Establishing compliant employment relationships in the Aland Islands requires a clear understanding of local labor law, which is largely based on Finnish legislation due to the region's autonomous status within Finland. A well-drafted employment agreement is fundamental, serving as the legal basis for the relationship between an employer and an employee. It outlines the terms and conditions of employment, ensuring clarity and protecting the rights and obligations of both parties.
Employment contracts in Aland can be agreed upon verbally, in writing, or implicitly through the parties' actions. However, a written contract is highly recommended to avoid disputes and provide clear documentation of the agreed terms, especially regarding mandatory provisions required by law.
Types of Employment Agreements
Employment agreements in the Aland Islands are primarily categorized based on their duration: indefinite or fixed-term.
- Indefinite-Term Contracts: These are the standard form of employment contract and continue until terminated by either party according to the legal requirements for notice or grounds for termination. Unless explicitly agreed otherwise, an employment contract is considered indefinite.
- Fixed-Term Contracts: These contracts have a specified end date or are tied to the completion of a specific task or project. Fixed-term contracts can only be concluded for a justified reason. Examples of justified reasons include temporary work needs, project-based work, or substituting for an absent employee. Concluding successive fixed-term contracts without a justified reason is generally prohibited and can lead to the contract being considered indefinite.
| Contract Type | Duration | Justification Required? | Standard Form? |
|---|---|---|---|
| Indefinite-Term | Continues until terminated | No | Yes |
| Fixed-Term | Specified end date or task completion | Yes | No |
Essential Clauses
While a written contract is not strictly mandatory for all employment relationships, employers are legally required to provide employees with written information on the key terms of employment if the employment lasts longer than one month and the agreed working time is more than an average of three hours per week. This information must be provided within seven days of the employee starting work. The written contract or statement must include, at a minimum, the following details:
- Names of the employer and employee, and their domicile or place of business
- Date of commencement of employment
- Date of conclusion of the contract
- The employee's primary place of work or, if the employee has no primary place of work, clarification of how the employee works in different locations or is free to determine their places of work, and clarification that the employee is working in different locations or is free to determine their places of work
- The employee's main duties
- The collective agreement applicable to the work
- The grounds for determining remuneration and the pay period
- Regular working hours
- How annual holidays are determined
- The notice period or the method for determining it
- Clarification that the employer pays social security contributions for the employee and the social security protection provided by the employer
- If the employment is for a fixed term, its duration and the justified reason for the fixed term
- If the employee is hired for a fixed term of more than 12 months, the terms under which the employee may be offered training provided by the employer
- If the employee is working abroad for a period of at least one month, the country or countries where the work is performed, the duration of the work abroad, the currency in which monetary remuneration is paid, any monetary benefits or benefits in kind related to working abroad, and the terms for repatriation
Probationary Period
A probationary period (koeaika) can be agreed upon at the beginning of the employment relationship. Its purpose is to allow both the employer and the employee to assess the suitability of the employment relationship.
- The maximum duration of a probationary period is generally four months.
- In fixed-term contracts lasting less than 12 months, the probationary period can be a maximum of half the duration of the contract, but not exceeding four months.
- If the employer provides specific training to the employee related to the work, the probationary period can be extended to a maximum of six months.
- During the probationary period, the employment contract can be terminated by either party with immediate effect. However, termination during the probationary period must not be based on discriminatory grounds or other improper reasons unrelated to the purpose of the probationary period.
Confidentiality and Non-Compete Clauses
Confidentiality and non-compete clauses are permissible in employment contracts but are subject to legal limitations to protect employees' rights.
- Confidentiality Clauses: These clauses are generally enforceable and require the employee to keep confidential information learned during their employment secret. The obligation typically continues even after the employment ends.
- Non-Compete Clauses: These clauses restrict an employee's ability to work for a competitor or start a competing business after their employment ends. Non-compete clauses are only valid if there is a particularly weighty reason related to the employer's operations or the employee's position. Such reasons might include the employee having access to trade secrets or having a key customer relationship. The restriction can last for a maximum of six months after the employment ends. If the employee is paid reasonable compensation for the restriction period, the maximum duration can be 12 months. Non-compete clauses are not typically valid for employees in ordinary positions.
Contract Modification and Termination
Modifying an existing employment contract requires the agreement of both the employer and the employee. Unilateral changes to essential terms by the employer are generally not permitted unless they constitute a termination of the existing contract followed by an offer of new terms, subject to the legal requirements for termination.
Termination of an indefinite employment contract by the employer requires a just and weighty reason. Reasons related to the employee's person (e.g., breach of duties) or reasons related to the employer's operations (e.g., redundancy) may justify termination. Specific notice periods apply, the length of which depends on the duration of the employment relationship.
| Duration of Employment | Employer's Notice Period | Employee's Notice Period |
|---|---|---|
| 0-1 year | 14 days | 14 days |
| 1-4 years | 1 month | 14 days |
| 4-8 years | 2 months | 1 month |
| 8-12 years | 4 months | 1 month |
| Over 12 years | 6 months | 1 month |
Fixed-term contracts generally terminate automatically at the end of the agreed term or upon completion of the specified task, without a separate notice period. However, fixed-term contracts can be terminated prematurely only on the grounds that would justify immediate termination of an indefinite contract (summary dismissal) or if such a possibility was explicitly agreed upon in the contract.
