Production and economic reasons can lead to lay-offs or dismissals of staff. Employment may also end for other reasons. At Job Market Finland you will find information on employee and employer negotiations, lay-offs, dismissals, and options regarding them.
If your company’s financial situation has deteriorated, laying off employees or ending their employment may be the first solutions that come to mind. However, you should familiarise yourself with the different options, especially when a difficult situation only seems temporary.
Using working hours arrangements, such as a work hours bank, you can regulate the working hours of your employees and create flexibility for seasonal work, for example. With working hours arrangements, you can have your employees work more in busy times and have them accumulate paid leave for a quieter period. Remember to take care of your employees’ wellbeing particularly well during busy times.
You may be able to avoid dismissal or lay-off of an employee by transferring annual leave. Remember to negotiate the transfer first with your employee.
You can develop your employees' skills in a changing work environment through complementary training. First, discuss with your employee whether they are interested in the training and the new tasks it enables.
Offering other available work before dismissing employees is an employer’s legal obligation. As an employer, you should always determine whether your company would have another possible job for the employee about to be dismissed. You should arrange training for a new position if it is reasonable for both you and your employee.
You can contact your local employment authority and get help with various employment-related matters through the Business E-services section of Job Market Finland.
You can find the employment authority's services for employers and entrepreneurs in the Business E-services.
If the organisation of your employees' working hours or additional training does not solve your company's difficult situation, you can avoid dismissals with lay-offs. In this case, the employee's work and payment of salary will end, but the employment relationship will continue.
In the lay-off process, your employee's work and payment of salary are temporarily interrupted, but your employment relationship does not end. Lay-offs can be either full-time or part-time. In part-time lay-offs, your employees only work part of their daily or weekly working hours.
As an employer, you can decide on the need for lay-offs unilaterally, but you can also agree on lay-offs together with your employee.
Depending on how many employees you employ, you may also need to arrange change negotiations in the event of a lay-off.
As an employer, you can lay off your employees either indefinitely or for a fixed term. You may lay an employee off on two different grounds.
You may lay off an employee for an indefinite period if you would have a financial or production-related reason to also dismiss the employee. The amount of work must have decreased substantially and permanently, and you must not be able to offer the employee any other work or training.
If your opportunity to offer work has been temporarily reduced, you can lay off your employee for a fixed term. Fixed-term lay-offs can last up to 90 days. In this case, too, the precondition for lay-offs is that you cannot offer your employee other work or training.
Lay-offs primarily apply to your permanent employees. You can lay off a fixed-term employee only if they work as a substitute for your permanent employee and you would be entitled to laying off said permanent employee.
As the employer, you may only agree with your employee on a lay-off for a fixed period and on the basis of the employer's activities and financial status.
You must always give notice of the lay-off to the employee who will be laid off. The notice of lay-off must be given in person. If this is not possible, you can submit the notification by letter or electronically. The notice of the lay-off must also be delivered to the representatives of the employees to be laid off.
You must give notice of the lay-off 14 days before the start of the lay-off at the latest. The notice period may also be longer, so check the possible collective agreement for your field.
The notice of lay-off must state
In case of fixed-term lay-offs, state the exact duration. You must provide a written certificate of the lay-off if your employee requests it.
You can contact your local employment authority and get help with various employment-related matters through the Business E-services section of Job Market Finland.
You can find the employment authority's services for employers and entrepreneurs in the Business E-services.
Change negotiations are joint activities between the employer and the personnel, the aim of which is to ensure the employees' possibilities of influencing their working conditions.
Obligations related to change negotiations depend on how many employees you regularly employ.
As an employer, you are subject to a statutory obligation to negotiate if you regularly employ at least 50 employees, and your organisation is about to experience
Before starting the change negotiations, you must submit a written negotiation proposal, which must include at least the date and location of the negotiations and a proposal on the issues to be discussed. A written negotiation proposal must also be submitted to the employment authority no later than when the change negotiations begin. The negotiations shall address the rationale, impact, and options of measures directed at personnel. Often both parties have a separate representative in the negotiations. In the change negotiations, the parties must act constructively and negotiate in a spirit of cooperation in order to reach consensus.
If you regularly employ between 20 and 49 employees, you must initiate change negotiations in situations where you are considering reduction measures concerning at least 20 employees over a period of 90 days. Measures to reduce refers to dismissals, layoffs, part-time work or unilateral amendments to a material condition of the employment contract on financial or production-related grounds.
If you are considering layoffs that last up to 90 days and are based on a temporary reduction in the conditions for offering work, you do not need to arrange change negotiations.
