Cooperation Act
The Cooperation Act regulates the cooperation procedure and, through it, communication, dialogue and change negotiations between personnel and the employer.
The Cooperatives Act applies as such to companies that regularly employ at least 50 employees, but there are exceptions. The Cooperatives Act may apply, for example, if the workforce needs to be reduced, put on part-time or laid off.
Contents:
The Cooperative Act in a nutshell
The Cooperative Act requires certain practices when the workforce is reduced and places obligations on the employer, for example, to organize negotiations before change negotiations. The cooperative procedure also requires regular dialogue and communication. The Cooperative Act means different obligations for employers based on how many people they regularly employ.
- 50 employees The Cooperatives Act is fully applied in the company.
- 20–49 employees In companies, the law is applied to a limited extent. This means a lighter dialogue obligation. With certain exceptions, change negotiations must take place in companies with 20–49 employees.
- In large companies, 150 employees in companies, the provisions on employee management representation apply.
- In the smallest, with less than 20 employees in companies, the Cooperatives Act does not apply.
In companies with 20–49 employees, change negotiations must be held when the employer is considering dismissing at least 20 employees, making them part-time, unilaterally changing an essential term of an employment contract on financial or production grounds, or laying off employees within a 90-day period.
When calculating the number of personnel, the following is taken into account: number of people in regular employment, which are
- in an employment relationship valid until further notice,
- in a part-time employment relationship or
- in a fixed-term employment relationship.
Neither the length of working hours nor the fixed-term contract excludes employees from calculating the number of personnel.
- For example, the number of hours worked by part-time employees is not taken into account in principle, but each part-time employee who is currently employed is counted in the total number of employees.
A temporary employee working as a substitute for a permanent employee is also taken into account in the number.
- If an employee is absent from work, for example due to family leave, but is still employed, he or she is included in the headcount, even if no replacement has been hired.
- However, if an employee has a replacement hired for the time off, both are not counted separately when calculating the number of personnel.
Regarding fixed-term employees, only employees working in exceptional or temporary positions in relation to the work being carried out in the company, as well as employees in short-term seasonal jobs, can be ignored. If the company regularly has fixed-term employees, these are included in the main figure.
Who is not included in the number of personnel?
Only employees who are employed by the company are included in the headcount. The key issue is who the employer of these individuals is.
Does not include:
- temporary workers
- subcontractor employees
- The CEO of a limited company is not employed and is not counted in the number of employees.
- entrepreneurs.
Self-employed persons are not taken into account when calculating the number of employees. It is irrelevant whether the person is insured under YEL or TYEL. The starting point is that YEL insured persons are never counted in the number of employees.
- Some of those insured under TYEL are also entrepreneurs from the perspective of labor legislation.
- The key criterion is whether the TYEL-insured co-owner or family member works under the management and supervision of another person.
- Therefore, for example, co-owners in management positions in a company are not counted in the main figure if they have a more than minor share of ownership. However, there cannot usually be very many such entrepreneurs in a company.
The CEO of the limited company is not employed and is not included in the number of employees.
Companies with 20–49 employees
In companies with 20–49 employees, the matters covered by the dialogue are not mandatory. According to the law, the subjects of the dialogue are defined within the company. appropriate If no agreement can be reached on this, the employer ultimately decides what kind of issues will be discussed in the first place.
In other legislation However, there are obligations to make certain plans or discuss issues in dialogue even in companies with fewer than 50 employees.
Such plans are mainly equality plan, non-discrimination plan ja occupational safety action plan. Matters stipulated in other legislation to be discussed in the ongoing dialogue include, among others, certain matters stipulated in the Act on the Protection of Privacy in Working Life and the Personnel Fund Act.
Companies with 50 employees
According to the Cooperatives Act, in companies employing at least 50 employees, the employer and the personnel or their representatives must conduct dialogue regularly. The Cooperatives Act also requires regular duty to disclose information.
The dialogue can cover:
- the financial situation of a company or community
- workplace rules and practices
- personnel structure and skills needs
- well-being at work.
