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Aland Islands

Termination and Severance Policies

Learn about the legal processes for employee termination and severance in Aland Islands

Notice period

In the Ă…land Islands, the Act on Employment (Ă…land FS 2017:1) governs the notice periods for employment termination.

Minimum Notice Periods

The Act stipulates minimum notice periods based on the length of an employee's service:

  • For less than one year of service: One month
  • For one year to six years of service: Three months
  • For over six years of service: Six months

These minimums are applicable unless a longer notice period is specified in the employment contract or a collective agreement between the employer and the employee union.

Exceptions to Notice Periods

There are certain situations where the statutory notice period may not be applicable:

  • In case of gross misconduct: If an employee is involved in severe misconduct that justifies immediate dismissal, the notice period can be bypassed.
  • Mutual agreement: The employer and employee can mutually agree to waive or shorten the notice period.

It's important to note that the responsibility lies with the employer to provide proper written notice of termination, specifying the end date of employment based on the applicable notice period.

Severance pay

Severance pay, also known as termination pay, is not a compulsory entitlement under the employment law of the Ă…land Islands. However, there are certain situations where an employee might be eligible for such compensation.

No General Statutory Right

The Ă…land Islands Act on Employment (Ă…land FS 2017:1) does not specifically mandate severance pay for most types of employment termination.

Potential Scenarios for Severance Pay

There are a few circumstances where severance pay might be applicable:

  • Contractual Agreements: If the employment contract explicitly mentions an entitlement to severance pay under certain termination scenarios.
  • Collective Bargaining Agreements: Some collective agreements between employers and unions might include clauses that provide for severance pay (Ă…land FS 2017:1 Chapter 7, Section 7 § 7).
  • Unjustified Dismissal: Employees might have the right to seek compensation if they are subjected to an unjustified dismissal. However, this is determined on a case-by-case basis through legal proceedings and is not considered a standard severance payment.

Important Considerations

  • Severance pay, when applicable, is separate from regular salary or accumulated vacation allowances.
  • The reasons for termination and the terms outlined in the employment contract or collective agreement, if any, will significantly influence whether and how much severance pay an employee might be entitled to.

Termination process

The termination of employment in the Aland Islands is governed by the Ă…land Islands Act on Employment (Ă…land FS 2017:1).

Types of Termination

There are two main types of termination:

  1. Resignation by Employee: Employees are required to provide a written notice of resignation in accordance with the stipulations in their contract or collective agreement.

  2. Dismissal by Employer: The employer can initiate the dismissal process due to objective grounds such as economic, technological, or organizational reasons for downsizing or restructuring. Dismissal can also be due to employee-related grounds such as an employee's inability to perform duties or gross misconduct.

Formal Notice of Termination

The employer is required to give a formal written notice of termination. This notice should contain the end date of employment, which must comply with the applicable notice period. If the termination is initiated by the employer, the notice must clearly state the grounds for dismissal.

Consultation and Negotiation

If the company employs five or more employees, the employer may be required to consult with employee representatives or unions regarding the termination. In cases of collective redundancies or changes impacting employees, the employer must engage in negotiations in good faith.

Finalization of Employment

The employment relationship ends on the date specified in the termination notice. The employer must ensure all final salary payments and accrued vacation allowances are settled, according to contractual or legal requirements.

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