Regulations Governing the Termination of Employment Relationships

Terminations of employment relationships are regulated in chapter 6 of the Employment Contracts Act. An employment relationship may terminate by giving notice, cancelling the employment agreement or through the expiration of a fixed-term employment agreement. If the employment agreement is terminated by giving notice, the employment relationship ends after a notice period. If an employment agreement is cancelled, the employment relationship ends immediately. Legislation, and if applicable a collective agreement, as well as the employment agreement itself, sets out detailed rules regarding the valid grounds for terminating an employment relationship.

In connection with terminating an employments agreement, the employer must also take the provisions of the Act on Co-operation within Undertakings into account. The cooperation negotiations must be held with the employment groups and organizations that fall within the scope of the law. In addition, the equality provisions and prohibition of discrimination rules must be complied with.

Illegal termination of an employment relationship may have to severe consequences for the employer.