According to Finnish law, an employment contract must specify: * **Parties:** The employer and employee. * **Start date of employment:** When the employment begins. * **Place of work:** Where the employee's work is primarily performed. If there is no fixed place of work, this should be stated, and the employer should indicate how the place of work will be determined. * **Job duties:** The nature of the work or the job title. * **Salary:** The wage or salary and any other remuneration, and the payment period. * **Working hours:** The regular working hours or the basis for determining them. * **Probationary period (if applicable):** The length of the probationary period, if one is agreed upon. * **Notice period:** The length of the notice period or the basis for determining it. * **Collective agreement (if applicable):** If the employment is covered by a collective agreement, the contract should mention it and indicate the union that has entered into the agreement. * **Annual leave:** The basis for calculating annual leave or the number of days of annual leave.

Drafting employment contracts is an essential part of an employer's obligations, and Finnish legislation sets clear requirements for their content, even in the Helsinki region. According to the Employment Contracts Act, the contract between an employee and an employer operating in the Helsinki region must define certain key terms that protect both parties and clarify the rules of employment. A properly drafted employment contract reduces interpretive disagreements and serves as the foundation for a successful employment relationship in companies operating in the Helsinki region. In this article, we will discuss the mandatory elements of an employment contract in the Helsinki region, the consequences of their absence, and other important aspects that employers in the capital region must consider when drafting a contract.

According to Finnish law, an employment contract must specify: * **Parties:** The employer and employee. * **Start date of employment:** When the employment begins. * **Place of work:** Where the employee's work is primarily performed. If there is no fixed place of work, this should be stated, and the employer should indicate how the place of work will be determined. * **Job duties:** The nature of the work or the job title. * **Salary:** The wage or salary and any other remuneration, and the payment period. * **Working hours:** The regular working hours or the basis for determining them. * **Probationary period (if applicable):** The length of the probationary period, if one is agreed upon. * **Notice period:** The length of the notice period or the basis for determining it. * **Collective agreement (if applicable):** If the employment is covered by a collective agreement, the contract should mention it and indicate the union that has entered into the agreement. * **Annual leave:** The basis for calculating annual leave or the number of days of annual leave.

According to the Finnish Employment Contracts Act, an employee must be given a written statement of the essential terms of employment. Chapter 2, Section 4 of the Employment Contracts Act defines these mandatory details, that must be included either in the employment contract or in a separate written statement.

The employment contract or a statement attached to it must state at least the following:

• Employer's and employee's home or business location
• Start of work date
• Duration of the fixed-term contract and the grounds for the fixed term
• Probationary period (if agreed upon)
• Workplace or explanation of the principles for which the employee works at different locations
• The main content of the job duties
• Applicable collective bargaining agreement
• Salary determination basis and payment period
• Regular working hours
• Determination of annual leave
• Notice period or the basis for its determination

It is important to note that the content requirements of an employment contract may vary depending on the nature and duration of the work. Especially in fixed-term employment relationships, it is critical to justify the reason for the fixed term., such as temporary employment, seasonality, or project duration.

When must an employment contract be made in writing?

Although the law does not absolutely require a written employment contract, According to the Employment Contracts Act, the employer must provide a written statement of the essential terms of employment. no later than the end of the first payday period, if no written agreement has been made and the employment relationship continues for more than a month.

In practice, there are three ways to draw up an employment contract:

1. In writing (recommended)
2. Orally
3. Electronically

However, it must be emphasized that a written employment contract serves the interests of both the employer and the employee. It:

• Clarify the rights and obligations of both parties
• Serves as evidence in potential disputes
• Reduce the risk of misunderstandings
• Helps manage employment terms
• Facilitates the verification of employment terms later on

An oral agreement is thus legally binding, but it is more difficult to prove in disputes. For this reason, we strongly recommend always drafting a written employment contract, regardless of the length or nature of the employment relationship.

What are the consequences if mandatory information is missing from an employment contract?

Failure to comply with the provisions of the Employment Contracts Act can have significant consequences for the employer. An employer who does not provide a written statement of the essential terms of employment or provides an insufficient statement, can be fined for violating the Employment Contracts Act.

There can be several practical consequences:

• The occupational safety and health authority may issue a reprimand or a directive to correct deficiencies.
• Continued neglect can lead to a fine.
• Dispute situations with an employee become complicated when the burden of proof regarding the terms' content falls on the employer.
• An employee can claim damages if the missing information has caused them harm.

