The Finnish government is moving forward with plans to make it easier for companies to dismiss employees but Yle’s sources report that disagreements within the coalition have led to changes in the draft law. The National Coalition Party (NCP) and the Finns Party have not seen eye to eye on whether “underperformance” should be explicitly listed as grounds for termination.
Published: 08/09/25 | 18:58
Prime Minister Petteri Orpo’s (NCP) cabinet has been preparing a bill to lower the threshold for employers to dismiss staff. However, according to Yle the controversial proposal to allow dismissal due to underperformance was taken out of the draft after it was circulated for consultation in the spring.
The Finns Party in particular opposed the inclusion of such a clause. Finance Minister Riikka Purra told the party’s June congress that “only dismissal grounds that can be proven without dispute should be written into the law.”
A government insider noted that a ministerial working group has now signed off on the draft which will next be polished by special advisers and civil servants. It has not been verified whether the underperformance clause will be reworded or dropped entirely.
The government has also stated its intention to reform employment legislation to encourage hiring by reducing risks for employers. At present, companies can only dismiss an employee for “factual and weighty reasons.” According to the government this strict requirement can discourage recruitment so it wants to revise the wording to allow termination if there is a “fact-based reason.”
Trade unions have strongly opposed the idea warning that it would undermine employee protections.
It is also indicated that the NCP and the Finns Party have clashed over whether the draft aligns with the coalition programme agreed upon when the four-party government took office in summer 2023. The programme states that “The regulation concerning grounds for termination will be amended so that in future sufficient grounds for dismissal will be based on proper justification.”
The dispute between the coalition partners became evident during the consultation stage. Normally, government parties settle their differences before sending proposals to stakeholders but in this case the draft was circulated without internal consensus.
