Legal Alerts/19 Dec 2025

Finland Lowers Termination Threshold for Person-Related Grounds – Effective 1 January 2026

The Finnish Government has approved significant amendments to labour legislation that will considerably lower the termination threshold for person-related grounds.

What is changing and who is affected?

The main amendment allows employers to terminate an employee based on a proper reason (asiallinen syy), removing the current requirement of a weighty reason (painava syy). The assessment will focus on whether termination is a reasonable consequence for the employee's conduct. The grounds cannot be minor or arbitrary, but the threshold for termination will be reduced.

Employers will no longer be obligated to find alternative work for employees terminated on person-related grounds, except when termination is due to decline in working capacity, such as illness or disability.

The reduced threshold primarily affects employers whose collective agreements lack specific termination provisions. Where collective agreements require proper and weighty grounds, those provisions take precedence and may limit the legislative amendments' applicability.

All other procedural requirements and prohibited grounds for termination remain unchanged. Changes are not made to economic or production-related terminations, which continue to require proper and weighty grounds.

Obligation to issue warning remains unchanged, but significance increases

A warning must be issued before termination, ensuring employees have an opportunity to correct their actions. The exception remains: if the breach is so serious that continuing employment is unreasonable, termination without prior warning is permitted. However, the new lower termination threshold applies only when a warning has been issued.

The lower termination threshold also means a lower warning threshold. Employers should warn employees of breaches that, if repeated, could meet the new proper termination threshold. Warnings should explicitly reference the risk of termination if conduct recurs.

Entry into force and transitional rule

The amendments will enter into force on 1 January 2026.

If the employee's conduct forming the termination ground occurred by 31 December 2025, current law (requiring proper and weighty reason) applies. The conduct must relate to actions occurring after 1 January 2026 for the lower threshold to apply. The new rules apply also to situations, where the conduct has begun before but continues after 1 January 2026.

Action points for employers

Review termination practices: Review and update practices and decision-making frameworks to reflect the new “proper reason” standard, where needed. Ensure reasons are not trivial, arbitrary, or discriminatory, and apply termination policy consistently.
Maintain warning procedures: Issue written warnings with explicit reference to termination risk and provide employees opportunity to correct their actions.
Note the transition rule: Ensure conduct forming the basis for termination under the new termination threshold occurs after 1 January 2026.
Act immediately after 1 January 2026: The obligation to treat employees equally in same or similar situations remains in force without amendments. Consequently, implement the new standard consistently from the outset to avoid creating a higher internal threshold for terminations through practice.

For questions concerning the new termination threshold, please contact the undersigned or other members of our Employment team.

We are organising a webinar on new developments, including the new termination threshold, on Tuesday, 20 January 2026 at 10:00 a.m. (in Finnish). Register by contacting seminars@borenius.com.