Workplaces decide for themselves how they will implement the dialogue in practice. Dialogue between the employer and the personnel representative must take place at least quarterlyIf the company has not elected a staff representative, the dialogue can be held once a year at an event for all staff. As part of the dialogue, a plan for developing the work community must be made.
Regular dialogue and obligation to provide information
Dialogue refers to the handling of matters between the employer and the personnel representative, which promotes the adequate and timely flow of information. Dialogue offers personnel opportunities to influence matters concerning their work, working conditions or position.
The employer must engage in regular dialogue with the personnel representative in order to develop the company's or community's operations and the work community in matters covered by the law.
The employer must provide certain information to staff representatives twice a year and annually.
Reporting obligation twice a year:
- information on staff numbers,
- information on the number of temporary and part-time employees,
- a statement of the company's financial status.
Annual reporting obligation:
- information on the salaries of employees represented by the staff representative,
- work sites where external labor is used,
- about work tasks and periods
- financial statements and annual report, unless otherwise agreed.
However, the salary of an individual employee may not be revealed in the information provided.
How is the dialogue carried out?
The dialogue shall be carried out in a meeting between the employer and the personnel representative, the arrangements for which shall be made by the employer. The meeting shall be held at least once every quarter, unless otherwise agreed by the employer and the personnel representative. If the matter subject to the dialogue concerns more than one personnel group, it shall be discussed at the meeting with representatives of all personnel groups concerned.
To the extent that the personnel do not have a representative, the employer can implement the dialogue obligation by discussing matters separately defined in the law at a joint meeting organized at least once a year.
Regarding dialogue, it is good to remember that the employer is constantly making decisions related to the operations of the company or community, which are reflected to a greater or lesser extent in the position of the personnel. The obligation to engage in dialogue does not interfere with the employer's right to make these decisions. Instead, the purpose is to create a forum where the employer and the personnel representative can raise topics they consider necessary for dialogue.
A staff representative can also initiate a dialogue.
The subject of the dialogue includes topics on which the employer must engage in regular dialogue with the personnel representative. These include;
- the development prospects and financial situation of the company or community;
- A dialogue about development prospects and the financial situation opens up the possibility for the employer and personnel representative to discuss possible developments that, if realized, would require the employer to initiate change negotiations at a later stage.
- the rules, practices and operating principles applicable in the workplace;
- Work rules are mainly instructions that define and specify workplace procedures, as well as rules of conduct and play that employees and employers must follow in practice.
- In this regard, the dialogue may concern working time practices, workplace organization guidelines, occupational health care, granting annual leave, reporting sick leave, or teleworking opportunities.
- on the methods of using labor and the structure of personnel;
- The employer must provide an explanation, for example, of the extent to which the employer uses fixed-term or part-time labor. As part of the dialogue on the use of labor, a discussion must also be held on the use of external labor, which includes both temporary and subcontracted work.
- The dialogue creates an opportunity for the employer to hear the views of the personnel on the different ways in which the employer's labor needs could be met. The question may arise, for example, when the employer is considering ways to meet the company's variable or temporary labor needs.
- Regarding the structure of the personnel, dialogue can be held on, for example, the age structure or gender distribution and the future needs arising from these.
- personnel's skills needs and skills development;
- The goal is for the employer and the personnel representative to strive to anticipate and map skills needs and to assess what kind of actions would be possible to develop and maintain skills.
- maintaining and promoting well-being at work to the extent that the matter is not dealt with under other legislation;
- The goal is for the employer and the personnel representative to regularly assess the factors that have an impact on employees' well-being at work and measures that can be taken to improve well-being at work.
- In addition, dialogue must be held on the obligations defined in Section 12 of the Act, which are determined separately on the basis of other legislation.
Dialogue on different issues must be held regularly. Since the weight and significance of different issues may vary in different workplaces and at different times, it is not necessary to hold dialogue on all of the aforementioned issues to the same extent or with the same frequency.
It is also not necessary to have a dialogue on every issue at every quarterly or biannual meeting.
The development plan is part of the measures defined in the Co-operation Act to maintain dialogue.
