Fixed-term employment contract

Fixed-term employment contracts are prohibited, if the employer has a permanent need for labour. Permanent need for labour means that it is likely at the time of signing the contract that the demand for labour will continue even after the fixed-term contract ends. Long chains of temporary contracts usually prove that there is a permanent need for labour, especially if the employee is deputising for several employees during the chain.

Proving the permanent need for labour does not always require a long chain of contracts. It is sometimes possible to assess at the time of signing the first contract that the employer’s need for temporary labour is not temporary but permanent. In this event, the fixed-term contract is deemed a non-fixed-term contract. If the employment ends, even though the employee had wanted to continue working, the employee is entitled to compensation for undue termination.

If the employment was no longer offered to the employee because they had taken family leave, the criteria for discrimination prohibited by the Act on Equality between Women and Men are met. Employees discriminated against because of pregnancy or taking family leave are entitled to compensation from the employer in accordance with the Act on Equality between Women and Men.

The employer has the right to sign a fixed-term contract without the requirement of presenting valid grounds with employees who have been unemployed jobseekers for the previous 12 months according to the Employment and Economic Development Office. The maximum duration of a fixed-term contract is one year.

The contract may be renewed within one year of the start of the first fixed-term contract up to two times. However, the combined total duration of the contracts cannot exceed one year.

A fixed-term employment contract binds the parties to the contract for the duration of the contract. The contract cannot be terminated if the contract does not specify the option to terminate. This termination term is practical in long fixed-term contracts, in particular, because things may change during a long contract.

If the employee terminates their fixed-term employment contract prematurely without a termination clause, they may have to pay damages.

However, according to the collective agreement between the health services sector, Hammaslääkäreiden työnantajayhdistys and Tehy, a fixed-term contract of more than eight months can be terminated by complying with the period of notice, unless otherwise agreed.