International Assignments
An international assignment is in question when an employee is assigned to work temporarily abroad. An international assignment can be carried out in the following ways:
the employee’s current Finnish employment contract is supplemented by a separate fixed-term assignment contract;
the sending and receiving companies act jointly as employers in which case they are both jointly liable for the employee’s employment benefits; or
the employee enters into an employment contract directly with the foreign employer.
In the first two cases, the employment relationship with the Finnish employer typically remains resting during the assignment. In the third case the employment relationship with the Finnish employer is usually terminated and the employee is employed by the foreign employer in accordance with the terms and conditions of the destination country.
If the employment contract has connections to more than one country’s legislation, the applicable law shall be determined in accordance with the Rome Convention. The employer and employee may, however, agree upon the applicable law by taking a reference of the applicable law in the employment contract. A reference to applicable law shall not, however, diminish such rights of the employee which she/he would have based on the mandatory laws applicable without such reference.
A Finnish collective agreement is applicable abroad if the collective agreement includes a mention of working abroad. The parties can also agree on the applicability of a collective agreement in the assignment agreement.
All in all, an international assignment requires thorough preparation, including clarification of various tax and social security questions. As regards international assignments lasting for more than one month, the Employment Contracts Act requires the employer to provide to the employee clarification of the main terms of employment in good time before the employee travels to the working destination.
It is recommendable to include at least the following clauses in an international assignment agreement:
parties
place of work (host country, location, office)
work duties and working hours
applicable law and possible collective agreement
term of contract
salary and payment of salary (incl. the currency of salary) as well as remuneration and fringe benefits
annual holiday
travel documents (passport, visa, working permit) and reimbursement of travel costs
accommodation and residential costs
insurances
terms and conditions regarding the repatriation of the employee and reimbursement of travel costs to and from destination (incl. possible family members)