The Supreme Court Precedent on Transfer of Undertaking and Termination of Employment Relationship
- Finland
- 10/13/2008
- Roschier, Attorneys Ltd. - Finland
The Finnish Supreme Court has rendered a decision (KKO:2008:88, 17 September 2008) concerning employer’s liability for termination of employment in connection with a transfer of undertaking. According to Chapter 1 section 10 of the Finnish Employment Contracts Act, all employment relationships in force at the time of the transfer shall automatically transfer to the transferee.
This matter concerned a situation where the provider of municipality day-care services changed on account of a public procurement procedure. The new service provider had not employed two of the six employees whose employment relationships were terminated by the previous service provider. The Supreme Court found that since day-care services is a labor-intensive branch, the conditions of a transfer of undertaking were fulfilled only after the new service provider had employed majority of the previous service provider’s employees. The transfer of undertaking had thus occurred after the new service provider had already commenced its operations and therefore the previous service provider had had justified reasons to terminate employments when its operations had ended.
