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 rewrites fixed-term contract rules for SME employers
On 1 June 2026, amendments to Finland’s Employment Contracts Act came into force, allowing employers to conclude fixed-term contracts without providing an objective reason for the first time. The reform, described by practitioners as the most consequential change to Finnish dismissal and hiring rules in over two decades, is designed to reduce employment barriers and strengthen operating conditions for small and medium-sized employers.
Under the new rules, an employer may hire an employee on a fixed-term contract of up to one year without needing to demonstrate a temporary need or other justified ground, provided no employment relationship existed between the parties within the preceding five years. Before the contract ends, the employer must give the employee a reasoned explanation of whether continued employment on a permanent or justified fixed-term basis is possible. If the employer plans to recruit for the same or similar duties, it must first offer the work to the outgoing fixed-term employee, with this obligation lasting up to four months after the contract ends.
A separate amendment removes the re-employment obligation for employers with fewer than 50 employees: they are no longer required to offer work to a redundant former employee for up to six months after the relationship has ended. The layoff notice period has also been standardised at seven days.
What to do: If you employ staff in Finland, update your contract templates and hiring workflows to reflect the new fixed-term regime. The requirement to explain the employee’s future prospects before the contract expires is a practical step that line managers need to be briefed on. Employers with fewer than 50 staff should also review whether they were previously carrying re-employment obligations that no longer apply.
Also developing
Germany: A draft bill dated 17 July would make electronic time tracking compulsory for nearly all employers under a reformed Working Time Act (Arbeitszeitgesetz). Employers would be required to record the start, end and duration of each employee’s daily working time on the same day the work is performed, using a system that maintains a tamper-proof audit trail. Fines for non-compliance could reach €30,000. The same reform package would eliminate telephone-based sick notes and require employees to present a medical certificate from the first day of illness, a response to Germany’s average of 18.6 sick days per employee in 2025. The government is expected to present a formal legislative proposal in autumn 2026. What to do: No immediate obligation, as the bill is not yet law. However, employers operating in Germany should begin evaluating electronic time-tracking systems and reviewing their sick-leave documentation processes now, so they are ready to comply when the legislation takes effect.
Austria: Since 1 January 2026, freelance workers classified as “employee-like” (freie Dienstnehmer who work personally and do not use their own equipment) have had statutory notice periods for the first time: four weeks during the first two years of service, rising to six weeks from the third year. Collective agreements can now also be extended to cover these workers, setting enforceable minimum pay rates and expense compensation. Self-employed individuals with their own trade licence or equipment are not affected. What to do: If you engage freelancers in Austria, check whether any of them fall within the “employee-like” category under Section 4(4) ASVG. Those who do are now covered by statutory notice periods and may become subject to collective agreement minimums. Review your contracts and termination procedures accordingly.
Belgium: The federal government requested a six-month extension from the European Commission in early June to transpose the EU Pay Transparency Directive for the private sector, after social partners failed to reach agreement by the 7 June deadline. No concrete draft legislation exists yet for the private sector, although Flanders has partially transposed the directive for its public sector through a regional decree. The Commission has indicated it will not grant a blanket postponement across member states. What to do: Belgian employers should not treat the extension request as a reason to delay preparation. Begin auditing pay data, structuring pay bands by role category and preparing gender pay gap reporting processes. The directive’s obligations will apply regardless of exactly when national law catches up.
On the radar
EU Pay Transparency Directive: Only four of 27 member states (Slovakia, Italy, Lithuania and Malta) met the 7 June transposition deadline. The remaining 23 are at various stages of drafting, with Sweden, the Netherlands, the Czech Republic and Denmark signalling a January 2027 target. The Commission has made clear there will be no pause or carve-out. Greece transposed on 6 July (previously covered).
Belgium, 1 August notice period (previously covered): The one-week notice period during the first six months of employment takes effect on Friday for new indefinite-term contracts.
UK, zero-hours contracts consultation (previously covered): Closes 25 August 2026.
EU Platform Workers Directive (previously covered): Member states must transpose by 2 December 2026.
Sources
- Borenius: New changes to the Finnish employment legislation entered into force (1 June 2026)
- Finnish Government: Legislative changes to make fixed-term employment contracts more flexible (1 June 2026)
- HPP Attorneys: Regulation on fixed-term employment contracts will change on 1 June 2026
- DLA Piper: Finland reforms the Employment Contracts Act
- Addleshaw Goddard: Germany’s working time reform, draft bill expected (2026)
- Timesheet.io: Germany’s Arbeitszeitgesetz, the 2026 time-tracking mandate
- Ad-hoc-news.de: German government targets sick-note rule and electronic time tracking
- Schoenherr: Enhanced termination rules and collective bargaining for freelance employees in Austria
- The International: New rules for freelancers in Austria from 2026
- Partena Professional: Belgium requests additional six months to transpose the Pay Transparency Directive
- Baker McKenzie: Belgium seeks extension for EU Pay Transparency Directive
- Lewis Silkin: EU Pay Transparency Directive 2026, no EU-level delay (1 July 2026)
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.
