Termination of employment terminates the employment relationship immediately and without notice. Termination is based on a fault on the part of the contracting party, such as a material breach or neglect of obligations. Since termination is a more drastic way of ending an employment contract than dismissal, it is only possible if there are very good grounds for doing so.
The form of the employment relationship is irrelevant - both employment contracts of indefinite duration and fixed-term contracts can be terminated. There are three different grounds for termination: probationary leave, for very serious reasons or for unauthorised absence of more than seven days (the article on unauthorised absence you can read here). In recent case law, the grounds for an employer's probationary leave have been challenged on grounds such as discrimination. It is advisable for companies to consult a lawyer on termination of employment before proceeding with the termination. If the employer makes a mistake, the result can be substantial and severe liability for damages.
Probationary period
The probationary period is a period of up to six months agreed at the beginning of the employment relationship, during which both the employer and the employee can terminate the employment contract with immediate effect. In fixed-term contracts, the probationary period, including any extensions (e.g. for family leave), can be up to half the duration of the contract, but not more than six months. When concluding an employment contract, the employer must explain to the employee how the collective agreement affects the probationary period if the employer is bound by it. From the employer's point of view, the purpose of the probationary period is to give an opportunity to assess whether the employee is suitable for the envisaged tasks and whether his/her skills are adequate. If this is not the case, the employer has the right to terminate the employment relationship during the probationary period. However, the employment contract may not be terminated for discriminatory or other inappropriate reasons in relation to the probationary period. Assessing suitability for the job takes time and requires starting work, as the employer cannot make decisions about the worker's suitability on the basis of a short period of work. Since the purpose of the probationary period is to assess the performance of the other party, productivity and economic reasons are not legal grounds for a probationary break. If necessary, the employer must be able to prove that there are justifiable reasons for the termination. Acceptable reasons for termination may include, for example, shortcomings in the performance of the work (such as poor quality of work or unauthorised absences) or general unsuitability of the employee for the job (such as lack of cooperation or inappropriate behaviour). A notice of termination of employment must be given and the employment must end within the probationary period. If the employee is absent from work during the last days of the probationary period, the notice of termination may be sent to him/her by registered letter. If the letter is posted before the end of the probationary period, the ground for termination has been invoked in due time.
Termination of employment contract for very serious reasons
The employer may only terminate the employment contract without notice for very serious reasons. A very serious reason to terminate the employment relationship arises when the employee essentially fails to fulfil or breaches an obligation arising from the employment contract or the law in relation to the employment relationship, then in earnest in such a way that the employer cannot reasonably be expected to continue the contractual relationship until the end of the agreed period of employment or even for a period of notice.
Examples of dissolution criteria
The employer may terminate the contract if the circumstances do not require a different assessment, in particular in the following cases, where the employee:
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- has misled the employer in a material respect when concluding the contract,
- negligently endangers safety at work, or is intoxicated or uses prohibited substances at work,
- grossly insults the honour of the employer, the employer's family, a substitute or a colleague, or uses violence against them,
- is in serious breach of confidentiality or of the rules on competition,
- is permanently unable to perform his or her duties, or
- intentionally or negligently fails to comply with his/her work obligations and continues to do so despite a warning.
For the termination criterion to be met, the employee's conduct must cause such a serious breach that he or she cannot reasonably be expected to persist in the breach, even for the period of notice. If the negligence or breach of the employee's obligations is very serious, the ground for termination may arise as a result of a single breach. It is always advisable to check the seriousness of the reason with an expert before terminating the employment relationship.
The right of withdrawal must be exercised quickly
The right of termination ceases to exist if the employment contract is not terminated within 14 days of the employer being informed of the grounds for termination. The time is calculated from the moment the employer was informed of the reason for termination. After this 14-day period, the ground can still be used to terminate the contract, but this is a termination and the notice period must be observed.
Consultation and notification of the winding-up notice
The employee must be consulted before a notice of termination is given for probationary periods or for very serious reasons. The employee must be given the opportunity to ask to be accompanied by an assistant at the hearing. The notice of dismissal must be given in person whenever possible. Only when the employee cannot be reached may it be sent electronically or by registered mail to his or her home address. In such cases, the employee shall be deemed to have received the notice no later than the seventh day after the letter is sent.
Amos Attorneys at Law Oy
www.amoslaki.fi