An employer employing at least 50 employees must, in cooperation with the personnel representative, draw up a work community development plan and maintain it for the systematic and long-term development of the work community. The work community development plan is drawn up and maintained as part of the above-mentioned dialogue.
If the employer dismisses employees for financial or production reasons, the necessary changes must be made to the development plan in connection with the dialogue after the change negotiations have concluded.
The following must be recorded in the work community development plan:
- current status and foreseeable developments that may have an impact on personnel's skills needs or well-being at work;
- goals and measures to develop and maintain personnel skills and promote personnel well-being at work;
- division of responsibilities and timetable for measures;
- monitoring procedures.
The principles for using external labor must also be recorded in the work community development plan.
When preparing and maintaining a work community development plan, attention must be paid, as necessary:
- the effects of technological developments, investments and other changes in the operations of a company or community on the work community;
- the special needs of employees in different life situations, and in particular the needs to maintain the working ability of employees at risk of disability and older employees, as well as the labour market suitability of employees at risk of unemployment;
- for managing a work community.
The plans referred to in Section 6a of the Act on Equality between Women and Men (609/1986) and Section 7, subsection 2 of the Non-Discrimination Act (1325/2014) can be implemented as part of the work community development plan.
The duty to provide information is the employer's obligation to provide representatives of personnel groups representing employees with certain information about the company at certain intervals and as part of an ongoing dialogue. Chapter 2 of the Co-operation Act also provides for the employer's duty to provide information.
Information to be provided for the dialogue
The employer must provide the staff representative in writing with all relevant information that is reasonably available and that the employer is entitled to provide in order to ensure the successful conduct of the dialogue. The information must be provided no later than one week before the dialogue is held, unless otherwise agreed. After receiving the information, the staff representative has the right to request further information on any matter relevant to the dialogue.
Regularly provided information
The employer must provide the staff representative with:
- information on the number of employees broken down by business unit or in another similar manner;
- information on the number of employees working on fixed-term or part-time contracts;
- a unified report on the financial status of a company or community, which shows the development prospects of production, service or other activities, employment, profitability and cost structure.
In addition, unless otherwise agreed, the employer must annually provide the personnel representative with:
- information on the salaries paid to employees represented by the staff representative in a manner that does not reveal the salary information of an individual employee; upon request, the information must be provided broken down by occupational group;
- with regard to the use of external labour, information on the work sites and tasks and the periods during which external labour was used, if it was covered by the Act on the client's reporting obligation and liability when using external labour;
- financial statements and annual report, if the employer is required to prepare one.
If there are any significant changes to the information referred to in the first paragraph above, the employer must notify the personnel representative.
If no representative has been elected for the personnel or personnel group, the employer may fulfill the obligation to provide information by presenting a report on the financial status of the company or entity to the entire personnel or personnel group at a joint event, which shows the development prospects for production, service or other activities, employment, profitability and cost structure.
The cooperation ombudsman is responsible for monitoring laws regarding cooperation in the workplace.
The Co-operation Ombudsman operates independently within the Ministry of Employment and the Economy and monitors compliance with the Co-operation Act and other laws concerning personnel participation systems..
His primary role is aprovides instructions and advice on the application of laws. In addition, the task is to promote and improve cooperation between employers and employees and the implementation of other personnel participation systems through initiatives and instructions.
The duties of the agent also include supervision of personnel funds and maintenance of the personnel fund register.
The cooperation representative supervises
- the Cooperation Act (1333/2021),
- the Act on Group Business Cooperation (335/2007),
- the Act on Employee Representation in European Companies and European Cooperative Societies (758/2004) and
- Personnel Fund Act (934/2010)
compliance and monitors the achievement of their objectives, and
- provide advice on the application of the above laws
- promote and improve cooperation between employers and employees and the implementation of other personnel participation systems
- supervises the operations and administration of the personnel fund
- maintains the personnel fund register.
The law aims to make supervision more efficient and Companies and employees can receive support in applying the Cooperatives Act at no cost.
