Legal Alerts / 28 Sep 2015

Legal Alert – The Finnish Supreme Court Issued Two Precedent Rulings on Consecutive Fixed-Term Employment Contracts

The Finnish Supreme Court has given two new rulings regarding successive fixed-term employment contracts. Both cases concerned deputy contracts that had been made one after another i.e. as chained fixed-term contracts. In both cases the Supreme Court ruled that the chained fixed-term contracts did not fill the required criteria under the Employment Contracts Act.

An employment contract is valid indefinitely, unless it has been made for a specific fixed term for a justified reason. Contracts made for a fixed term on the employer’s initiative without a justified reason are considered to be valid indefinitely. It is prohibited to use consecutive fixed-term contracts when the number or total duration of fixed-term contracts or the totality of such contracts indicates a permanent need of labour.

In the case KKO 2015:64 the plaintiff had worked between August 2005 and September 2010 in the service of the City of Kuusankoski and later, due to fusion of the cities, at the City of Kouvola under 22 consecutive fixed-term employment contracts. Aside from the first contract and the two last ones, all of the contracts were based on deputyships on behalf of named persons. The court stated  e.g. the following facts in favour of demand for labour; the similarity of the plaintiffs work duties throughout his employment, the duration of the fixed-term agreements, the number of fixed-term agreements and persons the plaintiffs deputyship had been based on, and the situation as a whole. The court considered the employment to be permanent and ordered the employer to pay compensation, severance pay, and holiday bonuses to the plaintiff.

In the second case KKO 2015:65 the plaintiff had worked between June 1995 and January 2012 in the service of the Federation of Municipalities as a food worker under 64 consecutive fixed-term employment contracts. In 1999, the employer introduced a new requirement of competence which the plaintiff did not meet. Since then the employer had also used deputyship as grounds for the fixed-term contracts. Despite the request of the employer, the plaintiff had not completed the vocational apprenticeship provided by the employer in order to fulfil the requirements. As in the previous case, the court stated e.g. the following facts in favour of demand for labour; the similarity of the plaintiffs work duties throughout his employment, the duration of the fixed-term agreements, the number of fixed term agreements and persons the plaintiffs deputyship had been based on, and the situation as a whole. The employer had informed the plaintiff that the employment would have become permanent if the plaintiff had completed the vocational apprenticeship. The court considered the employment to be permanent and ordered the employer to pay compensation, severance pay, and holiday bonuses to the plaintiff.

These two new precedents further highlight the importance of taking into account the legal criteria for fixed-term employment contracts by employers when using consecutive fixed-term contracts. However, the stability of the demand for labour and the qualified criteria for fixed-term contracts is still interpretable.

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