Finland Dismissal Process 2026 Checklist: Step‑by‑step Employer Guide

Last reviewed: 4 May 2026

The amendments to Finland’s Employment Contracts Act (Työsopimuslaki) that took effect on 1 January 2026 represent the most significant shift in individual termination law in over two decades, replacing the former “particularly weighty reason” standard with a lower “proper reason” threshold for person‑related dismissals. For HR directors, in‑house counsel and employer representatives, the practical question is no longer whether the law has changed but how to operationalise it without exposing the organisation to unfair‑dismissal claims. This Finland dismissal process 2026 checklist distils the reformed rules into a concrete, step‑by‑step workflow, covering investigation, warnings, notice obligations and post‑termination duties, so that every decision is documented, defensible and compliant.

Use it alongside the downloadable templates referenced throughout to build an evidence pack that can withstand scrutiny from unions, the Occupational Safety and Health Administration (Työsuojelu) and, if necessary, a Finnish court.

Quick Checklist: Finland Dismissal Process 2026, Employer Checklist for Dismissal

The numbered steps below form the core of any employer checklist for dismissal in Finland after the 2026 reforms. Each step specifies what to document, who to involve and what evidence to preserve. Where a step is marked ⚠ STOP, seek legal advice, the risk profile is high enough that proceeding without qualified counsel materially increases litigation exposure.

Step 1, Initial Fact‑Gathering (Investigation)

1. Identify the issue. Record the date, nature and source of the concern (misconduct report, performance data, customer complaint, health‑related inability). Document everything in an investigation memo template.
2. Appoint an investigator. Designate an impartial person, ideally someone outside the employee’s direct reporting line, to collect evidence. Under the Occupational Safety and Health Administration’s guidance on termination procedures, the employer bears the burden of proving that proper grounds exist.
3. Gather and preserve evidence. Collect relevant emails, system logs, witness statements and performance records. Observe data‑protection obligations under Finland’s Data Protection Act and the GDPR when accessing employee data.

Step 2, Warning and Corrective Action

4. Issue a written warning. Under the amended Employment Contracts Act, an employer may not as a rule terminate for person‑related reasons without first giving the employee an opportunity to amend their conduct. The warning must state the specific deficiency, the expected improvement and a reasonable timeframe. Use the warning‑letter template and have the employee sign an acknowledgement of receipt.
5. Allow a genuine correction period. The length depends on the nature of the issue, industry observers expect that a period of two to four weeks is defensible for straightforward conduct issues, while capability cases typically require longer. Record all support offered (training, coaching, adjusted duties).

⚠ STOP, seek legal advice if the conduct is so serious that it may justify summary termination (cancellation) without a warning period. Summary cancellation under Chapter 8 of the Employment Contracts Act requires an “extremely weighty reason” and carries elevated litigation risk.

Step 3, Reassignment and Alternatives

6. Assess whether reassignment is feasible. The Employment Contracts Act requires the employer to consider whether the employee could be placed in other available work before termination. Document every vacancy reviewed and the reasons reassignment is or is not practicable. This obligation applies to both person‑related and redundancy‑based dismissals.

Step 4, Decision Meeting and Documentation

7. Hold a hearing (right to be heard). Before making the final termination decision, invite the employee to a meeting and explain the grounds being considered. The employee has the right to bring a representative, typically a shop steward or union representative. Record the meeting in minutes signed by all parties. This hearing obligation flows from the Employment Contracts Act and is reinforced by Työsuojelu procedural guidance.
8. Make and record the decision. If, after the hearing, the grounds remain sufficient and no alternative exists, authorise the termination in writing. The decision memo should reference the specific facts, the warning(s) given, the alternatives explored and the legal basis under the Act.

⚠ STOP, seek legal advice if the employee is a union representative, is pregnant or on family leave, is on extended sick leave or disability, or is subject to a collective agreement with enhanced protections. Dismissal law in Finland 2026 still prohibits termination on discriminatory grounds, and these categories carry heightened scrutiny.

Step 5, Notice and Practical Handover

9. Deliver written notice of termination. The notice must be given in person where possible. If the employee cannot be reached, it may be sent by post, taking effect on the seventh day after posting. Use the appropriate notice‑of‑termination template (person‑related or redundancy). State the grounds clearly, vague or generic language is a common basis for successful challenge.
10. Observe the correct notice period. Statutory notice periods under the Employment Contracts Act range from 14 days (employment of up to one year) to six months (employment of more than 12 years). Always check the applicable collective bargaining agreement (CBA), which may prescribe longer periods. See the notice‑period table below for details.

