With the deepening of globalization, when enterprises expand their business in multiple countries, cross-border labor compliance has become one of the most complex and severe challenges. To help enterprises systematically address this issue, we have collaborated with top labor lawyers from over 50 major jurisdictions worldwide (all recommended by Chambers, The Legal 500, or equivalent institutions) to jointly compile a Chinese-English labor & employment compliance guide exceeding 1 million words, and we will continuously update relevant key points.

This article publishes the key points of labor & employment compliance in Finland.

01 Overview of the Labor Law System

1.Legal System

Finland operates under a civil law system.

2.Resources and Agencies

Finnish labour regulation comprises several different employment-related laws. The main statutes and regulations relating to employment are the Employment Contracts Act, Working Time Act, Collective Agreements Act and Co-operation Act, and administrative regulations and collective bargaining agreements at the field-of-activity level or the company level. International agreements and EU legislation are also applicable.

02 Employment Qualifications and Classification

1.Employment Age

A person who has reached the age of 15 and who has completed basic education in the manner prescribed by the Act on Primary and Secondary Education may be employed. In addition, people who have reached the age of 14 or who will reach that age during the calendar year may be employed in light work that does not harm their health or development and does not interfere with their education. Employees who are 15 years of age or older may enter, terminate, and dismiss their own employment contracts.

2.Qualifications for Foreign Employers

If a foreign company is only in Finland temporarily, it can operate without a permanent place of business. However, if the presence is not temporary, a permanent place of business must be registered with the Finnish Patent and Registration Office.

3.Classification of Employment

There are several different forms of employment in Finland. The most generic form is traditional employment based on an employment contract, where the employee has signed an employment contract with the employer and works on their behalf. Temporary agency work has become more common in Finland, and outsourcing is also possible. Those are also based on employment contracts but are worth mentioning as the nature of the work is slightly different from traditional. Working as an entrepreneur/ self-employed is also quite common.

4.Foreign Workers

Non-EU nationals generally need a work-based residence permit before starting work; the scope of the right to work depends on the permit type (some are unrestricted, others tie you to a sector/role). If you are a citizen of an EU country, or Iceland, Liechtenstein, Norway, or Switzerland, you can start working in Finland as soon as you arrive, with no residence permit needed. But if you stay longer than three months, you must register your right of residence.

03 Recruitment and Employment Contracts

1.Background Examination

Background checks in Finland are tightly regulated. Employers may only collect information that is necessary for the job (the “necessity principle”), and you cannot bypass that rule even with the applicant’s consent.

2.Contract Types

The default is a non-fixed-term contract. A fixed-term contract is lawful only with a justified reason (e.g., substitution, seasonal/project work, internship, or a similar objective need). If a fixed term is used on the employer’s initiative without a valid reason, the contract is treated as indefinite.

3.Probationary Period

In Finland, a probationary period must be agreed at the start of employment. The statutory maximum in open-ended contracts is six months. In fixed-term contracts, the probation (including any extensions) may not exceed half of the contract’s total duration and, in any case, may not exceed six months.

04 Working Standards

1.Remuneration

Pay is anchored in sectoral collective agreements (CBAs) which set minimum rates and many supplements. A typical package is base salary (at or above the CBA minimum) plus CBA-driven supplements such as evening/night/shift/Sunday premiums and overtime premium.

Finland does not have regional minimum wages. Instead, minimum pay is set sector-by-sector in CBAs.

2.Statutory Benefits and Social Security

The statutory package is social insurance.

• Earnings-related pension (TyEL);

• Unemployment insurance (Employment Fund);

• Health (sickness) insurance;

• Workers’ compensation (accident) insurance.

3.Working Hours

Finland’s Working Hours Act provides for several main systems: general working time, period-based work for defined sectors, the flexible working time arrangement for knowledge-type roles.

4.Rest and Leave

Finnish law guarantees a weekly rest of at least 35 consecutive hours in every seven-day period, preferably arranged around Sunday.

Main statutory leaves are annual leave (statutory paid vacation), family leaves (pregnancy, parental, childcare, temporary child-care, carers’ leave, etc.), and study leave.

05 Occupational Health and Special Protection

1.Occupational Health and Security

Employers must ensure work is safe and healthy: assess and prevent risks, give induction/training and instructions, provide/maintain PPE, and safe equipment, and monitor the work environment continuously.

2.Special Protection

In Finland, several groups benefit from specific employment protections and permitted positive measures. Gender equality rules prohibit discrimination (including based on gender identity/expression) and require employers with at least 30 employees to maintain a gender equality plan with a periodic pay survey.

06 Personal Information and Privacy

1.General Rules

In Finland, employee privacy and personnel data are regulated by the Act on the Protection of Privacy in Working Life (759/2004), the EU GDPR, and the Finnish Data Protection Act (1050/2018).

2.Transnational Transfer

In Finland, cross-border transfers of employees’ personal data follow the GDPR’s Chapter V rules, applied together with Finland’s Working Life Privacy Act “necessity” principle.

07 Anti-Discrimination and Anti-Harassment

1.General Rules

Discrimination is prohibited on protected grounds (e.g., gender, age, origin, language, religion, disability, sexual orientation), and harassment linked to protected ground is treated as discrimination. Separately, the OSH Act requires employers to prevent and stop harassment or other inappropriate treatment that endangers health.

