The significance of a warning in a dismissal on personal grounds

The significance of a warning in a dismissal on personal grounds

This article concerns Finnish employment law.

Abstract

This article examines the role of a warning as a condition for dismissal on personal grounds, in the light of the Employment Contracts Act and case law. The central function of a warning is to serve both as a means of protecting the employee's legal position and as documentation for the employer that links the reprehensible conduct to a possible termination of employment. In its case law (including KKO 2016:62, KKO 2014:98, KKO 2021:9 and KKO 2020:74), the Supreme Court has clarified the requirements concerning the quality, timing and connection of a warning, as well as the exceptions in which a warning is not a precondition. For the employer, the emphasis is on the duty to specify the breach, to give a reasonable opportunity to correct it, and to demonstrate that the conduct has continued, whereas on the employee's side the strongest arguments relate to deficiencies in the warning, a lack of connection, or the insufficiency of the evidence. As a whole, the warning appears as a central concretisation of the ultima ratio principle, whose appropriateness often determines whether a dismissal is lawful or unfounded and leads to liability for compensation.

Three quality criteria for a warning

A warning in connection with a dismissal on personal grounds is not a formality but a central part of assessing the threshold for dismissal. Under the Employment Contracts Act, dismissal on personal grounds is available only when there is a proper and weighty reason, and this is read in the light of the starting point that termination is a matter of ultima ratio for the employer. The function of a warning is twofold: it makes clear to the employee what has been criticised and how the conduct should be corrected, and at the same time it builds for the employer a documented bridge showing that, if the same conduct continues, the employment can be terminated. Case law has emphasised three quality criteria on which the evidential value of a warning often rests. First, the warning must be specific: the criticised act or omission must be described in terms of time and content so that the employee understands what exactly needs to be corrected; general expressions such as "inappropriate behaviour" or "poor performance" do not suffice. This point has been supported in legal literature on grounds including the principle of employee protection (Koskinen et al., 2018, Työoikeus).

Second, there must be a substantive connection between the warning and the later ground for dismissal; if the warning concerns A and the dismissal is based on B, the warning does not serve as a condition for termination. Third, the warning must expressly state that, if the conduct continues, the consequence may be termination of employment; otherwise it is a remark, not a warning. The decision KKO 2016:62 concretises both the connection requirement and temporal relevance: earlier warnings did not support the dismissal, because they concerned different conduct and a considerable amount of time had passed since one of them. A warning gives an opportunity to correct precisely the conduct on which the dismissal is later anchored; if the conduct is corrected or the issue changes to another, the old warning "wears off" and does not form a general store to fall back on.

The burden of proof remains with the employer

KKO 2014:98, in turn, is a reminder that a warning does not shift the employer's burden of proving the breach of obligations. There, a dismissal after two warnings was based on a low sales margin, but the Supreme Court held that a mere numerical result did not demonstrate a serious breach of the employee's obligations: the employer was unable to separate out factors independent of the employee, nor to specify particular actions contrary to instructions. A warning therefore does not turn an abstract performance indicator into a "breach"; rather, the employer must show which obligation was breached, when, and how it continued after the warning. This also gives rise to obligations of action on the employer's part: if underperformance is the core theme, the targets must be realistic and measurable, the guidance and support documented, the warning specific, and the correction period monitored; without this chain, the dismissal is liable to fail.

The temporal dimension of a warning

In temporal terms, a warning is connected to the assessment of reasonable time: KKO 2021:9 underlines that the employer must take action within a reasonable time of the facts constituting the ground for dismissal becoming sufficiently clear. This time requirement is reflected in warnings in two ways. If a warning is given after a long delay, its preventive function weakens; if the warning is old in relation to the ground for termination, its weight in the later assessment diminishes. In short: time matters both in giving a warning and in relying on it, and delay easily turns against the employer.

Exception: a serious breakdown of trust

As an exception to the main rule, a warning is not a precondition when the breach seriously undermines trust. This line is illustrated by KKO 2020:74, in which a serious embezzlement committed in the employee's free time objectively eroded the trust connected to financial duties; the employer was not required to investigate alternative placements or to give a prior warning. It is essential, however, that the distinction is always drawn through an overall assessment. In minor breaches of loyalty obligations, such as inappropriate expressions, small procedural errors or isolated instances of carelessness, a warning is the starting point and its absence may cause the dismissal to fail. In serious cases, a warning may be a superfluous measure, but even then the employer must be able to demonstrate why restoring trust is not realistic and why the immediacy of the measure is justified. Using this exceptional area without precise justification is risky and readily affects the calibration of compensation.

Focal points of the employee's argumentation

From the employee's perspective, the strongest arguments usually arise from three thematic areas. First, the concreteness of the warning: if the warning does not state what, when and how, the employee has no real opportunity to correct the conduct, and the audi alteram partem principle is not fulfilled. Second, the connection requirement: if the dismissal is based on something other than the issue described in the warning, the requirement of recurrence is missing (KKO 2016:62). Third, evidence: a warning does not remove the employer's obligation to prove the employee's own breach of obligations; KKO 2014:98 shows that even two warnings do not save a dismissal if the evidence remains qualitatively deficient. It is easy to anchor a compensation claim to these, and the calibration criteria of Chapter 12, Section 2, namely the duration of the employment, age, prospects of finding employment, and the employer's conduct, can increase the sanction significantly if the employer has at the same time neglected its obligations to hear the employee or to offer alternative placement.

The employer's process and documentation

From the employer's perspective, a precise process and documentation are central. A warning must also be distinguished from a remark. It has been argued in legal literature, relying on a Court of Appeal decision, that the employee must understand the warning as carrying a threat of termination, even if the threat is not separately expressed (Kouvola Court of Appeal 23 November 2006 S 06/226, Koskinen et al., 2018, Työoikeus). In a warning, the normative basis must be specified (the relevant points of the Employment Contracts Act, the collective agreement and workplace instructions), the description of events chronological and verifiable (attachments, reports, feedback), the requirement to correct concrete (what will be done differently, how, and by when), the threat of termination express, and receipt of the warning verified.

After this, the employer must give a reasonable but short period for correction, offer the necessary support, and monitor the change. If the breach is of such a nature that a warning is not realistic (for example, a serious breach of financial trust), the justification must be made in writing and consistently, in the spirit of KKO 2020:74. The timetable of the process must be adhered to, so that the "reasonable time" requirement of KKO 2021:9 is not breached, and in the hearing all essential material must be provided in advance, together with a genuine opportunity to comment. When this chain is in order, the connection between the warning and the ground for termination is easy to demonstrate, and the employer neutralises the most common arguments concerning the quality and timing of the warning.

Conclusion

A warning is a core instrument both for the employee's protection and for the employer's risk management. KKO 2016:62 highlights the requirement of connection and timing, KKO 2014:98 is a reminder that a metric does not replace evidence, KKO 2021:9 emphasises promptness, and KKO 2020:74 shows one exceptional situation in which a warning was not needed. A simple rule of thumb captures the requirements: specify the criticism, give it within a reasonable time, state the correction and the threat clearly, monitor its implementation, and keep the whole chain on paper. When these elements are met, the warning fulfils its purpose; it gives the employee a fair opportunity to correct the conduct and gives the employer a solid backing if no correction takes place. If, on the other hand, some link is missing, the risk of an unfounded dismissal and significant compensation materialises quickly.