracts Act defining which matters, as a minimum, should be agreed on
- the minimum terms set by the collective agreement for the branch – no contract can be concluded below that level
- the provisions of the Employment Contracts Act, Working Hours Act and Annual Holidays Act restricting the content of the employment contract
Information in writing
If there is no employment contract in writing, or the information mentioned below does not appear in the employment contract in writing, the employer shall without any separate request provide the employee with written information on the terms of the employment relationship. The information shall be given to the employee by the end of the first pay period. There is no need to give the information if the employment relationship for a fixed term will be shorter than one month.
If the same employer employs the same employee continuously for fixed terms shorter than one month under the same terms, the information shall be given within a month from the beginning of the first employment. There is no need to give the same information repeatedly if the terms do not change. If the terms for the employment relationship change, the employee shall be informed, in writing, of the new terms by the end of the pay period following the change.
Minimum content of a written employment contract or written information
- The written employment contract or the written information shall include at least the following:
- domicile or business location of the employer and the employee
- date of commencement of the work
- duration of a fixed-term employment contract and the ground for the fixed term
- trial period (when an agreement has been made on a trial period)
- place where the work is performed or, if the employee has no primary fixed workplace, an explanation of the principles according to which the employee will work in various work locations
- employee’s principal duties
- collective agreement applicable to the work
- ground for the determination of pay, and the pay period
- regular working hours
- manner of determining annual holiday
- period of notice and the grounds for determining it
- in the case of work performed abroad for a minimum period of one month, the duration of the work, the currency in which the monetary pay is to be paid, the monetary remunerations and fringe benefits applicable abroad, and the terms for the repatriation of the employee.
A model form for an employment contract in Finnish is printable from this link (PDF file, 58 kB) and in English (PDF file, 50 kB).
Duration of employment contract
Indefinite or fixed-term
It is always allowed to employ persons for indefinite periods that remain valid for the time being. If the employer aims to employ a person for a fixed term, the fixed term shall be agreed on and there have to be justified grounds for it. The grounds shall be indicated in the employment contract. Such grounds are, for example: acting as a substitute, seasonal work, fixed-term project, one-time work, training period in an educational institute, fixed term of a trainee contract, or some other factor that is connected to the operation or work of the enterprise and that requires fixed-term employment. If the employer cannot indicate any fixed-term purpose for the employment contract, the employment contract is considered to be valid for an indefinite time.
The purpose of a trial period is to find out the prerequisites for continuing the employment. This happens by going through a short trial period at the beginning of the employment relationship. An agreement has to be made on the trial period and its length. If the collective agreement to be applied requires a trial period for a certain time, the employer must inform the employee of the trial period when the employment contract is made. When no information has been given about this and the contract does not include a trial period, there is no trial period included in the employment relationship.
The trial period starts from the beginning of the employment relationship, and lasts uninterruptedly for the time period that has been agreed upon. The agreed trial period must not be prolonged. The maximum trial period is usually four months. If a fixed-term employment relationship is shorter than eight months, the trial period may not exceed half of the duration of the employment period. If the collective agreement to be applied by the employer restricts the duration of the trial period, the employer must not agree on a longer trial period.
Termination of an employment contract
Termination of employment, period of notice, and expiration of fixed-term employment contracts
Employment contracts made for an indefinite time are usually terminated by one of the parties giving notice. The notice will be followed by a period of notice agreed upon by the parties, or defined by the collective agreement or by law. During a trial period, either party may cancel the employment contract, in which case there will be no period of notice. Fixed-term employment contracts expire, without giving notice and without any period of notice, at the end of the fixed term, or when the agreed work is completed.
Protection against unjustified dismissal
The employer must not terminate an indefinitely valid employment contract without proper and weighty reason.
- Such reasons can be:
- serious breach or neglect of obligations of the employee, or such essential changes in the conditions necessary for working related to the employee’s person, or
- the work has diminished substantially and permanently for financial or production-related reasons, or for reasons arising from reorganisation of the employer’s operations.
Employees who have neglected their duties arising from the employment relationship shall not be given notice before they have been warned and given a chance to amend their conduct. Additionally, the employer shall, before giving notice, find out whether it is possible to avoid giving notice by placing the employee in other work.
