Selection order for dismissals and layoffs in detail

There is no statutory selection order for dismissals under Finnish law as such, but the law lays down a minimal number of rules regarding the order in which an employer may dismiss its employees on financial and production-related grounds. These are: 

  • The redundancies must target those whose work actually diminishes.
  • An employer’s right to dismiss shop stewards, industrial safety delegates and employee representatives is strictly limited (they are usually the last to be dismissed).
  • Decisions regarding the selection of an employee to be dismissed cannot be discriminatory or contrary to equal treatment.

In addition, it is not permissible to dismiss employees who are on a protected form of leave (e.g. maternity leave).  

In addition, several collective agreements contain provisions to the effect that length of service should be taken into account in selecting employees. Similarly, employees whose vocational skills and other abilities are important to the business and those who have lost part of their working capacity must be the last to be dismissed by the employer. 

Infringement of the dismissal order set out in a collective agreement does not result in a termination being void. If an employer bound by a collective agreement violates a provision on dismissal order, a fine of up to EUR 31,100 may be imposed and will be payable to the union that is party to the collective agreement. However, this does not happen very often.

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Author: Dittmar & Indrenius

Date: December 2019