If you regularly employ fewer than 20 employees and are considering personnel reduction measures, you do not need to arrange change negotiations. However, before dismissing an employee, you must provide them with an explanation of the reasons and alternatives for the dismissal, and inform them about the available employment services.
You can contact your local employment authority and get help with various employment-related matters through the Business E-services section of Job Market Finland.
You can find the employment authority's services for employers and entrepreneurs in the Business E-services.
The change negotiations involve fixed time periods. Violating these can incur compensation payments or fines. Read the instructions for change negotiations carefully.
If you have under 20 employees, the change negotiations will not apply to you. However, before dismissal, you must provide your employees with an explanation of the reasons and alternatives for dismissal and inform them of the employment services available to them
You can only dismiss your permanent employee for a justified reason. Dismissal of an employee in a fixed-term employment relationship is only possible if it has been agreed upon separately. If your employee has violated their obligations very seriously, you can terminate the employment relationship. After the dismissal, you also have obligations regarding the offer of work and the reinstatement of the employee.
You must have a justified reason for dismissing an employee with a permanent work contract. Also remember that the dismissed employee's employment relationship does not end immediately, but after the period of notice. The length of your employee's employment relationship affects the duration of the period of notice. You must consult the employee before ending the employment relationship.
However, your employee may resign from a permanent employment relationship without a reason. They are still obliged to observe the period of notice.
You may have a reason for dismissal if
Read carefully the accepted and prohibited grounds for dismissal on the website of the Occupational Safety and Health Administration in Finland.
A fixed-term employment relationship ends at a time agreed in advance in the employment contract or when your employee has completed the work agreed in the employment contract. It is only possible for you to dismiss your fixed-term employee in the middle of the employment relationship if you have separately agreed upon it either in the employment contract or during the employment relationship.
If you enter into a fixed-term employment contract with your employee for more than five years, the practices of terminating a permanent employment relationship apply to the employment relationship.
In the case of termination of an employment relationship, the employment relationship is cancelled immediately without a period of notice. As an employer, you can only terminate an employment relationship if your employee has violated their obligations very seriously. Your employee may also cancel the employment relationship if you have seriously violated your obligations as an employer.
During the trial period, both you as an employer and your employee can terminate the employment relationship without a specific reason.
You can find detailed instructions on terminating an employment contract and its possible reasons on the website of the Occupational Safety and Health Administration in Finland.
When you dismiss your employee, you have an obligation to offer them employment, primarily employment corresponding to their current duties. In the absence of such work, the employee is to be offered other work corresponding to their training, professional skills, or experience.
You must provide the employee with the training required for new tasks given that organising and participating in it are reasonable for both you and the employee.
If you also control human resources matters in another organisation, you must determine whether the obligation to offer work or training can be fulfilled in these other organisations. A person who has been dismissed is not required to be a job seeker for this obligation, and their status must not be checked from the employment services. The fulfilment of this obligation does not eliminate any subsequent readmission obligation.
Please remember that when you need more employees for tasks that are suitable for part-time employees, you must first offer work to your part-time employees.
If you employ new personnel within four months of termination of the employment relationships of persons dismissed for production-related and financial reasons, you have the obligation to first offer the work to the employees dismissed from the same or similar work.
If the employment relationship has lasted for 12 years, the rehiring period is six months. For municipal office holders, the duration of the re-employment obligation is nine months. The duration of the re-employment obligation for civil servants is 12 months and for employees nine months. Longer re-employment periods may also be agreed upon in collective agreements or change negotiations. The re-employment obligation does not apply to lay-offs.
If your organisation has a vacancy that would be suitable for an employee subject to the re-employment obligation, you can check by secure email whether the employee is a job seeker in the employment services, unless otherwise agreed during the change negotiations. The employment official will record the query in its information system. If the person is a job seeker at the time of the check, you must offer them employment. You are responsible for keeping the employee's contact information, offering employment, and for ensuring that it is a genuine need for labour.
The obligations described above also apply to the employer who has dismissed employees as a result of the restructuring procedure.
You can contact your local employment authority and get help with various employment-related matters through the Business E-services section of Job Market Finland.
You can find the employment authority's services for employers and entrepreneurs in the Business E-services.
If you need to dismiss employees for production-related and financial reasons, familiarise yourself with transition security. Transition security helps both the employer and the employee who is to be dismissed.
The objective of transition security is to help the dismissed employee and make the change situation easier for you as an employer.
The transition security operating model includes
The employment official offers you transition security services. There are designated transition security specialists in the employment services who are responsible for services in transition security situations.
Transition security includes obligations that apply to you as an employer. The obligations depend on the number of your subordinates and the number of people you are about to dismiss.
