For an increasing number of people, work is no longer tied to a specific time or place. Technology has made it possible to work at any time of day and equally well whether at the office or a cabin in the woods. More and more workplaces value the result of work over working hours, and responsible employers are also looking to make it easier to combine work with family life. The new Working Hours Act entering into force in Finland from the start of 2020 offers employers and employees tools to find solutions tailored to their individual workplaces.
25.11.2019
Finland’s New Working Hours Act – New Tools for a New Decade
Mikko Hanni
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Flexible Work Lets the Employee Decide
One of the most significant reforms is the flexible working hours system. In this new system, the employer and employee agree a working hours clause stating that the employee is free to choose the time and location for at least half of the working hours. This model is a good fit, for example, for expert positions in which the employer defines the goal, but the employee decides where and when they work to achieve that goal. By contrast, the flexible working hours model is not well suited to customer service or factory work where the employer dictates the time and place for work.
Working Hour Reserve for Working Hours, Benefits and Free Time
The second major reform is the introduction of working hour reserves. Reserves are a way to integrate work and free time in which employees can save up and combine working hours, free time and monetary benefits converted into free time. The employer enters into an agreement on adopting a working hour reserve with the employees’ representative, but each employee can decide independently whether to transfer items into the reserve. If the working hour reserve allows it, the employee can transfer additional hours and overtime hours; flexitime hours (within the limits set by the act); unpaid evening, night and Sunday work hours based on collective bargaining agreements; as well as other benefits converted into working hours into the working hour reserve.
Changes to Flexitime Accrual and Periods
The regulation of flexitime is also changing. As of the start of 2020, the accrual of overrun hours cannot exceed 60 hours and over a four-month period, and the shortfall cannot exceed 20 hours over the same period. The maximum overrun and shortfall under the current act is 40 hours. Furthermore, the daily flexitime limit has been extended from three hours to four hours, and the evening flexitime period can be separate from the rest of the working day, for example from 20:00–22:00. It is worth noting that in many respects national labour market organisations can establish different flexitime arrangements in collective bargaining agreements.
Extension of Regular Daily Working Hours Increased to Two Hours
Employers and employees can agree on a maximum extension to daily working hours of two hours, unless prevented by a collective bargaining agreement. For example, the working time could be 6 hours one day and 10 hours another, but the working hours have to balance out to a maximum of 40 hours over a four-month period.
Flexible working time solutions that can be tailored to the individual workplace can help companies attract and retain the best talent. At best, flexible solutions can provide a competitive edge. It is worth keeping in mind, however, that there are prerequisites and limits for local working hour solutions, and it is worth double-checking what they are from the new act or from an employment law specialist.
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Latest references
VR – Supreme Court decision clarifies working time practices
We successfully represented VR Group before the Supreme Court in a case concerning the meal break practice of commuter train drivers. On 6 February 2026, the Supreme Court ruled in VR’s favour (decision KKO:2026:12), confirming that VR had the right to amend the commuter train drivers’ meal break practice in 2021 by rendering the break unpaid in accordance with the applicable collective agreement. This decision clarifies the interpretation of collective agreements and employment legislation as well as the limits of the employer’s right to direct work. Over 250 commuter train drivers challenged the unpaid meal break practice which VR introduced in April 2021. Before the change, meal breaks had a long history of being paid. The change was based on the train drivers’ collective agreement, which allows for meal breaks to be organised either as paid or unpaid time. The Supreme Court ruled that the scheduling and managing of breaks falls within the core area of the employer’s right to direct work. This increases the threshold for an established practice becoming a binding condition for the parties. Merely following a practice consistently and over a long period of time does not make the practice binding; instead, the employer’s intent to commit to the practice must be clearly evident from the employer’s conduct or other circumstances. As both alternatives – paid and unpaid – for organising meal breaks had been retained in the collective agreement despite other amendments over the years, it could not be considered that VR had intended to commit to the paid break practice and waive its right to direct work as regards break scheduling. It was also significant that the employment contracts explicitly referred only to the collective agreement as regards working time. The Supreme Court deemed that the employees’ paid meal break was not an established term of employment and that VR was entitled to change the practice based on the collective agreement. The employer had the right, by virtue of its right to direct work, to unilaterally change the meal break practice by choosing to apply the other arrangement permitted by the collective agreement.
Case published 3.3.2026
Life Finland – Administration of bankruptcy estate
Life Finland Oy, a retailer of natural products, other health-related products and cosmetics, filed for bankruptcy on its own initiative in June 2025, and our attorney, counsel Elina Pesonen was appointed administrator of the bankruptcy estate. Life Finland Oy was part of the international Life Group, and its parent company Life Europe AB was declared bankrupt in Sweden in June 2025. When declared bankrupt, Life Finland Oy had over 30 operational stores and almost 170 employees across Finland. In addition to the premises of the operational stores, the company had several other leased premises, such as retail premises it was vacating as well as office and warehouse spaces. The bankruptcy estate organised clearance sales in all of the company’s stores. The shutdown of the stores and the clearance sales were efficiently carried out in approximately two weeks in cooperation with the company’s country manager, regional managers and sales staff. The clearance sales yielded a significant liquidation result, and consumers bought nearly the entire inventory. The administration of the bankruptcy estate has required expertise in many areas. The proceedings have dealt with specialised issues such as cash pooling arrangements, intellectual property, franchising agreements, employment relationships and consumer creditors. In addition, the proceedings are notably international, as the estate administrator has organised the shutdown of operations and the liquidation of assets in close cooperation with the estate administrators of the Swedish Group companies. The cooperation has included, among other things, exploring opportunities for selling the business, the sale of intangible rights and the coordination of intra-group agreements.
Case published 9.12.2025
Merger of Oomi and Lumme Energia
We are acting as the joint legal advisor to Oomi Oy and Lumme Energia Oy in a transaction whereby Lumme Energia will merge with Oomi. As from the completion of the merger, the combined entity will be the largest electricity retail and service company in the Finnish market. In 2024, Oomi reported a turnover of EUR 373.9 million and had approximately 110 employees. Lumme Energia’s turnover for the same year was approximately EUR 314.6 million and it had approximately 50 employees. The transaction is primarily driven by the recent developments in the electricity market and the strategic goal to develop competitive products and services. Another key objective is to further enhance the customer experience, which is a shared value between the two companies. As a result of the merger, Lumme Energia’s customers will transfer to Oomi, and Lumme Energia will become one of Oomi’s shareholders. The completion of the transaction is subject to an approval by the Finnish Competition and Consumer Authority.
Case published 29.8.2025
HANZA – Acquisition of Milectria
We acted as Finnish legal advisor to HANZA AB in connection with its acquisition of the contract manufacturing division of Milectria, a group of companies specialising in electrical systems for the defence industry. The transaction comprises 100% of the shares in Milectria Oy (Finland), Milectria OÜ (Estonia), and the real estate company Kiinteistö Oy Kanungin Karhu. The transaction is expected to close in September 2025, subject to customary closing conditions, including regulatory approvals. Founded in 2008, HANZA is a Swedish mechanical engineering and electronics contract manufacturing company listed on the Nasdaq Stockholm main list. The company operating in seven countries currently has annual sales of approximately SEK 6 billion and approximately 3,100 employees. Milectria is a Finnish contract manufacturer of electrical systems for the defence industry.
Case published 21.7.2025