How Finnish Businesses Can Navigate Czech Employment Contracts: Essential Tips for Hiring

Are you planning to expand into Finland or hire Finnish workers? This article provides specific answers to questions about differences in employment contracts that Czech companies often underestimate. You will learn about the risks of fines and lawsuits that arise from Finland's different approach to employee protection.

 Need advice on this topic? Contact the ARROWS law firm by email office@arws.cz or phone +420 245 007 740. Your question will be answered by "Mgr. Vojtěch Sucharda", an expert on the subject.

Why Finnish employment contracts are not like Czech ones

The Finnish labor market attracts Czech companies with its stability and high productivity.

However, the Finnish Employment Contracts Act contains pitfalls that do not appear in Czech law. The biggest difference lies in the extreme protection of employees and the power of collective agreements, which often replace the law.

Czech companies often do not realize that simply copying a Czech employment contract can lead to invalid agreements and fines in the hundreds of thousands of euros.

The ARROWS law firm handles Finnish matters for Czech clients on a daily basis thanks to the ARROWS International network, which has been built up over ten years.

Our lawyers know that each sector has its own collective agreement with minimum wages and bonuses that you must comply with even when sending employees on short-term projects.

Key differences in the creation of the contract itself

In the Czech Republic, an employment contract must be in writing according to the Labor Code.

In Finland, the situation is the opposite – the law does not require a written form. However, the employer must provide written confirmation of the basic conditions by the end of the first pay period.

Czech companies often violate this rule because they rely on verbal agreements.

If an employee insists on a written contract, you must draw one up. In the event of a dispute, Finnish courts tend to interpret the contract in favor of the employee.

Failure to comply with the obligation to provide written confirmation may result in a fine of up to €15,000. For an immediate solution to your situation, write to us at office@arws.cz.

Collective agreements: A Finnish phenomenon that binds you

The biggest difference is the role of collective agreements (työehtosopimus). In the Czech Republic, collective agreements are voluntary and cover only a fraction of companies.

In Finland, collective agreements cover almost 90% of employees and set mandatory minimum conditions for wages, working hours, bonuses, and vacation time.

If your company belongs to an industry with a binding collective agreement, you must comply with it even without signing it.

Ignorance is no excuse, and violations can result in the obligation to pay wages retroactively for up to three years. Our lawyers are ready to help you – write to office@arws.cz.

FAQ – Legal tips on Finnish collective agreements

1. How do I find out if my company is covered by a collective agreement? Finnish trade unions (ammattiliitto) have an overview of all binding collective agreements according to business activity classification. Doing your own research is time-consuming and risky. Do you need a legal analysis? Contact us at office@arws.cz.

2. Can I avoid a collective agreement by hiring people on a contract basis? No. Finnish occupational safety authorities (AVI) check the actual nature of the relationship, not the form of the contract. If they find circumvention, fines and a ban on activities may be imposed. Our lawyers regularly deal with this issue – contact us at office@arws.cz.

Probationary period: Longer, but with a fixed ceiling

The Czech Labor Code allows for a three-month probationary period, while in Finland it can last up to four months.

The key difference is that the Finnish probationary period is automatically extended by the length of any sick leave or family leave taken by the employee during that time.

During the probationary period, you can terminate the employment relationship immediately, but you must have objective reasons.

Finnish courts strictly assess whether the reasons for termination are related to discrimination or health status. Unjustified termination can cost up to six months' salary.

Working hours and overtime: Stricter rules for management

Both countries have a 40-hour working week, but Finland has stricter overtime regulations.

An employee may work a maximum of 250 hours of overtime per year and 138 hours per four months. Collective agreements often reduce these limits even further.

A key difference is the Pekkaspäivät system, which reduces working hours and is included in many collective agreements.

Employees get 6–12 extra days off per year, which you need to factor into your project planning. Failure to pay overtime bonuses is a criminal offense in Finland, with fines of up to €45,000.

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Vacation: A calculation that confuses Czech companies

The Finnish vacation system is calculated from April 1 to March 31 of the following year.

Each employee is entitled to two days of vacation for each month worked in the first year, after which the entitlement increases to 2.5 days per month (a total of 30 days, including Saturdays).

This means that an employee who starts in July is only entitled to 18 days of vacation until March of the following year.

Finnish authorities calculate the days precisely during inspections, and fines for incorrect calculations can reach thousands of euros. Contact us at office@arws.cz for a customized legal solution.

Termination: The darkest chapter of Finnish labor law

The biggest pitfall for Czech companies is Finnish protection against termination. In the Czech Republic, you can give notice with two months' notice without giving a reason.

In Finland, you must always give objective and serious reasons (irtisanomisperuste) and go through a consultation process (yhteistoimintamenettely) with the unions.

The notice period depends on the length of employment: 14 days up to one year, one month up to four years, two months over four years.

Unjustified dismissal can cost you an estimated 3 to 24 months' salary, depending on your age, length of employment, and reason for dismissal.