Extended transition security is intended for you if you are 55 or older. The purpose of the service is to promote your quick employment and to improve your position in the labour market.
You are entitled to transition security for those aged 55 or over if
Transition security for those aged 55 or over includes
The transition security allowance corresponds to your average monthly salary. Remember to apply for transition security allowance to your unemployment fund or Kela within three months of the end of your employment relationship.
Transition security training is a service intended for persons aged 55 or over who have been dismissed from their employment relationship. The employment official must arrange and grant it once information on the person’s dismissal has been gained from the employer.
If you intend to dismiss at least ten employees, you must prepare an action plan to promote employment together with your personnel. This must be prepared when the cooperation procedure begins.
The action plan must include
Please notify the employment official of the termination of the employment relationship of the dismissed employees. Inform the employment official of the number of employees to be dismissed, their professions, work duties, and the dates of termination of their employment relationships.
You can contact your local employment authority and get help with various employment-related matters through the Business E-services section of Job Market Finland.
You can find the employment authority's services for employers and entrepreneurs in the Business E-services.
Inform the employees that they are entitled to an employment plan. If there are fewer than ten employees to be dismissed, you must explain in the change negotiations how your employees can apply for other jobs, training, or employment services during their period of notice.
If you regularly employ at least 30 employees, you must offer those dismissed the opportunity to participate in coaching or training that promotes employment. This applies to employees who have been employed by you continuously for at least five years. You can offer the possibility either during the period of notice or in the early stages of unemployment.
You must pay for the coaching or training you offer. You can also agree with the employee that you will pay for the training or coaching that they themselves acquire.
The principles governing the organisation of training or coaching are recorded in the work community development plan, which must be updated after the change negotiations.
If you fail to comply with the obligation to provide coaching or training, you must pay your employee a sum equivalent to the value of the coaching or training.
If you regularly employ at least 30 employees and the dismissed employee's employment has lasted for at least five years, as an employer, you are obliged to arrange occupational health care for six months as of the termination of the obligation to work. For this period, you will receive compensation under the Health Insurance Act.
In the event of dismissal, those aged 55 or over may receive extended transition security services that help them to re-employ quickly.
Citizens
If you are dismissed from your employment relationship on production or financial grounds and you have turned 55, you may be entitled to extended transition security. The extended transition security services will support your rapid re-employment.
Transition security for those aged 55 or over includes
The transition security allowance is, on average, equal to your one-month salary. The transition security allowance is paid by the institution paying the unemployment benefit, i.e. an unemployment fund or Kela.
The purpose of the transition security training is to promote your re-employment. The training increases your professional skills or supports your business operations, and its content meets your training needs. The training may last up to six months and is organised by the employment authority. Participating in the training is voluntary.
Under the Employment Contracts Act, your employer must inform you if you are entitled to transition security for those aged 55 or over. The obligation to provide information applies to all employers.
As an employee, you are entitled to transition security for those aged 55 or over if
Register as a jobseeker with the employment authority in your area within 60 days of your dismissal.
If you have a Finnish personal identity code, start your job search in the e-service. You can get support for using the e-service from Job Market Finland's E-services advice.
If you do not have a Finnish personal identity code or cannot use the e-service, contact the employment services in your area.
The employment authority checks your right to transition security for people aged 55 or over and informs the payer of the unemployment benefit about your right.
Apply for the transition security allowance from your unemployment fund or from Kela, within three months of the termination of your employment relationship.
Agree on the transition security training together with the employment authority.
The Job Market Finland's regional pages contain contact information provided by employment officials.
You can find more detailed information and instructions in the service description published by the employment authority in your area.
Employees and employers receive advice and support from the employment authority when an employment relationship is changed or terminated.
Citizens,
Businesses and non-government organizations
The employment authority gives employees and employers advice and support when an employment relationship is changed or terminated.
The employment authority helps laid-off and dismissed employees find new work or training in cooperation with employer representatives and staff or their representatives.
You will receive advice and support from the employment authority for job seeking, re-employment and improving your professional competence.
Employees made redundant on production or financial grounds receive support for re-employment already during the period of notice. As a dismissed employee, you will be entitled to paid leave when you draw up an employment plan or participate in labour market training agreed upon in the plan, job-seeking or re-employment training.
The employment authority provides employers with advice in situations where they need adjustment of activities. In most cases, situations refer to measures targeting personnel, such as part-time work, lay-offs or dismissals.
In the event of a change in the employment relationship, the employer has obligations that depend on the number of employees and the number of people to be dismissed or laid off.
The employer is obliged to notify the employment authorities of any redundancies if the redundancies concern at least ten employees. In such a change, the employer must make an action plan that promotes employment and explains how the job search and training of those made redundant will be supported.
