Article

55/2001: Ch. 12, Sec. 2. 1333/2021: Ch. 6, Sec. 44-45. 1233/2013: Ch. 7, Sec. 43-45. 449/2007: Sec. 21-23

Description

The Employment Contracts Act sets the regulation for compensation for an employer’s wrongful termination of an employment contract. An employer who terminates an employment contract against the conditions set by legislation, or who has caused the employee to end the contract through disrespecting employment legislation, may have to reimburse the ex-employee with a sum corresponding to a minimum of three and a maximum of 24 months' salary. For employee representatives, the sum may correspond up to 30 months' salary. The reimbursement sum will depend on:

• the estimated length of unemployment and estimated loss of earnings;
• the duration of the employment relationship;
• the employee's age and employability/employment prospects within a relevant field and at a relevant level of education;
• the employer's procedure in terminating the contract;
• in case of a fixed-term contract, the remaining period of the contract;
• any potential motive for termination originating in the employee;
• the general circumstances of the employer and the employee;
• other relevant aspects.

Furthermore, if cooperation negotiation procedures during restructuring are not respected, the employer may be liable to pay an affected employee a compensation of up to €35,000 (indexed). This applies to private companies with 20 employees or more. For local governments the maximum compensation level is €30,000 and for state employers and employees, the maximum compensation sum is €34,140. The compensation sum will depend on the degree of neglect towards negotiation procedures, the general conditions of the employer, and the duration of the employee's employment contract as well as the nature of the measure that affects him/her. An employer can in addition be liable to a fine by, in other ways, breaching the obligations to co-operate.

Employees can take action against non-compliant employers through trade union representatives and the courts. The indemnification expires if no action is taken within two years of the employer's breach against contract termination conditions.

Commentary

Trade unions generally offer legal support to their members in case of employer non-compliance with dismissal regulations.

Additional metadata

Cost covered by

Employer

Involved actors other than national government

Trade union Court

Involvement (others)

None

Thresholds

Affected employees: No, applicable in all circumstances
Company size: No, applicable in all circumstances
Additional information: No, applicable in all circumstances

Sources

• Ius Laboris (2009), Collective Redundancies Guide, Brussels
• Employment Contracts Act (55/2001)
• Työsopimuslaki (55/2001)
• Laki yhteistoiminnasta yrityksissä (334/2007)
• Laki yhteistoiminnasta valtion virastoissa ja laitoksissa (1233/2013)
• Laki työnantajan ja henkilöstön välisestä yhteistoiminnasta kunnissa (449/2007)
• Yhteistoimintalaki (1333/2021)
• Co-operation Act (1333/2021)