Pro’s Head of Legal Services, Patrik Stenholm, answers frequently asked questions about fixed-term employment contracts. The government’s controversial proposal to relax the rules on fixed-term employment contracts is moving through Parliament towards becoming law. Some amendments have been made to the original bill.
What will change in fixed-term employment contracts?
An employer would be able to offer a fixed-term employment contract without a valid reason if it is the first employment relationship between the employer and the employee within the five years preceding the conclusion of the contract. In such cases, the maximum duration of the contract would be one year.
The employer would also be obliged to offer work if a fixed-term employment contract concluded without a valid reason is coming to an end and the employer is considering hiring additional employees for the same or a similar role.
The obligation to offer work would continue for a period following the end of the employment contract corresponding to one-third of the total duration of the employment contracts concluded with the employee.
How many consecutive fixed-term employment contracts can be entered into?
The Employment Contracts Act does not specify a maximum number of fixed-term employment contracts. Repeated fixed-term employment contracts may not be used if their number, combined duration or the overall pattern they form indicates that the employer’s labour needs are permanent. There are no changes planned to this.
However, without a valid reason, a fixed-term employment contract may be concluded for a maximum of one year.
An exception would be a fixed-term employment contract concluded with a long-term unemployed person, which could be renewed a maximum of twice from the start of the first employment relationship. The total duration of fixed-term employment contracts for long-term unemployed persons should not exceed one year.
Can an employer choose not to renew the contract without cause?
No. The employer would be obliged to provide the employee with a reasoned explanation regarding the possibility of continuing the employment relationship under a permanent employment contract or, for a justified reason, under a fixed-term employment contract. At the employee’s request, the explanation must be provided in writing no later than one month after the request.
If the explanation is not provided despite the request, the employee may contact a trade union or the occupational safety and health authority (the Finnish Labour Inspectorate).
Should I tell my employer I’m pregnant if I’m on fixed-term employment?
You do not have to tell your employer about your pregnancy. If you do tell them, you must not be placed at a disadvantage as a result. If the work is physically demanding or involves chemical hazards or other safety risks, you should inform your employer of your pregnancy. The employer has a broad duty to ensure the safety of employees.
An employer must not decide whether to renew a fixed-term employment contract on discriminatory grounds.
Can I terminate fixed-term employment myself if I get a permanent position elsewhere?
As a general rule, fixed-term employment contracts can only be terminated if they include a termination clause.
However, if a fixed-term employment contract has lasted for more than five years, it may be terminated in the same way as a permanent employment contract.
A new feature of the law would be that both the employee and the employer may, after six months, terminate a fixed-term employment contract concluded in accordance with Chapter 1, Section 3(3) of the Employment Contracts Act without a valid reason.
What should you check in an employment contract before signing it?
The employer’s name and business ID, the employee’s main duties, working hours, the determination of annual leave entitlement, the notice period or the basis for its determination. The collective agreement applicable to the work, the basis for determining pay and other remuneration, such as any fringe benefits, as well as the pay period, place of work and start date.
It is also advisable to check the end date of a fixed-term employment contract or its estimated end date, as well as the grounds for the fixed-term nature of the employment contract.
Do I accrue holiday entitlement and other benefits as normal, even if I am employed on a fixed-term basis?
Yes. If the employer and employee have entered into several consecutive fixed-term employment contracts, either without interruption or with only short-term interruptions, the employment relationship is deemed to have continued as a single, uninterrupted period for the purposes of determining employment benefits. In such cases, employment benefits dependent on the duration of the employment relationship, such as annual leave, accrue as if the employment relationship were permanent.
Does a fixed-term employment relationship become permanent at some point?
If, for a valid reason, the circumstances of a fixed-term employment relationship change in such a way that the justification for the fixed-term contract no longer exists, and it is agreed that the employment relationship will continue or it is tacitly allowed to continue, the employment relationship becomes permanent.
If the number of fixed-term employment contracts, their combined duration or the overall nature of the arrangement indicates that the employer’s labour needs are permanent, repeated fixed-term contracts may not be used; instead, the contract must be regarded as valid until further notice.
When can we expect the first court rulings and precedents regarding these legislative changes?
The Act is expected to come into force in the coming months.
Any legal disputes relating to the amendments to the Employment Contracts Act will be dealt with in due course by the general courts. Proceedings in the District Court usually take 1–2 years. The same applies in the Court of Appeal if the judgment is appealed. If leave to appeal is sought from the Supreme Court against the Court of Appeal’s judgment and is granted, it will take a further 1–1.5 years to obtain a final decision.
It can therefore be estimated that obtaining a precedent may take anywhere from five to ten years or more.
Working life is a team effort, not a solo act
If you have any questions about fixed-term employment contracts, please contact Pro’s Work Life Counselling.
As a Pro´s member, you are not alone in the face of change; you have the strength of numbers on your side.
