Contract of employment
In general, an employment contract is valid indefinitely. A fixed-term employment contract or a variable working time contract may only be concluded under certain conditions. It is advisable to conclude the contract in writing and in two identical copies. If the contract is verbal, prepare a written statement on the terms and conditions of the employment relationship.
Get to know also the matters you need to consider when the employment relationship terminates.
A contract of employment is concluded when you and your employee agree on the performance of work, salary and other benefits and terms of the employment relationship. You must comply with the labour legislation and the applicable collective agreements in matters concerning employment contracts.
In general, an employment contract is valid indefinitely. You may also conclude a fixed-term agreement under certain conditions, for example, if the employee substitutes for a regular employee.
You may conclude an employment contract in writing, electronically or verbally. The most recommendable option is to always conclude a written employment contract in order to prove reliably what the employer and employee have agreed upon. If you conclude a verbal employment contract, you must provide your employee with a written statement on the terms and conditions of the employment relationship.
You may conclude the employment contract in a free format, but it must always state certain things such as the employee’s primary assignments.
You may conclude an indefinitely valid employment contract also with a minor if they are at least 15 years old and have completed their compulsory education. However, you should note the restrictions that apply to work performed by persons under the age of 15.
Prepare two identical copies of the employment contract: one for you and one for the employee.
An employment contract must always state the basic information about the employer and the employee, the starting date of the employment relationship and the employee’s primary assignments. The employment contract must also state the process determining the rates of pay and the payment period, the place of work and the regular working hours. In addition, the employment contract should state the applicable collective agreement, the basis for determining annual leave and the notice period or its basis.
If the employee performs work at various locations, the employment contract should establish the principles which determine where the employee works. If the employment relationship involves a trial period, the employment contract should define its duration. If the employment contract is temporary, it must state the duration of the employment relationship and the reason for its temporary nature.
If the employment contract involves working abroad for a period of at least one month, it must state the duration of the foreign assignment and the currency in which the salary is paid. The contract must also state the monetary compensations payable abroad, the fringe benefits and the conditions governing the repatriation of the employee.
The duration of a fixed-term employment contract is strictly bound to a specific period of time. Employment contracts may also be considered temporary if their duration is restricted to performing an assignment whose duration cannot be precisely determined.
If you wish to conclude a fixed-term employment contract, you must have a justified reason for the contract’s temporary nature. However, a reason is not required if the employee wants the employment relationship to be temporary or if you recruit a long-term unemployed person for a maximum duration of one year. If you are unable to justify the temporary nature of the employment contract, the contract is considered to be valid for an indefinite term.
You may conclude a fixed-term employment contract in the case of a substitution for a regular employee, a temporary project or a non-recurring work performance. In addition, the temporary nature of an employment relationship is justified in the case of paid work placement or apprenticeship or if the work is seasonal. Furthermore, another circumstance related to, for example, your company’s operations or the assignment in question may justify the employment contract’s temporary nature.
A variable working time contract means that the number of an employee’s working hours varies within agreed limits during a specified period. The number of weekly working hours may be 0–40 or 10–30 for example. Variable working time contracts also concern on-call employees. A variable working time contract may be concluded for a fixed or an indefinite term.
You are only allowed to conclude variable working time contracts if your company’s need for workforce truly varies. You may conclude variable working time contracts for the duration of, for example, peak periods or the delivery of large orders.
Even if the employee would be provided only a small number of working hours, you may not conclude a variable working time contract if your company’s need for workforce is permanent. For example, if the employment relationship involves a regular weekly working time of five hours, you may not conclude a variable working time contract.
Furthermore, your employee’s employment contract may not state that the number of weekly working hours is 0–30 if your company’s actual need is 20–30 hours per week.
Provide your employee with a written statement on the terms and conditions of the employment relationship if the employment contract is verbal. A statement must also be provided if the minimum requirements of the employment contract are not stated in the written employment contract for any reason.
You may provide the statement with one or more documents or by referring to a law or a collective agreement applied in the employment relationship.
Provide the statement to your employee without a separate request by the end of the first payment period. A statement is not required if the duration of the employment relationship is shorter than one month.
If an employee repeatedly works in your company under the same terms and conditions in fixed-term employment relationships of less than one month, you must provide them with the statement within one month from the start of the first employment relationship. There is no need for further versions of the statement if the terms and conditions of the employment relationship do not change. However, if the employment relationship’s terms and conditions change, you must provide your employee with a written statement on the new terms and conditions without a separate request not later than by the end of the next pay period.