The agent has the authority, as necessary, to conduct a necessary inspection of the company to the extent required by the supervisory task, to issue a warning to the employer to correct the unlawful conduct, to initiate a preliminary investigation into the matter and, in certain cases, to demand that the court impose a penalty fine.
Failure to comply with obligations has consequences that are determined by the cooperation ombudsman and, if necessary, later by the court.
If the employer neglects its obligation to provide information and does not arrange opportunities for continuous dialogue as required by law, or if the employer does not provide the above information to the representatives of the personnel groups, the cooperation ombudsman may issue a request to organize a dialogue or provide information. If the request is not followed, the court may fine the employer or the employer's representative for neglecting the obligation to cooperate.
However, the employer is not obliged to provide employees or representatives of personnel groups with information the disclosure of which would, in an objective assessment, cause significant harm or damage to the company or its operations. This is an exception to the general rule, which is interpreted very narrowly, i.e. in principle, the employer must provide the information.
In practice, an employer may have the right not to disclose information in a situation where the protection of, for example, a listed company's information that is subject to statutory confidentiality provisions could be seriously compromised.
Cooperation procedure and cooperation negotiations
Co-operative negotiations, or change negotiations, must take place between the employer and the personnel if the employer is planning changes that will significantly affect the personnel.
Amendment negotiations have been provided for in the Cooperation Act more specifically.
The need for change negotiations arises when the employer is considering measures that may lead to the dismissal, layoff or part-time work of one or more employees. Change negotiations must also be held if the employer plans to change the terms of the employment relationship by unilateral decision on financial or production grounds.
These include changes in work tasks, work methods, work arrangements, work space arrangements or regular working hours arrangements, which are due to, for example:
- the termination of a company or entity or any part thereof, the transfer to another location, or the expansion or reduction of their operations
- machinery or equipment purchases or the introduction of new technology
- changes to work organization or arrangements
- changes in service production or product range
- the introduction of external labor or changes to it
Collective bargaining negotiations concerning change situations, and in particular workforce reductions, differ from other collective bargaining negotiations in that they are accompanied by quite specific time limits. In addition, situations concerning workforce reductions are accompanied by a compensation sanction if the obligation to negotiate is neglected or the provisions related to negotiations are violated.
According to the Co-operation Act, an employer that is bankrupt or in liquidation is not required to conduct change negotiations. The estate of a deceased person is also not required to conduct change negotiations if it is considering terminating an employment contract. employment contract law In accordance with Chapter 7, Section 8, Subsection 2.
Scheduling change negotiations
Change negotiations must begin as soon as the employer is considering measures. It is important to remember that the business decision in question must not be made before the co-operation negotiations have taken place.
- Change negotiations should take place in a situation where the employer is able to identify the planned measure and the related personnel impacts. The employer should mainly be able to prepare a negotiation proposal referred to in Section 19 of the Co-operation Act and negotiate on the relevant issues.
- Negotiations should be held at the right time – not too early and not too late. The negotiation process must be completed before the employer decides on the matter.
- The employer may resolve the matter without prior change negotiations only in exceptional cases. Such a situation may arise if the company's operations or finances are damaged by particularly serious reasons that could not have been known in advance. In such cases, however, the employer must initiate change negotiations without delay when there are no longer grounds for deviating from the negotiation obligations. The employer must then clarify the grounds for the exceptional procedure.
Change negotiations in companies with 20-49 employees
Change negotiations must take place if the employer considers, on economic or production grounds, to lay off at least 20 employees within a 90-day period. dismissal, part-time work or layoff employment contract law Based on Chapter 5, Section 2, Subsection 1, Paragraph 1. The same rule also applies if the employer is considering unilaterally changing an essential term of the employment contract.
The 90-day review period is “rolling”, meaning that laying off more than 20 employees during any 90-day period is sufficient.
Exception provision:
- In addition to dismissals, the exception provision also includes layoffs, part-time work and changes to the terms of employment based on dismissal. However, short layoffs of up to 90 days are not covered by the exception, meaning that they are not subject to the negotiation obligation in companies with 20–49 employees.