Finnish courts reinstate hundreds of employees every year, and companies pay millions in compensation.

Posting workers to Finland: Administrative triple challenge

If you are posting Czech employees to projects in Finland, you will face a triple challenge of administrative obligations:

1. Form A1 – you must obtain this from the Czech Social Security Administration before starting work. Without it, the employee will find themselves in an illegal position during an inspection.

2. AVI notification – before starting work, you must submit a report to the Finnish Occupational Safety and Health Administration (Aluehallintovirasto). The penalty for failure to do so is automatic and high.

3. Compliance with the "hard core" – you must ensure that Finnish minimum conditions for wages, working hours, bonuses, and vacation are met. Even if a Czech employee has a higher wage, you must check whether it corresponds to the Finnish tariff.

Employing Finns in Czechia: Caution with documentation

If a Finnish citizen works for a Czech company in Czechia, the Czech Labor Code applies.

However, stricter rules apply from October 1, 2025: an employee may not start work until you have fulfilled all reporting obligations to the labor office.

The fine for illegal employment is up to CZK 3,000,000.

A Finnish employee has the right to an employment contract in a language they understand. Nevertheless, it is advisable to have a Czech version for labor inspectorate checks.

Failure to draw up a contract in Czech may be interpreted as a breach of obligations during an inspection.

FAQ – Legal tips for employing Finns in Czechia

1. Can a Finnish employee work in Czechia without a visa? Yes, EU citizens do not need a work permit. However, you must fulfill the reporting obligation to the labor office by the date of commencement. Do not hesitate to contact our office – office@arws.cz.

2. Does the contract have to be in Finnish? The law does not require Finnish, but the employee must understand the content. For legal certainty, we recommend a bilingual version. Our lawyers are ready to help you – write to office@arws.cz.

Hidden complications that a layman cannot see

At first glance, the Finnish system seems simple, but it hides procedural details that Czech companies underestimate. For example:

• Pekkaspäivät (reduced working hours) cannot be compensated with money; they are mandatory time off.
• Työtodistus (employment certificate) must be issued within ten years of the end of employment, otherwise you risk a fine.
• Yhteistoimintamenettely (negotiation) has precise time limits, which vary depending on the size of the company.
• Koeaika (probationary period) is automatically extended by maternity leave, even if the employee does not request it.

Individual steps that seem simple have hidden exceptions and connections to other regulations in the real world.

The ARROWS law firm deals with this agenda on a daily basis and can significantly reduce the time and minimize the risk of errors for the client. We are insured for damages up to CZK 500,000,000, which means a professionally secured transaction for the client.

FAQ – Frequently asked legal questions about Finnish employment contracts

1. Can I conclude an employment contract in Czech with a Finnish employee? Legally, yes, if the employee understands it. For legal certainty and inspections by the Finnish authorities, we recommend a bilingual version. We will prepare a customized version for you – contact us at office@arws.cz.

2. How quickly can I dismiss a Finnish employee who is not performing their duties? In Finland, there is no such thing as immediate dismissal without good cause. You must go through a consultation process, gather evidence, and give the employee the opportunity to express their opinion. The process takes at least 1–2 months. Do you need legal assistance? Write to office@arws.cz.

3. Does the Czech 8+8 working time system apply in Finland? No. The Finnish overtime system is strictly limited and requires the individual consent of the employee. Collective agreements often prohibit the simultaneous use of overtime and Pekkaspäivät. Our lawyers are ready to help you – write to office@arws.cz.

4. How much does it cost to violate Finnish labor law? Fines start at €1,000 for administrative errors and end at €45,000 for serious violations. Unjustified dismissal can cost up to 24 months' salary. Do not hesitate to contact our office – office@arws.cz.

5. Do I need to have a branch in Finland to employ one person there? No, you can employ someone through a foreign employer, but you must comply with all notification obligations and pay Finnish social security contributions. The process is complex and requires a Finnish identification number (Y-tunnus). Contact us at office@arws.cz for a tailor-made legal solution.

6. How does ARROWS handle cases with an international element? Thanks to the ARROWS International network, we have local lawyers in Finland and the Czech Republic who will work together on your case. We provide a complete service from contract preparation and notifications to representation during inspections. If you are dealing with a similar problem, contact us at office@arws.cz.

Don't create unnecessary problems for yourself

Finnish labor law is not a guide to drafting contracts, but a complex system where simple steps hide procedural pitfalls.

Errows in basic documents or deadlines can lead to fines that exceed the annual cost of a lawyer.

The ARROWS law firm has a portfolio of more than 150 joint-stock companies, 250 limited liability companies, and 50 municipalities and regions that we assist with international employment.

Our ten years of experience with Finnish affairs means that we are familiar with the decision-making practices of local authorities and courts.

We can connect clients with each other if they have interesting business opportunities in the Nordic countries. And we would also like to hear about your business idea.

If you don't want to risk mistakes, damages, or fines, entrust the whole matter safely to ARROWS. Just contact the office at office@arws.cz.

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