Termination of employment contract in Finland
Since 1 January 2026 a Finnish employer needs only a proper reason to dismiss on personal grounds; you can resign without one. Notice, cancellation, trial period.
An employer in Finland needs a reason set out in the Employment Contracts Act to end a permanent employment contract, and since 1 January 2026 a "proper reason" is enough for dismissal on personal grounds, replacing the earlier "proper and weighty reason", as the trade union PAM's summary of the new law sets out. As an employee, you can resign without giving any grounds and only observe the notice period, according to the Occupational Safety and Health Administration's terminating the employment contract page. A contract ends in one of three ways: by notice, by cancellation with immediate effect, or during a trial period.
Who this applies to
- Employees who want to leave need no reason, only the notice period.
- Employers ending a permanent contract need personal grounds, or financial and production-related grounds, each with its own rules below.
- Employees on a fixed-term contract stay until the end date unless the contract allows notice.
- Employees in a trial period can be let go, or leave, without notice.
- Employees on a work-based residence permit face a second set of rules from the Finnish Immigration Service when the job ends.
The lower threshold since 1 January 2026
An amendment to the Employment Contracts Act that entered into force at the start of 2026 lowered the threshold for dismissal on personal grounds. Before the change, the employer needed a "proper and weighty reason". Now a "proper reason" is enough. PAM's summary notes that a proper reason can be a breach or neglect of the employee's obligations, or a significant change in the employee's circumstances that leaves them unable to manage their work. Very minor issues still do not count, discriminatory dismissals remain prohibited, and the duty to give a warning before dismissal stayed in the law.
The Finnish Government's proposal limited the employer's obligation to reassign the employee to cases where the employee's capacity to work has changed during the employment relationship. The change to the threshold concerns personal grounds. Dismissals for financial and production-related reasons follow their own rules.
Some official pages, including the Occupational Safety and Health Administration's termination page, still use the old wording. PAM points out that case law on the new threshold has not yet developed, so how courts apply it will become clearer through their decisions.
Personal grounds
Personal grounds fall into two groups:
- a breach or neglect of obligations arising from the employment contract or the law, such as failing to follow instructions, neglecting duties or unexcused absences
- a change in the employee's personal circumstances that means they can no longer manage their work
The warning
If the reason is neglect or breach of obligations, the employer must first give a warning and a chance to correct the behaviour. A dismissal for conduct without an earlier warning is hard for the employer to justify, unless the breach is so serious that cancellation is allowed. If you receive a warning, keep a copy with its date and content.
Prohibited grounds
The Occupational Safety and Health Administration lists grounds that are never valid for dismissal, including:
- illness, disability or injury, unless the employee's capacity to work has diminished substantially and permanently
- taking part in industrial action organised by an employee organisation
- the employee's political, religious or other opinions
- taking part in civic activities or associations
- the employee using the legal remedies available to them
Financial and production-related grounds
An employer can give notice if the work available has decreased substantially and permanently for financial or production-related reasons, or because of a reorganisation, and the employee cannot be placed in or trained for other work. Notice on these grounds is not allowed if the reduction is only temporary, if the employer hires a new employee for similar work before or after the dismissal, or if the reorganisation has not reduced the work. A temporary reduction in work is handled with a layoff (lomautus), which suspends work and pay while the contract continues. Since 1 June 2026, the Finnish Government states that the employer must notify a layoff no later than seven days in advance.
Key time limits
The Employment Contracts Act and the Finnish Government's June 2026 announcement set these time limits:
| Rule | Time limit |
|---|---|
| Employer's statutory notice period | 14 days to 6 months, by length of employment |
| Employee's statutory notice period | 14 days, or 1 month after 5 years |
| Right to cancel after learning of the reason | 14 days |
| Trial period | up to 6 months |
| Layoff notice (from 1 June 2026) | 7 days |
| Re-employment obligation | 4 months, or 6 months after at least 12 years of employment |
| Compensation for late final pay | up to 6 days' pay, plus interest |
Notice periods
Notice from either side follows the period in the collective agreement, the employment contract or the Employment Contracts Act. See the article on the notice period in Finland for the full tables by length of employment.