- When examining whether the limit of 20 employees mentioned in the provision is exceeded, 90
during the day, what matters is how many notices of termination (or notices of layoff, part-time work or change of conditions) have been given during the 90 days and not, for example, how many employment relationships have ended during the 90 days. - The exception rule does not apply even if the employer is aware of the deductions.
the total number is more than 20 if more than 20 reduction notifications are not submitted within 90 days.
Employer's proposal to initiate negotiations
Before commencing change negotiations, the employer must submit a written negotiation proposal, which must include at least the time and place of commencement of change negotiations and a proposal for the main issues to be discussed in the negotiations.
When considering dismissing, laying off or working part-time one or more employees or unilaterally changing the terms of the employment relationship on economic and production grounds, the employer must submit a written negotiation proposal to initiate cooperation negotiations no later than five calendar days before the negotiations begin.
In negotiations with the employer's representative, employees are usually represented by representatives of the personnel group or groups. Negotiations may also be held in a joint meeting. If the planned measures only concern an individual employee or employees, negotiations may be held between the employer and the employee. However, employees have the right to demand that negotiations be held between the employees' representative and the employer.
It is important to ensure that all personnel groups (workers, white-collar employees and senior white-collar employees) that may be affected by workforce reductions have the opportunity to appoint representatives to the collective bargaining negotiations.
If the personnel groups or some of them do not have an elected representative (shop steward or shop steward), it is recommended that the employer, in the negotiation proposal, urge the personnel groups to elect their representatives for the collective bargaining negotiations.
If the collective bargaining negotiations are held without all personnel groups subject to the negotiations having had the opportunity to appoint their representatives to the negotiations, the obligation to negotiate will not be fulfilled for these personnel groups.
The employer can also fulfill its obligations by holding negotiations jointly with all employees in the personnel group.
Before commencing change negotiations, the employer must submit a written negotiation proposal, which must include at least the time and place of commencement of change negotiations and a proposal for the main issues to be discussed in the negotiations.
If the negotiations for changes concern the dismissal, layoff, part-time work of one or more employees or the unilateral amendment of an essential term of the employment contract as referred to in section 16, subsection 1 of the Act, the negotiation proposal must be submitted no later than five days before the start of the negotiations.
In addition, the negotiation proposal must state:
1) planned measures and their justification;
2) a preliminary estimate of the number of employees subject to the measures, broken down by personnel group and measure;
3) a statement of the principles according to which the employees subject to the measure are determined;
4) an estimate of the time within which the measures will be implemented.
If any information to be provided is not yet available at the time of submitting the negotiation proposal, the information must be provided no later than when the change negotiations begin. If the missing information is essential to the matter to be negotiated at the first meeting, the consideration of the matter must be postponed at the request of the employee or personnel representative so that they have the opportunity to prepare for the consideration of the matter.
A negotiation proposal concerning the dismissal, layoff, part-time employment of one or more employees or the unilateral amendment of an essential term of an employment contract must also be submitted to the Employment and Economic Development Office no later than the start of the amendment negotiations.
If the change negotiations concern a material change affecting the employee's status as referred to in section 16, subsection 2 of the Act, the employer must, before commencing the change negotiations, provide the employees or personnel representatives concerned with the information necessary for handling the matter.
The employer must send the TE Office written information about the change negotiations as soon as they start. The notification is made to the TE Office of the employer's domicile. In practice, this can be, for example, a negotiation proposal prepared by the employer.
In the Cooperative Act, this provision is related to the so-called change security provision, and the purpose is to give the TE Office the opportunity to prepare for supporting the employment of the employees in question as early as possible.
Although the TE Office's need for preparedness is not quite as great when dismissing an individual employee, notification must be submitted even if the reduction negotiations concern only one employee.
When an employer has made a negotiation proposal stating its intention to dismiss at least ten employees on financial or production grounds, the employer must, at the beginning of the cooperation negotiations, provide the representatives of the personnel groups with a proposal for an action plan to promote employment.