Step 6, Post‑Dismissal Obligations (Re‑Employment, Compensation)

11. Comply with the re‑employment obligation. When termination is based on financial or production‑related (redundancy) grounds, the employer must offer available work to the former employee for a specified period after the employment relationship ends, provided the former employee has registered as a jobseeker with the employment office. The Ministry of Economic Affairs and Employment (TEM) guidance confirms this duty continues to apply under the 2026 framework.
12. Process final pay and documentation. Pay all outstanding wages, accrued holiday pay and any contractual severance within the statutory deadline. Issue a certificate of employment. Archive the complete dismissal file, investigation memo, warnings, hearing minutes, termination notice and correspondence, for a minimum retention period sufficient to cover potential litigation timelines.

Legal Grounds and When Termination Is Lawful: Dismissal Law Finland 2026 Explained

Understanding how to dismiss an employee in Finland in 2026 starts with the legal threshold. The amendments to the Employment Contracts Act fundamentally recalibrated the balance between employer flexibility and employee protection for person‑related terminations. Below is a plain‑English comparison of the old and new standards, followed by the main categories of lawful termination grounds.

Person‑Related Termination Grounds Finland 2026

Before 1 January 2026, an employer needed a “particularly weighty reason” (erityisen painava syy) to dismiss an employee on person‑related grounds. The 2026 amendment replaced this with a “proper reason” (asiallinen syy) standard. According to TEM guidance, the change is intended to bring the Finnish threshold closer to the mainstream European norm while retaining core procedural safeguards. Grounds that may constitute a proper reason include:

• Serious or repeated breach of obligations. Persistent neglect of duties, refusal to follow lawful instructions, or repeated policy violations, provided a warning has been issued and the employee had an opportunity to correct their behaviour.
• Material change in personal circumstances affecting work capacity. This covers situations where the employee can no longer perform the essential functions of the role and reasonable adjustments have been exhausted.
• Breach of trust. Dishonesty, misuse of employer property or conflicts of interest that undermine the employment relationship.

The amended law still expressly prohibits termination on the basis of illness (unless the incapacity is substantial and permanent), political opinion, participation in lawful industrial action, or the exercise of legal rights. PAM (Service Union United) has emphasised that these protections remain unchanged, and employees retain the right to challenge any dismissal they consider unfounded.

Capability and Health Grounds

Where the ground is diminished work capacity due to health, the employer must demonstrate that the incapacity is not temporary, that occupational health services have been consulted, and that reassignment was explored. For deeper analysis of the intersection between long‑term disability and termination, see our guide to firing on long‑term disability, legal considerations.

Redundancy and Operational Grounds

Termination on financial, production‑related or reorganisational grounds follows the existing framework under Chapters 7 and 9 of the Employment Contracts Act and the Act on Co‑operation within Undertakings. The 2026 reforms did not alter the substantive threshold for collective redundancies, but employers must still satisfy the re‑employment obligation and, for companies meeting the headcount threshold, complete co‑operation negotiations before issuing notices. For a detailed overview, consult our existing guide on termination of an employment agreement under the Finnish law.

Fixed‑Term Contract Changes in Finland

The 2026 package also introduced greater flexibility for concluding fixed‑term contracts. Industry observers expect this will reduce employers’ reliance on indefinite contracts in project‑based industries. However, fixed‑term contracts still cannot ordinarily be terminated before expiry unless the contract contains an express termination clause or the grounds for summary cancellation are met. Employers should review existing fixed‑term templates to ensure termination clauses are included where appropriate.

Procedural Steps and HR Process Before Dismissal, How to Dismiss an Employee Finland 2026

Even where proper grounds exist, a procedurally defective dismissal can be declared unfair. The steps below expand on the quick checklist and provide the operational detail HR teams need.

Investigation Best Practice

Begin every potential dismissal case with a structured investigation. Assign an impartial investigator, define the scope in writing, and set a target completion date. Under Työsuojelu guidance, the employer should act without undue delay once it becomes aware of a potential ground for termination, an unreasonable gap between discovering misconduct and taking action may be interpreted as the employer condoning the behaviour. A reasonable investigation timeline for straightforward cases is typically one to three weeks; complex matters involving multiple witnesses or external data may require longer.

Interview Templates and Notes

Interview the employee concerned and any relevant witnesses using a consistent template. The template should capture the date, attendees, questions asked, answers given and any documents shown. Offer the employee the right to have a support person present at any investigatory interview, this is distinct from the formal hearing required before the termination decision but builds procedural fairness into the record.

Disciplinary Meeting Script

The formal hearing (Step 7 in the checklist) should follow a structured script:

1. State the purpose of the meeting and the grounds being considered.
2. Present the evidence gathered during the investigation.
3. Give the employee an opportunity to respond fully, and record their response.
4. Explain the potential outcomes, including termination.
5. Adjourn to allow a considered decision; avoid announcing the outcome on the spot.

Data Protection and Evidence Retention

All evidence must be collected and stored in compliance with the GDPR and Finland’s Data Protection Act. Inform the employee if monitoring data (email logs, access records) is being used, and ensure that data is retained only for as long as necessary for the purpose, typically until the expiry of any statutory limitation period for challenging the dismissal. Consult data‑protection counsel if the investigation requires accessing private communications or health data.

