Skip to content

Home Work life guide page Employment contract

Employment contract

What is the minimum that should be included in an employment contract? What issues are covered in a good employment contract?

What needs to be included in an employment contract?

It is important that the names of the parties to the employment contract are entered correctly in the contract. Especially in the case of the employer company, it is important to check that the correct employer is written in the contract. Writing down the place of business of the employer helps distinguish the employer, especially if the official name of the company is not written in the contract.

It is a good idea to agree on the start date of the work so that it is clear to both parties when the employee should be available to the employer.

In a fixed-term employment contract, a reason must be given as to why the contract is only for a fixed term. In other words, the employer must have some genuine reason why the employment relationship is agreed for a fixed-term and not permanent, if the contract is for a fixed term at the employer’s initiative. In addition, the employee must be given at least an estimate of the duration of the contract.

A fixed-term contract is usually intended to expire at the end of the term (grounds). However, sometimes the job does not match what was advertised in the job listing. For these situations, it is worth considering whether it is needed to agree on a trial period and/or termination clause (mixed agreement).

Agreeing on a period of notice makes a fixed-term contract a so-called “mixed agreement, in which case the employment relationship lasts until the end of the fixed term unless the contract is not terminated before this.

The trial period is a maximum of 6 months at the start of the employment relationship or up to half of the duration of a fixed-term employment contract, but never more than 6 months. If the parties want a trial period, it is advisable to agree on this in writing in the employment contract. Sometimes, the employer attempts to terminate the employment relationship on grounds of a trial period even when no such trial period has been agreed. Therefore, if an attempt is made to terminate during the  trial period, first check whether a trial period has been agreed in writing. 

A risk of having a trial period is that the employer can then terminate the contract immediately without notice period.

It is advisable to agree on the place of work in detail. For example, if the work is agreed to take place in the Helsinki Metropolitan Area, a situation may arise where the employee’s daily place of work is moved from Espoo to Vantaa.

In addition, it is important to agree on remote work. If remote work has not been explicitly agreed, the employee does not have the right to work from home.

If the employee does not have a primary fixed place of work, the employee must be given a description of the principles according to which the employee works at different sites or is free to determine his or her place of work.

This is usually expressed with the general clause “duties assigned by the employer” or similar. This gives the employer a broad freedom to make changes to the employee’s duties. If a job title is specified under the duties, this job title restricts the employer’s right to direct work so that the employee can only be assigned to general duties related to the profession in question, unless otherwise determined by established practice.

At the start of the employment contract, it must be specified which collective agreement the employer observes. However, the collective agreement may change at a later date.

It is important to agree on these as explicitly as possible, without room for interpretation. By clearly agreeing on these in the employment contract, you can avoid the most common disputes. Issues related to salary and wages are the most common causes of confusion. 

According to the Working Hours Act, regular working hours cannot exceed eight hours a day and 40 hours a week. Regular weekly working hours may also be arranged to be an average of 40 hours over a maximum period of 52 weeks.

Collective agreements generally agree on shorter working hours than the Working Hours Act. Many collective agreements set a maximum working hours of 7.5 hours per day or 37.5 hours per week.

Working hours can be agreed locally at the workplace in accordance with the law and collective agreements. For more information, see variable working hours agreements, for example.

The employee can agree on additional work in the employment contract, but not on overtime work – they must be agreed separately on each occasion or for a short period of time.

During the employment relationship, the employee accrues paid leave, also known as annual holiday. The Annual Holidays Act (162/2005) contains general provisions on accruing days of holiday and holiday pay, but collective agreements often contain better terms than the law.

Please note that annual holiday pay is required by law, whereas holiday bonus is agreed locally or in the collective agreement. Read more about holiday bonus.

The maximum notice period to terminate the employment relationship is 6 months.

If a notice period has been agreed in the employment contract or collective agreement, the general notice periods specified in the law are not observed. It is worth checking the collective agreement to see whether it is agreed that an employment contract can deviate from the notice periods agreed in the collective agreement.  

If nothing has been agreed on a notice period, the general notice periods of the Employment Contracts Act apply.

Please note that the signature date and the start time of the work may be different dates.

If necessary, the employment contract may also include provisions on, for example, standby workadditional work, working abroad, non-disclosure and non-competition agreements.

If variable working hours, such as a zero-hour contract, are agreed  at the employer’s initiative, the employer must provide the employee with an explanation of the reasons for using variable working hours and an estimate of the expected number of hours. The purpose of this is to help the employee plan their use of time and give an estimate of the expected income.

The employee can agree on additional work in the employment contract, but not on overtime work – they must be agreed separately on each occasion or for a short period of time.

The employer is required to notify the employee of the changes to the terms of employment in writing. The notification does not need to be given in situations where the change in the terms applicable to the employment relationship is due to a change in legislation or the collective agreement.

The employee must also be given an account of the right to training provided by the employer on the basis of the law, an agreement or practice.

In addition, the employee must be informed of the collective agreement applicable to the work and the insurance institution where the employer has arranged the employee’s pension cover or insured the employee against accidents at work and occupational diseases.

Duration of the employment contract

Employment contracts are valid until further notice or for a fixed term. An employment contract that is valid until further notice is valid indefinitely. A fixed-term contract expires based on a set date, the completion of a specific task, or a specific event.​​​​​​

In what form should the employment contract be made?

There is no set form for employment contracts. An employment contract can be made verbally, in writing, electronically or tacitly. In practice, it is always a good idea to make the employment contract in writing, so that its contents can be clearly verified later.

A tacit agreement may be made in such a way that the employer allows the employee to begin working even though nothing has been agreed about the terms of the employment contract when starting work. In this case, the terms of the employment contract are determined by the collective agreement binding on the employer or the law.

General information about employment contracts

The basic characteristics of an employment contract are the performance of work on the basis of a contract, for pay, on behalf of the employer under the direction and supervision of the employer.

The parties to an employment contract may not agree that a contractual relationship which meets the above characteristics does not observe the Employment Contract Act. If the employment contract conflicts in some respects with the collective agreement applied to the contract, the employment contract is null and void in respect of such parts and the corresponding provisions of the collective agreement are observed instead.

The employer must provide the employee with a written account of the main terms and conditions of the employment relationship when the employment contract is agreed for an indefinite period or a fixed term of more than one month. The duty to provide information applies only to those key terms and conditions that have not been agreed in a written employment contract.
The employer must provide the employee with a written account of the main terms and conditions of the employment relationship, if they are not included in a written employment contract. The account must be given by the end of the first pay period at the latest. The account must be given without the employee requesting it separately.

Do I have the right to work remotely?

The employer has the right to decide how and where work is performed.

Unless remote work has been explicitly agreed in the employment contract, the employee does not have the right to work remotely. Remote work practices at the place of work which are not explicitly agreed in the employment contract can also be freely changed by the employer.

Education tips on the topic

You can also learn more about the topic in the online training library for working life, which is part of your member benefits. To access the courses, you must sign up to the online training library. If you have already taken advantage of your free membership benefit and started using the service, log in and click directly to the trainings from the links below. If you haven’t yet signed up, you can do so in the Webinars and Courses section in the Oma+ service for our members

How to draw up the employment contract in practice​​​​​​​

Employment contract and different forms of employment

Tips for effective job search – Issues related to employments