What to Watch for In A Work Contract in Finland
Work contracts, also known as employment agreements, are contracts between an employer and employee. A work contract can be written or oral, but it is advisable for both parties to have a written contract before starting a working relationship. This can be important for immigrants who wish to stay in Finland and work, as well as understand different types of work relationships and the visa requirements associated with them.
Employers contact details
The employer's contact details should be included in the work contract. This includes the original name of the company, phone number, address and the VAT ID ( Y-tunnus). The name of an employer may differ from the name of a place where you are working; this must be explained to you by your employer. Sometimes employers have rental agreements that let you sign an agreement that differs from the actual employer who hired you and where you are physically working at. You are working for a rental company, not your actual employer where you perform your duties. These contracts are used in many service sector industries such as stores, restaurants, hotels, construction companies and rent companies.
Employees contact details
Employers will want to verify your identity and to know your contact details, such as your name, phone number, address and personal ID number. The personal ID as well as the bank account information is necessary in order to have a work contract. Employers must pay withholding tax for a foreign worker. You must register with the Finnish tax office and other government agencies in order to work here. Please remember that most Finnish business owners are unfamiliar with employment practices and may be reluctant to hire their first employee because of the considerable amount of paperwork involved and the cost of hiring an employee.
For foreign employees, the most common way to be paid is through a Finnish bank account. The employer will transfer the money to the employee's account directly; this is the most preferred option and not only for convenience but also for tax purposes. However, if a bank makes it difficult to open an account or make payments, an employer may be able to pay them in cash instead. The employee must get a pay slip from their employer and sign that they have received their salary in cash; this proves that they have been paid by their employer.
Validity, worktime and tasks
It is important to note that a fixed-term contract cannot be drawn up in Finland indefinitely from the same employer. This is why it should say whether the contract is continuous ( toistaiseksi voimassaoleva) or fixed-term ( määrä-aikainen). Temporary contracts are usually made when the work is seasonal, or it requires a substitute. It must be noted the length of time for which the contract is fixed, as well as why it is temporary.
Worktime is also important to include in a contract. Are you working from Monday to Friday? Is your work mostly in the mornings, daytimes, or evenings? Do you work only at weekends, or do you work at other times too? If you are part-time, you may get extra pay for evening shifts, nightshift work and/or weekends. The employer cannot change your work shifts without both of you agreeing. Also, if you are paid by the hour, the employer cannot deduct time from your pay unless you give consent.
It is also important to mention any specific tasks in the contract. Union labor law specifies the minimum income that employees should earn based on the type of task they perform and whether they work in the service sector or welfare sector. For example, a person who works as a cleaner might belong to PAM, a service union for employees working in the service sector, or to JHL, a service union for employees working in the welfare sector.
Depending on the nature of your business, you might be paid hourly, daily, or monthly. Hourly salaries are mostly given to part-time or temporary employees in the service sector. In sales, commissions are often given in lieu of a set salary. Commissions are based either on a percentage of gross income, fixed amounts per sale, or both. This type of payment structure is used for sales jobs such as telemarketers, real estate agents and consultancy workers as well as project-based work. It promotes functional performance and cooperation as opposed to time spent working.
Trial period and notice of termination
Normally, a trial period is about six months, and both of you can terminate the contract without notice. The contract at the trial period can be terminated regardless of if the contract is fixed term or continuous. However, if the contract is fixed term, the work trial should be half of the length of the fixed period.