Helsinki, Finland – The Finnish parliament’s Employment and Equality Committee has approved the government’s plans to lower the threshold at which employers can terminate employment contracts. This move comes amid widespread criticism from opposition parties.
Under the government’s proposal, the law will be amended to make “just cause” sufficient for terminating an employment contract. This contrasts with the current law, which requires the cause to be both just and “significant.”
Improving conditions for small businesses
The chairman of the committee, Arto Satunen (a former labor minister from the National Coalition party), justified this reform by saying that it was primarily aimed at improving the working conditions of small and medium-sized enterprises.
Satunen told a news conference on Thursday that lowering the threshold would make small businesses more willing to hire employees. He explained that Finland’s dismissal threshold is “the fifth highest among OECD countries.”
Suttonen emphasized that the reform does not mean arbitrary dismissal: “There is still a substantive reason required. So it is certainly not about dismissal based on personal preferences.” However, he noted that only “several years of legal practice” will determine the law’s practical impact.
The opposition warns against a “shoot-to-shoot law”.
Opposition parties strongly criticized this proposal, describing it as an “arbitrary dismissal law”.
The opposition vice-chair of the committee, Laurie Lilley of the Social Democratic Party, argued that there was no evidence the legislative change would improve employment prospects. Lilley stated, “It’s simply about weakening employee protections without any assessment of the real impact. No one can now determine how much the dismissal threshold will be lowered.”
She added that this change constitutes “a vulnerability that affects the entire labor market. This severely impacts the most vulnerable groups – young people, women, and those working in low-wage jobs.”
The committee also issued a unanimous statement emphasizing the need to closely monitor the law’s impact on employees taking maternity and parental leave. This will continue until 2028.
The bill will now be sent to the main chamber of parliament for a vote. It is expected to be passed into law as early as the beginning of next year.
