Employment case law update 2026

In this newsletter, we review selected Finnish employment law cases from 2026 and their practical implications for employers.

Pre-trial detention did not entitle the employer to treat the employment contract as dissolved

The Supreme Court rulings KKO 2026:8 and KKO 2026:65 (see below) illustrate the different employment law considerations raised by pending or concluded criminal proceedings against an employee.

In KKO 2026:8, the Supreme Court held that the employee's pre-trial detention, of which the employer was aware, constituted a valid reason for absence that prevented the employer from treating the employment contract as dissolved on that basis.

In this case, the employee was held in pre-trial detention on suspicion of a crime and was absent from work from that date. The employee's employer became aware of the detention that same day and deemed the employee's employment contract dissolved from the first day of unauthorised absence. The employee was later released from the detention without any charges.

Under Chapter 8, Section 3 of the Finnish Employment Contracts Act, an employer may treat an employment contract as dissolved from the start of an employee's absence if the employee has been absent for at least seven days without informing the employer of a valid reason for the absence. This limitation on the employer's right to treat an employment contract as dissolved typically arises in cases of sickness or other absences, where the employee has an acceptable reason for failing to notify the employer of the absence. In this case, however, the employer already knew that the employee was absent because of pre-trial detention. The key question was therefore whether the detention constituted a valid reason for absence for the purposes of this provision, which the Supreme Court confirmed.

The employer relied solely on its right to treat the employment contract as dissolved. The Supreme Court therefore did not assess other grounds for termination, and the ruling should not be read as establishing that pre-trial detention cannot constitute a valid ground for terminating an employment contract.

Key takeaways for employers:

• An employer cannot treat the employment contract as dissolved where the employee is held in pre-trial detention and the employer is made aware of the detention.
• Distinguish treating an employment contract as dissolved from termination on other grounds, which the court did not assess in this case.
• Depending on the circumstances, where an employee is detained, employers may consider whether grounds for termination exist or whether to seek a mutual termination agreement with the employee.

Dismissal of criminal charges did not make the employee's dismissal unlawful

The Supreme Court case KKO 2026:65 concerned the termination of an employment relationship involving criminal proceedings. The employee worked as a district manager, selling and renting machinery. The employee had accepted a machinery transaction while knowing that the machine belonged to a financing company, without verifying the transfer of ownership, and had recorded the details of the trade incorrectly, causing the employer a loss of EUR 25,000. The employer terminated the employment contract with notice, relying on the charges of negligent money laundering brought against the employee. According to the employer, the charges made it impossible to continue the employment relationship given the nature of the employee's duties and responsibilities. The charges were later dismissed, and the employee challenged the termination.

The Supreme Court stated that the employee held a position involving considerable independence and responsibility and highlighted the greater degree of trust between employer and employee in such cases. The Supreme Court noted that the considerable economic significance of the employee's duties was illustrated, for example, by the total value of the machine trade underlying the dismissal, which was EUR 281,000.

The Supreme Court stated that the suspicion underlying the charges could have created the impression that money laundering was possible within the company's business or that ownership was not verified in economically significant machinery transactions. The Supreme Court held that the employee's conduct was contrary to their duties and caused reputational harm to the company, giving the employer legal grounds for termination. As the company already knew of the employee's conduct and negligence, it was not required to await a final judgment in the criminal proceedings. The dismissal of the charges during the notice period did not require the employer to withdraw the notice of termination.

Key takeaways for employers:

• A later dismissal of charges does not automatically make the employee's dismissal unlawful.
• While criminal proceedings are ongoing, it is worth assessing on a case-by-case basis whether grounds for dismissal exist.
• Keep the burden of proving the grounds for dismissal in mind. Relevant factors may include the employee's actual conduct in breach of the employment contract, their level of responsibility and independence, and any reputational harm to the employer.

