The transitional period for non-competition will end at the beginning of next year
An amendment to the law stating that 40% of the employee's salary must be paid as compensation for the limitation period of the non-compete obligation, if the limitation period is 6 months and 60% of the employee's salary, for a limitation period of 6–12 months, entered into force at the beginning of 2022.
In the case of non-compete agreements concluded before 2022, there has been a transitional period ending at the turn of the year. These prohibitions of competition can be terminated without a period of notice until the end of the year. After the turn of the year, the limitation period under these old non-compete agreements must also be compensated in accordance with the law.
The aim of the amendment was to curb the use of non-compete bans, which were very widespread without legal justification. Before the change in the law, the situation was in practice that in many employment contracts the prohibition of competition had been imposed, as a precautionary measure, without any further consideration as to whether its use was lawful and appropriate.
More information:
Read the article in the Loimu member magazine: An important change in the law will bring compensation to the employee for non-compete
See the member pages for a recording in Finnish: More information about non-compete (login required)