Cancellation
Cancellation (purkaminen) ends the employment immediately, without a notice period. It is only allowed for an extremely weighty reason, meaning a breach so serious that the other party cannot reasonably be expected to continue the employment even for the notice period. The right to cancel lapses if it is not used within 14 days of learning of the reason. An employee can also cancel the contract if the employer seriously breaches its obligations.
The trial period
During an agreed trial period, which can last up to six months, either party can end the employment without a notice period. The reason must not be discriminatory or otherwise inappropriate given the purpose of the trial period.
Fixed-term contracts
A fixed-term contract ends when its term ends or the agreed work is finished, without notice. It can only be terminated with notice during its term if the contract allows it, and the Occupational Safety and Health Administration states that a party ending it early without such an agreement must compensate the other for the damage caused. From 1 June 2026, the Finnish Government announced that a fixed-term contract of up to one year can in certain situations be concluded without a justified reason, and either party can terminate such a contract once it has lasted at least six months.
The rules for each contract type are covered in employment contract types in Finland.
Re-employment obligation
If an employer dismisses an employee for financial or production-related reasons and later needs someone for the same or similar work, it must offer the work to the former employee if they are still a jobseeker. The obligation lasts four months after the employment ends, or six months if the employment lasted at least 12 years. From 1 June 2026, according to the Finnish Government, the re-employment obligation applies only to employers with at least 50 employees. A collective agreement can contain its own rules.
Work-based residence permits
If your residence permit depends on the job, the end of employment starts a second process. The Finnish Immigration Service's end of employment page gives a protection period of three or six months to find new work, depending on the permit and how long you have held a work-based permit. The employer's duty to notify Migri is covered in terms of employment for a Migri work permit.
Certificate of employment and final pay
When the employment ends, you can ask for a certificate of employment (työtodistus) stating how long the employment lasted and what your duties were. On request, it can also state the reason for ending the employment and an assessment of your skills and conduct.
Your final pay, including compensation for annual holiday you have not taken, is due when the employment ends. If final pay is late without a valid reason, the Employment Contracts Act entitles the employee to their full pay as compensation for the delay for up to six days, in addition to interest.
If you are left without work, see unemployment benefit in Finland.
The law behind it
The Employment Contracts Act (työsopimuslaki 55/2001) sets the notice periods in chapter 6, the employer's grounds for termination in chapter 7 and the rules on cancellation in chapter 8. The Finnish-language consolidated text includes the 2026 amendments. If you are a union member, contact your trade union before you sign anything. More on your rights is in the guide to employee rights in Finland.
The date that matters falls 14 days after the employer learns of the reason: if it has not cancelled the contract by that date, cancellation is no longer available and only dismissal with notice remains.
Frequently asked questions
Does an employer in Finland need a reason to dismiss an employee?
Yes, and the reason must be one the Employment Contracts Act allows. For personal grounds the bar is a "proper reason" since the start of 2026, as PAM explains, while reductions in work follow separate rules.
Must an employer give a warning before dismissal in Finland?
Yes, for conduct. Neglect or breach of duties needs a warning and a chance to improve first, and PAM confirms the 2026 reform kept this requirement.
Can I be dismissed for being ill in Finland?
Being ill is not a lawful ground in itself. The Occupational Safety and Health Administration states that it only becomes one when your capacity to work has fallen substantially and permanently.
What is cancellation of an employment contract?
It is termination with immediate effect, with no notice period. Either side can use it for an extremely weighty reason, within 14 days of learning of that reason, under the Employment Contracts Act.
Does the re-employment obligation still apply in Finland?
Yes, at larger employers. Since 1 June 2026, the Finnish Government states that it binds employers with 50 or more employees. The obligation lasts four months, or six months after at least 12 years of employment.
Sources
- Occupational Safety and Health Administration, Terminating the employment contract, checked 1 October 2026
- PAM, New dismissal law 2026: what employees need to know, checked 1 October 2026
- Finnish Government, Legislative changes to make fixed-term employment contracts more flexible to enter into force on 1 June 2026, checked 1 October 2026
- Finnish Immigration Service, End of employment, checked 1 October 2026
- Finlex, Employment Contracts Act 55/2001, checked 1 October 2026
- Finnish Government, Government proposal submitted to Parliament on lower dismissal threshold, checked 1 October 2026
Last updated: October 2026