Dismissing an employee will be easier in the future
Loimu is very worried about the weakening of the employee’s legal protection as dismissal on personal grounds is made easier. Making dismissals easier should be offset by increasing the compensation to be paid by the employer for unlawful dismissal.
The Government has submitted a proposal to Parliament to amend the grounds for dismissal related to an employee’s person. The amendments are expected to enter into force on 1 January 2026. Loimu issued a very critical statement on the proposal during the preparation of the legislative proposal.
The Government’s proposal is to amend the generally accepted principle of employee protection in labour law, with the justification being ‘to remove barriers to employment and, in particular, to strengthen the operating conditions of SMEs’. However, the change will apply to all employees, regardless of the employer’s size and sector.
In the future, “appropriate cause” will suffice to dismiss an employee, and the reasoning for the legislative proposal explicitly states that the purpose is to lower the threshold for dismissal. At this stage, however, there is no detailed information about what lowering the threshold for dismissal means in terms of its practical application in working life situations. This brings increasing uncertainty about the employee’s legal position for several years to come. Until a broader body of case law on the application of the law is established, the situation is very unclear.
In the further preparations, a few additions/deletions were made to the legislative proposal; for example, the previously planned simplification of the warning procedure was kept at the level of the current law. This is highly justified from the perspective of the employee’s legal protection.
However, the proposal still does not contain sufficient balancing elements for the employee. In this context, for example, the compensation that an employer has to pay if they act unlawfully was not examined. Compensation for unjustified termination of employment under the Employment Contracts Act is currently low, based on its practical application. The European Committee on Social Rights has considered that the Finnish State has violated the requirements of Article 24 of the revised European Social Charter, as the employment relationship of an unlawfully dismissed employee does not need to be restored and the compensation paid for unlawful dismissal has been set at a maximum of 24 months’ salary*.
Making dismissals easier should at least be offset by increasing the compensation to be paid by the employer for unlawful dismissal.
*Finnish Society of Social Rights vs. Finland CC 106/2014.