Situations where, for example, the definition of job duties or the basis for remuneration have been left unclear are particularly problematic. In dispute situations, interpretation often favors the employee., and the employer may have to pay significant compensation due to ambiguities.

To avoid these problems, it is advisable to ensure that the employment contract is carefully drafted and contains all legally required information. If necessary, we offer expert services for reviewing and updating employment contracts to meet legal requirements.

How is the probationary period defined in an employment contract lawfully?

The probationary period is an important element at the beginning of an employment relationship, and its purpose is to give both parties an opportunity to assess the conditions for continuing the employment relationship. According to the Employment Contracts Act, the probationary period may be a maximum of six months. from the start of employment.

The following legal limits must be taken into account when defining the test drive:

• The probationary period must be agreed upon in the employment contract; it is not automatically valid.
• In a permanent employment relationship, the probationary period can be a maximum of 6 months.
• In a fixed-term employment relationship of 12 months, the probationary period may not exceed half the duration of the employment contract (e.g., in an 8-month contract, the probationary period may be a maximum of 4 months).
• If an employee has previously worked for the same employer and returns to the same duties, a probationary period cannot, in principle, be applied again.

During the probationary period, the employment relationship can be terminated by either party without the usual grounds for dismissal or notice periods. However, the grounds for termination may not be discriminatory or otherwise improper.. For example, an employee's pregnancy, opinions, or union activities are not acceptable grounds for termination during the probationary period.

The probationary period begins at the start of the employment relationship and ends when the agreed-upon probationary period expires. If no probationary period has been agreed upon in the employment contract, it cannot be applied retroactively without the consent of both parties.

Can non-compete clauses be included in an employment contract?

Non-compete clauses have become common in the workplace, but their use is significantly restricted by legislation. The amendment to the law that came into effect at the beginning of 2022 further tightened the conditions of non-compete agreements..

According to the Employment Contracts Act, there must be a particularly weighty reason for entering into a non-competition agreement, related to the employer's operations or the employment relationship. Such reasons may include, for example:

• Protection of trade and professional secrets
• Employer-funded special training
• Employee's position and duties that provide access to competitively important information

Under current legislation, restrictions on non-compete agreements:

• A non-compete clause can restrict an employee's right to enter into a new employment contract or practice a profession for a maximum of one year after the termination of employment.
• The employer must pay compensation for the non-compete period:
  • For a suspension of up to 6 months: at least 40% of salary for the duration of the suspension
  • For a non-compete period of more than 6 months: at least 60% of salary for the duration of the non-compete period
• A non-compete agreement is not binding on an employee if the employment relationship ends for a reason attributable to the employer.

A non-compete agreement must always be made in writing. And its terms must be reasonable. If a non-compete agreement has not been drafted in accordance with the law, it may be deemed invalid or it may be amended by a court decision.

Regarding non-compete clauses, we always recommend careful consideration and, if necessary, expert assistance in drafting them, so that they are both lawful and effective in protecting the company's needs.

Statutory Requirements of Employment Contracts – Key Things to Remember

There are certain key points that every employer should remember when drafting a successful and lawful employment contract. Following these principles will help avoid most employment contract disputes.

The three most critical things to consider are:

1. Clarity and coverage: The employment contract must clearly state all information required by law. Ambiguities are often interpreted to the employer's detriment in dispute situations.
2. Written form Although an oral agreement is legally valid, a written agreement is always recommended for evidence and clarity.
3. Considering collective bargaining agreements: The employment contract must mention the applicable collective agreement, and the terms of the contract cannot be less favorable to the employee than the provisions of the collective agreement.

Practical tips for drafting an employment contract:

• Use clear and understandable language
• Define the job responsibilities with sufficient accuracy, but allow for flexibility in task development as needed.
• Ensure that salary and other compensation are clearly defined
• Regularly update contract templates to comply with current legislation

At Töölön Viree, we help companies in the Helsinki region draft up-to-date and legally compliant employment contracts. Our experts ensure that your company's employment contracts meet all legal requirements. while also serving your company's needs. Our employment law services cover all aspects of employment contracts comprehensively in the Helsinki region, and we ensure that your employer obligations are met in all situations.

With the right expert knowledge, an employment contract becomes a document that is both legally compliant and practically functional, protecting the rights of both the employer and the employee and promoting a functional employment relationship. Contact our experts So today, get your employment contract matters in order in the Helsinki region!