Notice Periods Finland 2026, Re‑Employment and Compensation Obligations

Getting the notice period wrong is one of the most common, and most avoidable, errors in Finnish dismissals. The table below sets out the statutory minimums under the Employment Contracts Act, but employers must always cross‑check the applicable collective bargaining agreement and individual employment contract, both of which may impose longer periods.

Statutory Notice Periods

Re‑Employment Obligations and Period

Where the termination is based on redundancy grounds, the employer’s re‑employment obligation requires offering suitable vacancies to the dismissed employee before hiring externally. According to TEM guidance on lay‑offs and termination, this obligation runs for a defined period after the employment relationship ends. Employers should maintain a log of all vacancies arising during the re‑employment period and document the assessment of whether the former employee’s qualifications match.

Severance and Compensation Considerations

Finnish law does not mandate a general statutory severance payment for lawful dismissals. However, if a court finds the dismissal unfair, compensation of three to 24 months’ pay may be awarded under the Employment Contracts Act. For further detail on calculating potential exposure, see our guide to compensation for dismissal or summary dismissal. Many employers choose to offer a voluntary settlement package to secure a clean exit, see the risk‑reduction section below.

Reducing Dismissal Litigation Risk: How to Reduce Dismissal Litigation in Finland

A well‑documented, procedurally fair process is the single most effective way to reduce dismissal litigation in Finland. The steps below supplement the checklist with strategic risk‑mitigation measures.

Document Retention and Evidence Pack

Assemble a complete evidence pack before issuing notice. The pack should contain the investigation memo, all witness statements, performance data, the warning letter and acknowledgement, the hearing minutes, the decision memo and the termination notice. Store a copy in a secure HR archive and retain it for the full limitation period applicable to employment disputes.

Settlement and Release Drafting Tips

A settlement agreement (sopimus työsuhteen päättämisestä) can eliminate litigation risk entirely if drafted correctly. Key elements include:

• Clear mutual release. Both parties waive claims arising from the employment relationship.
• Adequate consideration. The settlement amount should be commercially reasonable; an obviously inadequate sum invites challenge.
• Employee’s right to independent advice. Allow the employee time to consult a union representative or lawyer before signing, courts scrutinise releases signed under time pressure.
• Confidentiality and non‑disparagement clauses. Standard but should be mutual.

When to Offer Compensation to Avoid Litigation

Industry observers expect that the lower threshold introduced by the 2026 reforms will, over time, reduce the volume of marginal unfair‑dismissal claims. In the interim, while case law under the new standard develops, the practical risk calculus may still favour offering a modest settlement in borderline cases, particularly where the employee has long tenure, union backing or the factual record is incomplete.

Finland Dismissal Process 2026 Checklist, Key Legislative Timeline

Templates and Sample Letters (Downloadable)

The following templates support each stage of the Finland dismissal process 2026 checklist. Each is designed to capture the minimum documentation required for a defensible termination under the amended Employment Contracts Act.

• Investigation memo template. Structured form for recording the scope, evidence collected, witnesses interviewed and preliminary findings. Recommended for completion within the first week of any investigation.
• Warning letter template. Includes fields for the specific deficiency, the expected improvement, the correction period and the consequences of failure to improve. Should be signed by the employee or accompanied by proof of delivery.
• Notice of termination, person‑related grounds. States the factual and legal grounds, references prior warnings, confirms the notice period and provides information on the employee’s right to challenge.
• Notice of termination, redundancy grounds. References the financial, production‑related or reorganisational basis, confirms that co‑operation obligations have been met (where applicable) and sets out the re‑employment obligation.
• Settlement offer template. Framework for a mutual termination agreement including release, consideration, timeline for acceptance and confidentiality provisions.

When to Seek Legal Help

Certain dismissal scenarios carry significantly elevated risk and should not be managed without specialist employment counsel. Seek immediate legal advice where the dismissal involves a trade‑union representative, an employee on family or parental leave, a disability or long‑term health situation, cross‑border employment arrangements, executive‑level contracts with bespoke termination provisions, or any situation where an unfair‑dismissal claim appears likely. Qualified Finnish employment lawyers can be found through the Global Law Experts Finland lawyer directory.

Sources

1. Finlex, Employment Contracts Act (Työsopimuslaki)
2. Ministry of Economic Affairs and Employment (TEM), Lower threshold for terminating employment
3. Occupational Safety and Health Administration (Työsuojelu), Termination
4. PAM (Service Union United), New dismissal law 2026
5. Borenius, Finland lowers termination threshold (December 2025)
6. Castrén & Snellman, The threshold for dismissal is lowered
7. TEM, Lay‑offs and terminating