An employment relationship is based on an agreement between the employee and the employer

What is an employment relationship?  

An employment relationship is established when an employee and an employer agree that the employee will work for the employer, who will pay wages for the work.

There are different types of employment relationships: permanent, full time, fixed term and part time, for example. The type of your employment relationship affects your working time and holidays, among other aspects. It also affects what happens if you become ill. 

Read more about various forms of employment

How are the terms of employment determined?  

The minimum terms of employment are determined by the collective agreement for the sector and labour law. Terms of employment include wages, working time and holidays, for example. 

Employment contracts 

An employment contract is an agreement on the central terms and conditions of the employment between you and your employer. In addition to wages, the employment contract specifies your working time and tasks, among other aspects. You should always make the employment contract in writing and take a copy or picture for yourself. 

Read more about employment contracts and their entry into force

Collective agreement

A collective agreement is an agreement on the terms of employment in a specific sector. PAM negotiates collective agreements for the service sectors with associations representing employers. Different sectors (such as the commerce sector, the property services sector and the hotel and restaurant sector) have their own collective agreements. The agreements determine the minimum terms of employment – that is, the rules for doing work and having work done. Minimum wages are also agreed in collective agreements. 

Read more about the collective agreements negotiated by PAM

Labour legislation

Labour legislation includes a wide range of laws that determine the rights and obligations of workers and employers. These include the Employment Contracts Act, the Working Hours Act, the Annual Holidays Act, the Non-Discrimination Act, Occupational Safety and Health Act, the Act on the Protection of Privacy in Working Life and the Collective Agreements Act, for example. Law

Laws are adopted by Parliament based on propositions by the Government. PAM does advocacy to improve legislation and defend workers rights.

Workplace practices and rules 

A workplace may have established practices or procedures that have been followed for a long time. If a certain way of working has been applied to an employment relationship for a sufficient period of time, such a practice may become a binding term of employment for the employee and the employer.

Employer’s orders

The employer’s right to manage and monitor workplace matters is called the right to supervise work. Based on this right, the employer may determine what tasks must be performed, where and when.  The workers obligation is to follow the employers instructions on performing the work.

What rights and obligations does an employment relationship involve? 

An employment relationship involves a wide range of rights and obligations. The key rights and obligations include the following: 

When can the terms of employment be changed?   

The employer has the right to make some changes to the work to be done. Within the limits agreed in the employment contract, the employer may, for example, make changes to how work is carried out and with which tools and at which location.  

However, essential terms of employment, such the wages paid for the work, cannot be changed unilaterally. Amending such terms always requires either mutual agreement or the existence of grounds for termination. When applying grounds for termination, the change may not come into force until after the notice period.   

On the other hand, it is not always clear what is an essential term of employment, and this may lead to differences of opinion between the employer and the employee. The definition of an essential term of employment may also be affected by case-specific circumstances. 

Converting an employment relationship into part-time employment  

The employer may convert an employment relationship into part-time employment when the work available has decreased for financial reasons, reasons related to production or reasons related to the reorganisation of the employer’s operations. The conversion of an employment relationship into part-time employment requires the existence of grounds for termination, and the employer must comply with the notice period.   

How to deal with unclear situations 

In unclear situations, you should contact the union representative or PAM if a union representative is not available. If the employer attempts to change an essential term without justification, the employee should inform the employer in writing that she or he considers the change to be unjustified and reserves an opportunity to have the justification of the change investigated. You should not refuse to work while the issue is investigated, if you want your employment relationship to continue. 

Read also

• Employment contracts
• End of employment