Europe HR Compliance Pulse: 13 July 2026

A daily briefing on European HR, labour law and compliance developments for SME HR teams across the EU, UK, Switzerland and the Nordics.

Top story: Finland completes triple employment reform wave

Finland has rolled out three waves of employment legislation since the start of 2026, completing the most significant overhaul of its labour market rules in over a decade. On 1 January, the dismissal threshold was lowered: the former “proper and weighty reason” standard for termination on personal grounds became simply a “proper reason,” meaning conduct or capability issues that previously fell below the bar may now justify dismissal. On 1 March, amendments to the Co-operation Act took effect, requiring employers to update consultation processes, reporting timelines and notification procedures. The final piece landed on 1 June, when new rules on fixed-term contracts entered into force: employers may now conclude a fixed-term contract of up to one year without a justified reason, provided it is the first employment relationship with that employee (or at least five years have passed since the last one). Both parties may terminate such a contract after six months. The re-employment obligation now applies only to employers with 50 or more employees. Parliament approved the fixed-term reform with 93 votes in favour and 78 against.

What to do: If you employ staff in Finland, review your dismissal procedures against the lower threshold and update fixed-term contract templates. SMEs with fewer than 50 employees should note the re-employment obligation no longer applies to them, reducing administrative burden when a fixed-term role ends.

Also developing

Ireland: The Workplace Relations Commission has issued a decision “piercing the corporate veil” to determine a worker’s true employment status. In Lingard v Randridge International Ltd, the WRC looked behind the company structure and held the relationship to be one of employment, not independent contracting. The decision applies the five-step test from the Supreme Court’s Karshan judgment (2023) and signals that operating through a personal service company will not, on its own, prevent a finding of employee status. The WRC has been increasingly willing to look through corporate structures since Karshan, and a related Code of Practice on employment status has been in effect since October 2024. What to do: Irish employers engaging workers through personal service or managed service companies should assess whether the day-to-day relationship would meet the Karshan test for employment and document the genuine independence of the arrangement.

Netherlands: The Dutch government’s approach to self-employment classification has shifted materially since this topic was last covered. On 6 March, Minister Aartsen announced that the VBAR bill’s “clarification” provisions on employment status have been scrapped entirely because they caused too much uncertainty among freelancers and clients. In their place, the cabinet is developing a new Zelfstandigenwet (Self-Employment Act), expected in 2027 at the earliest, which will focus on whether a worker genuinely operates as an independent entrepreneur rather than solely looking for indicators of an employment contract. One element has survived: the legal presumption of employee status for workers earning below approximately €38 per hour was separated into standalone legislation, passed the Tweede Kamer on 21 April and is now before the Eerste Kamer. It must be published in the Staatsblad by 31 August 2026. What to do: Employers using freelancers in the Netherlands should note that active enforcement under the existing DBA Act continues, regardless of the legislative reset. Audit current engagements and ensure each contractor relationship can withstand scrutiny under existing case law.

Switzerland: The Federal Council extended the maximum duration of short-time work compensation (Kurzarbeit) from the original 18 months to 24 months, effective since 1 November 2025. This temporary extension, originally due to expire on 31 July 2026, was further extended on 27 May 2026 and will now remain in effect until 31 January 2027. Short-time work subsidies reimburse 80% of lost wages when employers temporarily reduce working hours. The extension supports export-oriented industries still dealing with weak global demand. What to do: Swiss employers currently using or considering short-time work arrangements have until January 2027 to benefit from the extended 24-month maximum. Review whether your situation qualifies before submitting or extending an application.

Germany: From 1 July, the Neue Grundsicherung (new basic security allowance) replaced Bürgergeld as Germany’s long-term unemployment benefit. The Bundestag passed the reform on 5 March with 321 votes in favour. While payment amounts remain unchanged at €563 per month for a single adult, the system introduces stricter obligations for recipients: tighter asset limits based on age, mandatory attendance at Jobcentre appointments (missing two triggers a 30% cut), and consequences for rejecting a job offer. Around 5.5 million residents are affected. Although the reform targets benefit recipients, HR teams may notice more candidates entering the labour market as Jobcentre referral activity increases. What to do: No direct employer obligations arise from this change, but German HR teams should be aware that recruitment pipelines may see more Jobcentre-referred candidates and should ensure onboarding processes can accommodate them.

On the radar

Germany, employment reform package (previously covered): The 34-measure reform package, including day-one sick-note requirements and a new high-earner termination mechanism, still requires Bundestag approval. The vote was expected before the summer recess; monitor parliamentary proceedings for the outcome.

Sweden, Pay Transparency Directive (previously covered): Sweden has formally refused to implement the EU Pay Transparency Directive in its current form. On 26 March, the government announced it would seek to delay the transposition deadline and reopen negotiations at EU level, arguing the directive creates unnecessary administrative burden. The government has, however, tasked the Equality Ombudsman with preparatory measures. No legislation will be submitted to the Riksdag for now.

EU Platform Workers Directive: Member states must transpose by 2 December 2026. Germany has begun its transposition process; several other major economies are expected to follow in the autumn.

Sources

Europe HR Compliance Pulse is an informational summary of publicly reported legal and regulatory developments. It is not legal advice. Always confirm obligations for your specific situation and market with a qualified adviser.