Long-standing practice of paid meal breaks did not become a contractual term of employment

In KKO 2026:12, the issue was whether a long-standing practice of paid meal breaks had become a binding term of employment through established practice or implied agreement. Train drivers had, for years, taken a paid 35-minute meal break during working hours. The employer decided to switch to an unpaid 59-minute break, which was later shortened to 30 minutes. The employment contracts did not expressly address whether meal breaks were paid or how they should be organised. Instead, they provided that working time was governed by the Working Hours Act and the applicable collective agreement (CBA) in force from time to time. Importantly, the CBA allowed two alternative models: a paid break taken during working time and an unpaid break that did not count as working time.

The Supreme Court stated that an established practice can become binding only if it has continued for a considerable time, is consistent and unambiguous in content, has been followed systematically, and shows both parties' intention to be bound by it. The Court maintained its previous position that scheduling work and breaks taken during working time generally falls within the employer's core managerial prerogatives. Although the paid meal-break practice had continued for a long time, the train drivers could not reasonably have relied on it continuing unchanged. Crucially, the applicable CBA expressly allowed two meal-break models, and the employment contracts left the choice between them open. The employer was therefore entitled to switch to the unpaid-break model.

Key takeaways for employers:

• Start by checking the wording of the employment contract when assessing the employer's right to make changes.
• The ruling suggests that an employer does not easily lose its right to choose between options permitted by a collective agreement in matters falling within its core managerial prerogatives.

Presumption of discrimination in selection for a position

In KKO 2026:18, the Supreme Court considered the presumption of discrimination in selection for a position. A public servant had applied for two deputy Head of Delegation positions during a position transfer round at the Ministry for Foreign Affairs. The applicant was not selected, and the positions were filled by less qualified candidates of a different gender.

The issue was whether the Ministry for Foreign Affairs could prove that its selection decisions were based on acceptable grounds other than gender. The Supreme Court stated that a presumption of discrimination generally arises where a less qualified person of a different gender is selected over a more qualified candidate. The Ministry tried to rebut that presumption by relying on the objectivity and gender neutrality of its position transfer system. Although these general considerations could support the Ministry's decisions, they did not sufficiently explain why the less qualified candidates had been selected for the specific roles. The Ministry had not sufficiently substantiated the grounds it relied on, and the presumption of discrimination was therefore not rebutted.

Key takeaways for employers:

• Document why the selected candidate was preferred for the particular role and ensure that those reasons are not discriminatory, rather than relying solely on the neutrality of the selection process.
• The threshold for establishing a presumption of discrimination is relatively low, so employers should be prepared to rebut it.

Determining the applicable collective bargaining agreement in agency work

The Supreme Court case KKO 2026:45 concerned the collective bargaining agreement (CBA) applicable to agency work. Agency workers are employed by a temporary work agency but work under the supervision and direction of another company, the user company. The claimants argued that the user company's CBA, rather than the agency's CBA, should have applied to them and claimed unpaid wages under that agreement. Chapter 2, Section 9 of the Employment Contracts Act sets out the minimum terms of employment applicable to agency workers. If the agency is not bound by a CBA through membership of an employers' association or by being a direct party to a CBA, nor required to observe a generally applicable CBA in the relevant sector, the workers' terms must be at least equivalent to those under a CBA binding on or otherwise applicable to the user company. If neither the agency nor the user company applies a CBA, the terms governing pay, working time and annual holidays must be at least equivalent to the agreements or practices binding on, and generally applied, at the user company.

The Supreme Court ruled on the matter in accordance with the wording of the Employment Contracts Act and found that the terms of the agency workers' employment could be governed by their own employer's CBA. The ruling did not change the existing legal practice.

Key takeaways for employers:

• Check which CBA applies when an employee is assigned to work for a user company as they may be covered either by the employer's CBA or by the user company’s CBA.
• Identify the applicable CBA in the service agreement between the employer hiring out the employee and the user company to clarify the applicable pay and other terms.

Additional information

Please contact our Employment & Benefits practice if you have any questions or would like to further discuss the employment law cases presented in this article.