Skip to main content

Employment relationship

Employment relationship

When an employer and employee sign a work contract, an employment relationship is created. Minimum terms and conditions of employment are based on laws and collective agreements. Both sides, the employer and the employee, also have rights and obligations during and after the employment relationship.

Employment contract, working time and work-related travel
Mies kättelee naista pöydän yli
Employment contract

The terms and conditions of employment and work are agreed upon in the employment contract. It determines the pay, working hours and the main tasks to be performed, for example. The employment contract may be valid until further notice or for a fixed term.

Kiire, kellosta aikaa
Working time

Working hours refers to the time spent on work and the time that you are obliged to spend at the workplace at the employer’s disposal. The provisions and regulations concerning working hours can be found mainly in your sector’s collective agreement and the Working Time Act. 

Kuva: Shutterstock
Business trip

A business trip is normally travel undertaken by an employee on a temporary basis in order to carry out their duties at a specific place of work. The employer’s obligation to reimburse the costs of business trips and to pay daily allowances is usually based on the provisions of collective agreements.

Probationary period and traineeship
Kuva: Shutterstock
Probationary period

A probationary period is a separately agreed period starting from the start of work, during which the employer has the opportunity to examine your professional skills and your suitability for the job and the work community. For your part, you can find out whether the work and working conditions correspond to the impression you got when you signed the employment contract. 

Nuori iloinen nainen, työntekijä steriileissä vaatteissa, joilla on tabletti ja hymyilee kameralle lähellä tehtaan tuotantolinjaa.

During traineeship, you can apply the theory you have learned at school in work and network with employers in your future sector while studying. A traineeship must be paid for. In particular, students at polytechnics and universities should sign an employment contract for their traineeship.

Lay off, cooperation and termination of employment

Layoff means an employer’s unilateral decision to temporarily suspend pay and work while the employment relationship continues. It can be realised by reducing daily or weekly working hours or by laying off a person full time. A layoff can last either for a predetermined period or indefinitely.

Kuva: Shutterstock
Co-operation negotiations

Cooperation is a procedure between an employer and employee that addresses issues related to employee’s rights and obligations. Before deciding on matters requiring co-operation negotiations, the employer must consult the employees. In some cases, however, it is enough to simply inform the workers.

Kuva: Shutterstock
Termination of employment

An employment relationship can end due to a fixed term, dismissal, termination or, in special circumstances, that the employment is considered terminated. Both the employee and the employer can terminate the employment relationship when there are legal grounds for termination.

Aikuinen mies on iloinen, juhlii
Are you going to a job interview?
Our career services can help you to get a better a deal.
Different forms of employment

The employment contract is made either permanently (for an indefinite period), or for a fixed term. Usually, work is carried out in a permanent employment relationship. A permanent employment contract often ends only through a notice of dismissal and only rarely through termination of an employment contract. An employment contract may not be dismissed or terminated without a legal reason.

A fixed-term employment contract can be made only if there are reasonable grounds for doing so, such as temporary work due to the absence of another employee. A fixed-term employment contract must specify the reason for the fixed term and the duration of the employment. The main rule of the Employment Contracts Act is that work is carried out in permanent employment.

If the employment contract is for a fixed term, the employee cannot be dismissed before the term ends. Neither can the employee resign before the fixed-term employment contract ends. However, this can usually be agreed between the employee and the employer. If a probationary period has been agreed upon separately in the employment contract, the contract can be terminated during the probationary period regardless of the fixed term.

Part-time work is a shorter form of work than full-time work. The interests of part-time employees must not be inferior to those of full-time employees. However, benefits can be proportional to working hours. If there is a need to increase the workforce of a workplace, work must be offered primarily to the part-time employees seeking full-time work.

As a member of the unemployment fund, a part-time employee can also accrue the previous employment requirement for earnings-related daily allowance. After becoming unemployed, members receive earnings-related daily allowance if they have fulfilled the employment requirement during their membership and paid membership fees for when they were employed.

If you are in temporary agency work, you will, in principle, be subject to the same rules as other employment relationships. According to the law, temporary agency workers are treated on an equal footing with other workers. However, temporary agency work is often hampered by both the employers’ and employees’ poor knowledge of the responsibilities and standards related to employment.

As a temporary agency worker, you have signed an employment contract with a temporary employment agency, which is also your employer. The temporary employment agency also pays your wages and assumes all other obligations of the employer. Remember to always sign your employment contract in writing. However, you work for a user company that buys your work input from the temporary employment agency. The user company guides, trains and instructs you in your work.

In problems related to temporary agency work, you should ask the shop steward or the occupational safety officer of either your company or the company using temporary agency work or your trade union for advice.

An employment contract in which the working hours of an employee during a given period vary according to work offered by the employer between the minimum and maximum hours set in the contract, is referred to in the Employment Contracts Act as a variable working hours contract. Variable working hours contracts also include working hours arrangements in which the employee undertakes to work for the employer when separately asked to do so.

Variable working hours contracts can be used only where the employer’s workforce needs genuinely vary. The employer cannot initiate that the minimum working hours set in the employment contract is lower than the employer’s need for a workforce. If the actual working hours during the preceding six months indicate that the agreed minimum working hours do not correspond to the employer’s actual workforce needs, the employer must, at the request of the employee, negotiate an adjustment of the working hours clause to reflect the actual need. The negotiations must be conducted within a reasonable time and the employee has the right to use an assistant in the negotiations.

At the beginning of the employment relationship, the employer must provide the employee with an explanation of the situations in which and the extent to which the employer’s need for a workforce arises. This information may be in the employment contract or in a separate statement.

Persons with a variable working hours contract are also entitled to sick pay and pay for the period of notice. When planning the roster, the employee must be given the opportunity to indicate to what extent and under what conditions they can accept work if the employer can offer more than the minimum contractual working hours. A zero-hour contract employee no longer has to agree to unlimited additional work.

Guide to working life

Puzzled by the working life? Find answers here.

Are you wondering how to proceed?

As a member you have our support.

Contact us, we are happy to help!

Join us today!

Access all benefits and services.

Membership includes earnings-related unemployment security.