The employer must also provide information on the extended change security of employees over 55 years of age.
If you are dismissed from your job and need personal guidance or intend to apply for unemployment security, you must register as a jobseeker with the employment services in your area.
The service the employment authority offers to organisations in situations involving personnel changes is statutory if the organisation falls within the scope of the Act on Co-operation within Undertakings and is about to enter into negotiations leading to personnel changes. The company must notify the employment authority of the change situation.
The employment authority also provides guidance and advice in change situations to companies and other organisations other than those covered by the Act on Co-operation within Undertakings where employees have to be laid off or dismissed.
If you wish to receive personal guidance and advice, register as a jobseeker with the employment services in your area already during your notice period. If you have a Finnish personal identity code, start your job search in the e-service. You can get advice on using the e-service from the employment services in your area.
If you do not have a Finnish personal identity code or cannot use the e-service, contact the employment services in your area.
If you need advice in situations of change or dismissal, contact the local employment authority.
The Job Market Finland's regional pages contain contact information provided by employment officials.
You can find more detailed information and instructions in the service description published by the employment authority in your area.
Jointly acquired training is labour market training organised jointly by the employment authority and a company.
Businesses and non-government organizations
Jointly acquired training is labour market training that the employment authority can organise together with the employer, the commissioner of the person intending to become an entrepreneur or the company transferring its business rights so that they participate in the funding of the training.
As an employer, you can organise labour market training to increase the professional competence and capabilities of current or future personnel. You can arrange jointly acquired training when the training is targeted at employees in your service or temporary agency workers, persons hired for your service or persons laid off or dismissed from your service.
Jointly acquired training may also be aimed at you as an entrepreneur when you are starting a business.
The employment authority will investigate whether the prerequisites for the training are met and whether there is a need for training.
If the training is targeted at persons to be employed by the employer, the employer’s contribution to the total price of the training without value added tax is 30 per cent and the employment authority’s contribution 70 per cent.
If the training is targeted at persons laid off or dismissed from the employer’s service, the employer’s contribution to the total price of the training without value added tax is 20 per cent and the employment authority’s contribution 80 per cent.
If the jointly acquired training is intended for employees or temporary agency workers employed by the employer or temporary agency workers whose purpose is to continue working for the employer, the employer’s contribution to the total price of the training without value added tax is 30–50 per cent. The contributions from the total price of the training, excluding VAT, are determined on the basis of the number of employees employed by the employer and the employer’s annual turnover or balance sheet.
Jointly acquired training is not to be used for the financing of regular orientation and personnel training for which the employer is the cost bearer or of training that employers must organise in order to comply with the national training standards.
If you intend to become an entrepreneur, you can organise jointly acquired training to increase your entrepreneurial capabilities if you have few commissioners as an entrepreneur or if you intend to acquire entrepreneurship rights from another company.
Contact the employment authority of your area and submit a proposal for jointly acquired training.
The handler of your proposal will contact you to assess training needs and draw up a preliminary training plan.
The Job Market Finland's regional pages contain contact information provided by employment officials.
You can find more detailed information and instructions in the service description published by the employment authority in your area.
Labour market training helps you develop your professional skills and promote your employment.
Citizens
Labour market training develops your professional skills and promotes your employment. Labour market training is training organised by the employment authority. The employment authority and the training provider plan the training together. Employers can also participate in the organisation of labour market training.
Labour market training may be:
Labour market training is free of charge, so you won’t need to pay participation or examination fees. However, card and licence training may be subject to a fee.
If you are unemployed, you are entitled to the same unemployment security during labour market training that you get when you are unemployed.
If you incur costs from participating in the training, you can receive an expense allowance for the days of participation. If you do not receive the allowance from the provider of your unemployment benefit, that is, the unemployment fund or Kela, you can apply for a discretionary expense allowance from the employment authority in your area.
In order to receive vocational guidance and career planning, you do not need to be registered as a jobseeker.
You can find which labour market training is currently available in the Trainings and services online service.
Apply for labour market training in the Job Market Finland’s e-service
If you are unable to apply online, you apply by filling in the form “Application for labour market training”.
Before submitting your application, carefully read the admission criteria of the training programme you are interested in.
If you are an unemployed jobseeker, you can apply for reimbursement of travel and accommodation expenses from the employment authority when you travel for an admission event or aptitude test for labour market training, or visit the educational institution before starting labour market training if your disability or illness requires familiarisation with the accessibility and suitability of the educational institution.
You can get support for using the E-service from the Job Market Finland's E-services advice.
You can find more detailed information and instructions in the service description published by the employment authority in your area.