Termination of employment
Fixed-term employment contracts are terminated at the end of the fixed period or on completion of the agreed work. Neither party can terminate a fixed-term employment contract, unless provision for this has been expressly included in the contract. A fixed-term employment contract may be cancelled in cases where the conditions set out in the Employment Contracts Act (55/2001) are satisfied.
An employment contract concluded for an indefinite period is valid until it is terminated by either the employee or the employer. The terms of notice specified in collective agreements must be observed.
An employer is only allowed to terminate an indefinitely valid employment contract for proper and significant reasons. Examples include a reason related to an individual employee or financial and production-related reasons.
Before giving notice, the employer must determine whether it is possible to place the employee in some other position in the company or in another group company. If this is possible, the employer must offer any work available to an employee under threat of termination in order to avoid giving notice.
If an employer terminates an employment contract without a legitimate reason, the employer is obliged to pay compensation for unfair dismissal. The amount of compensation is equivalent to the employee’s pay due for a period of 3 to 24 months.
Employees are not obliged to give grounds for terminating their own employment contract, but they must also observe the term of notice.
Checklist for the end of employment
- Check that you have been paid everything that you are owed and request a pay certificate.
- Check that you have received holiday compensation for any holidays that you have not taken.
- Request an employment certificate.
- Register as an unemployed job seeker at your local employment office if you don’t have a new job lined up: read more on the Unemployment Fund’s pages.