Krogerus' employment law summer newsletter 2026
Now that summer is here, it is a good time to review recent employment law developments in Finland. Legislative activity has been considerable at both national and EU level. Several reforms have already entered into force, while others, such as the EU Pay Transparency Directive and its transposition into Finnish law, are at various stages of preparation. In this newsletter, we outline some of the key changes that employers should be aware of.
Notable legislative reforms already in force as of 1 June 2026
1. Introduction of new rules for fixed-term employment contracts without a justified reason
As of 1 June 2026, amendments to the Employment Contracts Act allow employers to conclude a fixed-term employment contract without a justified reason, provided it is the first employment relationship between the employer and the employee within the five years preceding the conclusion of the contract. Such a contract may be concluded even where the employer has a permanent need for labour, and the contract may have a maximum duration of one year. A contract concluded in breach of these conditions will be deemed valid for an indefinite period. Following the reform, employer-initiated fixed-term employment contracts may be categorised as follows: (1) fixed-term contracts based on a justified reason; (2) fixed-term contracts concluded with long-term unemployed individuals; (3) fixed-term contracts with employees who have reached the highest retirement age; and (4) fixed-term contracts concluded without a justified reason (new).
The reform also introduces new rights and obligations for employers in connection with contracts concluded without a justified reason, relating to early termination, the obligation to provide an explanation of the possibility of continuation, and the obligation to offer alternative employment.
Either party may terminate a fixed-term employment contract concluded without a justified reason once it has been in force for at least six months, in accordance with the same procedures and rules that apply to indefinite-term contracts. Before the fixed term expires, the employer must provide the employee with a reasoned explanation of the possibility of continuing the employment relationship on an indefinite or justified fixed-term basis. Upon the employee's request, this explanation must be provided in writing within one month. In addition, if the employer is considering hiring for the same or a similar role after the contract ends, it must first offer work to the employee. This obligation continues for a period equal to one third (⅓) of the duration of the employment relationship. The employer must notify the employee without delay at the address provided by the employee, and if the employee does not respond within two weeks of the notification, the work may be offered to another person.
2. Notification period for temporary layoffs reduced to 7 days
The notification period for temporary layoffs (furloughs) was reduced from 14 to seven days with effect from 1 June 2026. Where a collective bargaining agreement (CBA) provides for a longer notification period, the employer and the employees' representative, or, where no representative has been elected, the employees collectively may agree locally to apply the statutory seven-day period. In the absence of such an agreement, the longer notification period under the CBA would apply.
3. Re-employment obligation limited to employers with at least 50 employees
With effect from 1 June 2026, the re-employment obligation, which requires employers to offer work to redundant employees if the employer needs new employees for the same or similar work within four months of termination (or six months where the employment relationship lasted at least 12 years), applies only to employers who regularly employ at least 50 employees. However, employers should note that CBAs may include deviating provisions.
Status of significant upcoming legislative reforms
1. Amendments to the Act on Equality between Women and Men to strengthen protection against discrimination based on pregnancy and family leave
On 10 June 2026, Parliament approved amendments to the Act on Equality between Women and Men. The amendments aim to prevent discrimination based on pregnancy and family leave. The changes explicitly add parenthood and family care obligations to the list of prohibited grounds of discrimination and clarify that the prohibition also applies to decisions concerning fixed-term employment.
As a new statutory obligation, employers will be required to provide, without request, a written explanation for the non-renewal or termination of a fixed-term employment relationship. This obligation will apply where the employee has, during the employment, notified the employer of a pregnancy, childbirth, or family leave, or where the employer has otherwise become aware of such circumstances.
The amendments also extend liability for compensatory payments to client companies that use leased employees. Where a client company, when selecting leased employees or terminating the assignment of a leased employee, places the leased employee in a less favourable position on grounds of pregnancy, parenthood, or family care obligations, the leased employee will have the right to claim compensatory payments under the Act also from the client company.
In addition, amendments will be made to the limitation period for claiming compensatory payments. Under the amendments, a claim will have to be brought within two years from the breach of discrimination. The current one-year limitation period which applies only to recruitment-related discrimination will be removed.
The amendments are scheduled to enter into force in autumn 2026.
2. Employee representation in administration proposed to be extended to companies with at least 100 employees
The Government is preparing amendments to the Co-operation Act that would extend the scope of employee representation in company administration. Under the proposed reform, the threshold would be lowered from 150 to 100 employees, bringing a larger number of companies within scope. As currently drafted, the reform would abolish the existing agreement-based model, with default rules applicable when an agreement cannot be reached. When the majority of employees so request, the employer would have an obligation to implement employee representation at board or management team level, or equivalent bodies covering the employer's business units. Deviations from this implementation method would be possible with the permission of the Cooperation Ombudsman, or in the case of agreed group-wide representation. Entry into force was scheduled for 1 July 2026, but the government proposal has not yet been submitted to Parliament.
3. Timing of carried-over annual holiday
The government proposal on carried-over holidays was submitted to Parliament on 16 June 2026. Under the Annual Holidays Act, employees may currently save part of their annual leave for a later date and, where the parties cannot agree on timing, the employee may unilaterally choose when to take the carried-over holiday. The proposal would remove this unilateral right. Where the parties cannot agree, the employer would be entitled to refuse an employee's request regarding the timing of carried-over holiday if the proposed timing would cause harm to the employer's production or service operations that could not be avoided through ordinary work arrangements, or if taking the carried-over holiday at that time would prevent the equitable scheduling of annual leave and carried-over holiday among employees. The proposed amendments are intended to enter into force on 1 January 2027. It should be noted that the government proposal includes a transitional provision under which an employee could indicate their intention to take saved leave in accordance with the existing procedures, if the leave is taken by 31 October 2027 at the latest.
4. Pay Transparency Directive
Transposition of the EU Pay Transparency Directive (Directive (EU) 2023/970) continues to be delayed. The Directive requires Member States to ensure that employers have pay structures guaranteeing equal pay for the same work or work of equal value. In Finland, the Directive will be implemented primarily through amendments to the Act on Equality between Women and Men.
Member States were required to transpose the Directive by 7 June 2026. Finland's implementation remains ongoing and no confirmed effective date is currently available. The government proposal is scheduled to be submitted to Parliament during the week of 6 July 2026, and it remains to be seen whether this timeline will hold. As a result, implementation is expected at the earliest during the last quarter of 2026, potentially extending into 2027. Finland is not alone in missing the deadline; Sweden and Estonia, for instance, have both indicated their intention to seek a postponement while continuing legislative preparation.
5. Platform Work Directive
A working group has been established to prepare the national legislation required to implement the Platform Work Directive (Directive (EU) 2024/2831). The Directive aims to improve working conditions and the protection of personal data for persons performing platform work. It covers the determination of employment status, algorithmic management, and transparency obligations, and also contains provisions on remedies available to platform workers. The Directive was adopted on 23 October 2024 and must be transposed into national law by 2 December 2026. The government proposal is expected to be submitted to Parliament during the week of 14 September 2026.
Additional information and previous newsletter
Please contact our Employment & Benefits practice, if you have any questions regarding the topics covered in this newsletter. You can find the previous employment law newsletter here.
