A Central European technology company with a Finnish subsidiary received a formal dismissal challenge from a senior employee. The employee alleged that the termination procedure had not followed Finnish employment legislation requirements. With labour litigation costs mounting and operations in Finland at risk, the company needed a clear strategy – and quickly.
Employment disputes in Finland are governed by employment legislation that places strict obligations on employers regarding dismissal notice periods, collective agreement compliance, and valid grounds for termination. A wrongful dismissal claim must typically be filed within two years of the disputed act. The outcome of such claims depends heavily on whether the employer has documented each procedural step correctly before and during the termination procedure.
This case study outlines how the matter was structured, what complications arose, and the three transferable lessons that apply to any international employer managing employment disputes in Finland.
Client profile and the challenge at hand
The client was a mid-size technology business headquartered outside Finland. It had established a Finnish subsidiary three years earlier and had grown its local headcount to around forty employees. The dismissal in question involved a senior manager whose employment contract included terms derived from an applicable collective agreement.
The employee contested the dismissal on two grounds. First, the employer had allegedly failed to observe the correct dismissal notice period set out under Finnish employment legislation. Second, the employee argued that the grounds for termination did not meet the statutory threshold required under Finnish labour law for individual redundancy.
The stakes were significant. Under Finnish employment legislation, courts may order reinstatement or substantial compensation when an employer cannot demonstrate lawful grounds. The company had not previously litigated employment matters in Finland. Its internal HR team was unfamiliar with how Finnish työtuomioistuin (Labour Court) proceedings differ from processes in its home jurisdiction. That knowledge gap created real exposure.
The matter also carried a secondary risk. If the claim succeeded on procedural grounds, a parallel challenge by the employee's trade union – based on the collective agreement – could follow. For an international employer operating under a sector-specific collective agreement, that scenario would compound both cost and reputational impact.
Our detailed approach to employment law matters in Finland informed how we structured the initial response.
Legal strategy: rationale and key milestones
The immediate priority was to audit the dismissal process against Finnish employment legislation requirements. This meant reviewing the employment contract, the applicable collective agreement provisions, the notice documentation, and any internal communications preceding the termination.
The audit produced two findings. The dismissal notice period had been correctly calculated. However, the documentation supporting the grounds for individual redundancy was insufficient. Finnish employment legislation requires employers to demonstrate that alternatives to dismissal – redeployment, retraining, and reassignment – were genuinely considered before proceeding. The file contained no written evidence of that assessment.
The strategy chosen was a two-track approach. On the procedural track, the firm prepared a detailed written response to the claim demonstrating compliance with notice obligations. On the substantive track, the team reconstructed the pre-dismissal decision process using available internal records, email correspondence, and witness accounts from HR personnel.
Key milestones proceeded as follows. Within the first three weeks, the claim response was filed with the competent district court (käräjäoikeus). Over the following two months, the documentary reconstruction was completed and submitted as supplementary evidence. A settlement conference was held at the court's direction approximately four months after the initial filing. The matter concluded through a negotiated settlement before the oral hearing stage.
Choosing negotiated resolution over full litigation was deliberate. Finnish courts in employment matters often encourage settlement. Proceeding to a full hearing would have extended the timeline by a further six to nine months and increased costs materially. The client's priority was resolution, not precedent.
Complications and how they were addressed
Three complications arose during the process. Each is instructive for international employers in similar positions.
Collective agreement interpretation. The applicable sector collective agreement contained notice period provisions that modified the statutory baseline. The employee's representative argued that the collective agreement terms applied exclusively, producing a longer notice obligation. Resolving this required a careful reading of the relationship between employment legislation and collective agreement terms under Finnish law. Finnish courts have established that collective agreement provisions prevail over statutory minimums where the agreement expressly extends employee protections. The firm's position – that the correct period had been applied – was supported by the specific language of the agreement in question.
Social security contribution records. During the proceedings, a question arose regarding the client's social security contribution filings during the notice period. Delays in payment to the Finnish social insurance system had created a secondary administrative issue. This required coordination with Finnish authorities separate from the court proceedings. The matter was resolved through corrected filings before it could affect the main claim.
Cross-border evidentiary issues. Several key witnesses were located outside Finland. Obtaining signed witness statements in a format acceptable to Finnish procedural rules – and translating relevant documents from the company's internal language into Finnish – added time to the preparation phase. International employers routinely underestimate this step. The evidentiary standards of Finnish civil procedure differ from those of many other European jurisdictions.
For clients with related corporate structuring questions, our corporate law services in Finland address how subsidiary governance affects employment liability exposure.
To explore how a comparable dispute was managed in another jurisdiction, our employment dispute case study from Portugal provides a useful comparison across civil law systems.
To discuss how Finnish employment legislation applies to your organisation's specific situation, contact us at info@ferrazwhitmore.com.
Three transferable lessons
Lesson one: document the alternatives-to-dismissal assessment in writing. Finnish employment legislation requires employers to show that redeployment and retraining options were genuinely explored before individual redundancy. Many international employers satisfy this obligation internally but fail to create written records. Without documentation, the legal position is difficult to defend even when the underlying decision was sound. Any dismissal process should conclude with a written summary of alternatives considered and the reasons each was ruled out.
Lesson two: know your collective agreement before a dispute arises. Sector-specific collective agreements in Finland frequently modify statutory notice periods, severance entitlements, and procedural steps. International employers accustomed to relying solely on the employment contract often discover the collective agreement's relevance only at the point of dispute. The applicable agreement should be identified and reviewed at the point of hiring – not at the point of termination.
Lesson three: build the evidentiary file during the dismissal process, not after. Finnish civil procedure places the burden of proof squarely on the employer in wrongful dismissal claims. That burden is met by contemporaneous documents – meeting notes, HR assessments, written warnings, and correspondence – rather than reconstructed accounts. International employers that rely on verbal processes internally will face a much harder task when a claim is filed months later.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our employment law practice supports international companies managing workforce matters across European markets, including Finland, where the interaction between employment legislation and collective agreements requires careful handling. As a law firm in Finland advising cross-border clients, we bring both civil law analytical depth and common law procedural rigour to each matter. Our team has advised on dismissal, termination procedure, and employment contract disputes for international employers operating in Nordic and broader European markets. For a preliminary review of your employment law situation in Finland, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.