Skip to content
Home » New dismissal law 2026: what employees need to know
Articles

20.04.2026 15:09

New dismissal law 2026: what employees need to know

The new dismissal law changed the rules in the Employment Contracts Act about grounds for dismissal. What does the law mean in practice, and can an employee now be dismissed more easily? PAM’s Chief Legal Officer explains what changes and what doesn’t.

At the beginning of 2026, changes to the Employment Contracts Act came into force. The so-called new dismissal law has raised concern about employees’ protection against dismissal.

In short: a proper reason is now enough for dismissal, but protective principles, overall assessment, and the obligation to give a warning still remain.

PAM’s Chief Legal Officer Arja Pohjola explains what the new law means in practice for employees.

Has protection against dismissal weakened?

The aim of the law change was to make dismissal easier, but the final result was not as major as first feared.

— Changes that weaken employees’ protection against dismissal came into force at the beginning of the year. Thanks to the influence of trade unions, the changes were ultimately smaller than expected.

One key protection stayed the same.

— An important achievement was that the obligation to give a warning before terminating an employment contract remained in the law.

What changed in the new dismissal law?

The biggest change concerns the grounds for dismissal.

— One of the most important changes is that the requirement of weighty grounds has been removed.

— It has been replaced by a lighter requirement. An employment contract can now be terminated for a proper reason.

In practice, this means that dismissal can be based, for example, on a breach or neglect of the employee’s obligations.

— A proper reason can be a breach or neglect of obligations that affect the employment relationship.

Changes in the conditions for working can also be a reason.

— A proper reason can also be a significant change in the conditions for working, where the employee can no longer manage their tasks.

Can an employee now be dismissed more easily?

Even though the law was changed, dismissal is still not allowed for just any reason.

— Clearly, very minor issues cannot be considered proper grounds for dismissal.

Dismissal is also not allowed for arbitrary or discriminatory reasons. International agreements still apply.

— Finland is bound by ILO conventions and the European Social Charter, which require a valid reason for dismissal.

Principles of labour law also guide the employer.

— Protective legal principles still apply, such as the principle of protecting the employee and the duty of loyalty.

What does the law mean in practice now?

The real impact of the law is not yet fully known, because new case law has not yet developed.

— The starting point is that there have not been major weakenings in protection against dismissal.

It will take several years for new case law to develop. This also means some uncertainty for employees.

— Before new case law develops, there will be a certain level of legal uncertainty.

What the new dismissal law of 2026 means for employees

  • A proper reason is now enough for dismissal (previously a proper and weighty griybds were required)
  • A warning must still usually be given before dismissal.
  • Minor or discriminatory reasons do not justify dismissal.
  • The real impact of the law will only become clear through case law.
  • PAM continues to provide support and legal assistance as before.

Teksti: Minttu Sallinen
Kuva: Eeva Anundi

Keywords:

employment relationship legislation membership

What did you think of this content?

Read next

Search