2.Protective Characters

In Finland, protected characteristics are set by the Non-Discrimination Act and the Act on Equality between Women and Men. They cover sex (including pregnancy, childbirth and parenthood), gender identity and gender expression, age, origin (including ethnic or national origin), nationality, language, religion and belief, opinion and political activity, trade-union activity, family relations (family status), state of health, disability, sexual orientation, and any other comparable personal characteristic.

08 Internal Policies

1.Applicability

In Finland, it is standard to manage employees with internal policies/handbooks under the employer’s managerial right, provided the rules are lawful, reasonable, clearly communicated, and do not override statutes or collective agreements or unilaterally change essential contract terms.

2.Validity

In Finland, internal policies are generally valid without formal approval or consent from employees, unions, authorities, or other third parties.

3.Whistleblowing

Private-sector employers with ≥250 employees and public bodies with ≥50 employees had to run an internal, secure, confidential channel.

09 Transactions

1.Employment Relationship

In Finland, whether employment contracts continue “as is” through a transaction depends on the deal form. In a share (equity) deal, the employer entity does not change, so employees stay with the same company in the same positions, pay and terms, and the transfer-of-undertaking rules do not apply.

2.Compensation

In Finland there is no automatic compensation merely because an M&A closes, whether it is a share (equity) deal or a business (asset) transfer.

10 Termination of Employment

1.Termination Grounds

Finland is not an at-will jurisdiction. Under the Employment Contracts Act, an open-ended contract may be ended only for cause or for genuine economic/production/organizational reasons.

2.Termination Procedure

Under the Employment Contracts Act, terminations normally require notice. Immediate dismissal without notice is only allowed as a summary termination for a particularly weighty reason (e.g., theft, violence, gross breach of trust) or during probation for suitability-related reasons (never for discriminatory or otherwise improper grounds).

3.Termination Protection

In Finland, employees are protected from dismissal by the Employment Contracts Act, the Non-Discrimination Act, and the Act on Equality between Women and Men. You cannot dismiss on discriminatory grounds (e.g., pregnancy, family leave, disability, age, union activity), and dismissals during pregnancy or family leave carry a reversed burden of proof on the employer.

4.Severance and Compensation

Finland has no general statutory severance pay. Under the Employment Contracts Act, ending employment for cause or redundancy does not by itself trigger a severance entitlement.

5.Wrongful Termination

Finland does not use reinstatement as the standard remedy for wrongful termination. Under the Employment Contracts Act, the primary liability is a lump-sum compensation for unjustified termination, generally between 3 and 24 months’ pay, and up to 30 months for shop stewards/elected representatives.

6.Mass termination and Layoffs

In Finland, large-scale dismissals trigger co-operation talks. Employers with at least 50 employees must always run the process when planning economic/production-related dismissals.

11 Confidentiality, Non-Compete, and Non-Solicitation

1.Confidentiality

In Finland, signing a separate confidentiality agreement is not generally mandatory, but it is standard practice for roles that handle sensitive information. Even without an NDA, employees are bound by a duty of loyalty and by trade secret rules, yet a written clause helps define scope, duration, and remedies.

2.Non-Compete and Non-Solicitation

In Finland, post-employment non-compete clauses are lawful but tightly regulated. They require a particularly weighty reason linked to the employer’s business or the role (e.g., access to trade secrets), and they may restrict work for up to 12 months after employment ends.

By contrast, non-solicitation clauses (e.g., no poaching of clients or colleagues) are not expressly regulated in statute.

12 Work Representation and Trade Unions

1.Work Representation

Finland does not have a German-style mandatory works council, but several laws require or enable employee representation.

2.Trade Unions

Finland’s trade union landscape is sector-based and pluralistic: workers freely join unions that affiliate with one of three national confederations, SAK (blue-collar), STTK (clerical/technical) or Akava (professionals).

13 Dispute Resolution

1.Procedures & Enforcement

In Finland, individual employment disputes are usually handled in stages: the employer and employee first try to resolve the matter directly (often with a shop steward or elected representative); if needed, they can use voluntary mediation (including court-annexed mediation).

2.Waiver & Enforcement

In Denmark, severance agreements are subject to freedom of contract. Therefore, the agreements may contain waivers for statutory and contractual rights. However, the employee can only waive statutory rights if the severance agreement places the employee in a better position overall than the position, the employee would have been in had no severance agreement been entered into.

14 Others

1.Latest Development & Trends

The government has introduced measures to ease individual terminations, lowering the threshold for dismissals on personal grounds.

2.Cultural and Religious Considerations

For international investors, including those from China, it is important to be aware of Finland’s cultural and religious context when entering the market. Understanding and respecting these expectations helps build trust and credibility, which are central to successful long-term business relationships in Finland.

* To avoid ambiguity, this article should not be regarded as legal advice.

Authors

Jani Syrjänen from Borenius Attorneys is renowned for his expertise in employment law. Jani provides strategic counsel to both international and domestic clients on a comprehensive array of employment law matters, including pensions and benefits, occupational safety, discrimination, and business immigration issues.

Translator

Jin Dongjie, Master of Laws, associate at Anli Partners. Area of expertise: Labor Law, ESG Compliance, Dispute Resolution.