If the work of employees has substantially and permanently diminished, they must not be given notice if they can be placed in, or trained for, other tasks by offering them work that is equivalent to that defined in their employment contracts. If no such work is available, they shall be offered other work equivalent to their training, professional skill or experience.
Illegal termination can become expensive
The employer shall, before giving notice, make sure that the giving of notice is based on facts and that its grounds fulfil the conditions for giving notice. The employer should ask for advice and help from their employer organisation. Employers that are not members of any employers’ organisation can also ask for help from the Occupational Safety and Health Inspectorate.
The Occupational Safety and Health Inspectorates do not resolve any disputes over termination of employment relationships. They can at most give their own opinion on the interpretation of the protection against unjustified dismissal in the case concerned, based on those facts that have been delivered to them. Only a court of justice can make a final decision that binds the parties, indicating whether the protection against unjustified dismissal has been complied with or violated.
Right to cancel the employment contract
It is possible, exceptionally, to terminate an employment contract by cancelling it, if one of the parties of the contract seriously neglects his or her duties or violates the employment contract. In such a case the employment contract is terminated with immediate effect without any period of notice. The right to cancel an employment contract requires such a weighty reason that it is unreasonable to expect that the person who cancels the contract should continue the contractual relationship for the period of notice.
Certificate of Employment
On request, when the employment relationship ends
On termination of the employment relationship, the employee is entitled to receive, on request, a written certificate of employment. The employee shall request the certificate from the employer. The employer is obliged to provide the employee with the certificate without delay, usually within one week of the request of the employee.
A model for a certificate of employment in Finnish can be printed on this link (PDF file: 62 kB).
Content of the certificate of employment
Before the employer writes the certificate of employment, there is reason to ask what matters the employee wishes to be mentioned in the certificate. The shortest certificate possible only informs of the duration of the employee’s employment relationship and the nature of the work duties.
Only at the specific request of the employee, the certificate shall include the reason for the termination of the employment relationship and an assessment of the employee’s working skills and behaviour.
The reason for the termination of the employment relationship does not refer to any detailed grounds for the termination or cancellation of the employment relationship. A certificate of employment shall only include a reference indicating who terminated the employment, and in what way. For example, the employment was terminated when the employee resigned. When the employer has given notice to the employee because the work has come to an end, or on grounds of some other financial or production-related reasons, this should be mentioned in the certificate. The reason for terminating an employment relationship should also be mentioned, if the employment has been terminated on the grounds of a fixed term that has expired, or because of some other reason relating to a fixed term.
If the employee only requests that the reason for the termination of his/her employment should be mentioned in the certificate of employment but does not request any assessment of his/her working skills and behaviour, the reason for the termination of the employment shall not be written in such a way that it contains an assessment on the employee’s working skills and behaviour.
New certificate of employment to correct faults and inaccuracies
The employer is obliged to issue a new, corrected certificate of employment if the certificate contains incorrect information. A corrected certificate shall also be given if the reason for terminating the employment is mentioned or an assessment on the working skills and behaviour of the employee is given in the certificate, even though the employee has not requested them. The same obligation is created if the employer has written such information in the certificate that, according to law, must not be mentioned in it.
Obligation to issue a certification remains for 10 years
On request, the employer is obliged to provide the employee with a certificate of employment within 10 years of termination of the employment relationship. A certificate on the employee’s working skills and behaviour shall, however, be requested within 5 years of termination of the employment relationship.
If more than 10 years have elapsed from termination of the employment, a certificate on the duration of the employment relationship and the nature of the work duties shall be given only if it does not cause the employer undue inconvenience.
Violation concerning the certificate of employment will be reported to the prosecutor
If an employer violates any provisions concerning the certificate of employment, a fine shall be imposed on the employer for violation of the Employment Contracts Act. If an employee has requested a certificate of employment from the employer but has not been provided with it, the employee may inform the Occupational Safety and Health Inspectorate of the violation. If the employer, after the Inspectorate’s request, still does not issue a certificate, the Inspectorate reports the violation to the public prosecutor.