When preparing the action plan, the employer must immediately investigate, together with the employment authorities, the public employment services that support employment.
The action plan must indicate:
- planned schedule of cooperation negotiations
- procedures to be followed in negotiations
- planned operating principles to be followed during the notice period
- Principles to be followed during the notice period to promote job search and training
If the dismissals considered by the employer concern fewer than ten employees, the employer does not have to prepare an action plan.
However, at the start of the cooperation negotiations, the employer must present operating principles according to which, during the notice period, employees will be supported in their own initiative to seek other work or training, as well as in their employment through public employment services.
Change negotiations must at least address the reasons for, impacts on and alternatives to measures affecting personnel. The parties must act constructively and strive to contribute to the progress of the negotiations.
If the solutions considered by the employer regarding business operations obviously lead to the dismissal, layoff, part-time work or unilateral change of the terms of employment of one or more employees on production and financial grounds for dismissal, the following must be discussed in the cooperation negotiations in a spirit of cooperation in order to reach a consensus:
- the reasons for and effects of these measures
- the above-mentioned operating principles or action plan
- options for limiting the number of people subject to workforce reductions and mitigating the consequences of the reductions for employees.
- suggestions and alternative solutions made by a staff representative or employee.
It is important to note that the employer may not make a decision to reduce or lay off the workforce before or during negotiations. A possible decision to reduce the workforce may only be made after the obligation to negotiate has been fulfilled, if no other solution is found in negotiations conducted in a spirit of cooperation.
A staff representative or employee participating in the negotiations has the right to submit written proposals and alternative solutions for consideration in the change negotiations. The proposal or alternative solution must be submitted well in advance of the meeting at which the matter is to be discussed.
If the employer does not consider the proposal or alternative solution to be appropriate or feasible, it must, during the negotiations, provide a written explanation of the reasons behind its position to the extent necessary.
The employer is obliged to keep minutes of the cooperation negotiations if one of the participants in the negotiations requests it. However, since the minutes are important, especially in potential disputes, it is recommended that the employer ensure that the minutes are kept without an explicit request.
The minutes must at least state the dates of the negotiations, the persons who participated in them, and the results of the negotiations or any differing positions of the parties. According to the general rule, all those present at the negotiations shall check and sign the minutes. This rule may be waived, but due to possible disputes, it is important that representatives of both negotiating parties check and sign the minutes.
It is recommended that minutes of negotiations are always drawn up, even if the personnel representative or employees do not specifically request one.
Obligation to negotiate
If the employer's planned dismissals, layoffs, part-time work or unilateral changes to the terms of employment on production and financial grounds for dismissal affect fewer than ten employees or the layoffs last no more than 90 days, the employer is deemed to have fulfilled its negotiation obligation when negotiations have been held for a period of 7 days from their commencement, unless otherwise agreed in the collective bargaining negotiations.
In the collaboration procedure, it can therefore be agreed that the employer will be deemed to have fulfilled its negotiation obligation before the 7-day period has expired. If the company's financial situation is so bad that dismissals cannot be avoided, the employer and employees can agree that the negotiations will be terminated before the 7-day period has expired. In this case, it can be agreed, for example, that despite the end of the negotiations, dismissals will not be carried out before the 7-day period has expired.
Even if the number of employees employed by the employer is regularly less than 50, the negotiation obligation is always at least 7 days.
If the employer's planned dismissals, part-time work or layoffs lasting longer than 90 days affect at least ten employees, the employer is deemed to have fulfilled its negotiation obligation when negotiations have been held for at least three weeks from the start of the negotiations, unless otherwise agreed in the collective bargaining negotiations.
However, the negotiation period is 7 days in a company with a regular number of employees below 50, even when negotiations are being held to reduce the number of employees by at least 10.
When a company is in corporate restructuring, the negotiation period is 7 days from the start of negotiations.
In addition to the minimum negotiation periods, the employer must take into account the deadline set out in Section 25a of the Co-operation Act, which may in certain situations postpone the date of termination of employment relationships. The deadline applies when the employer submits a negotiation proposal for its plan to dismiss at least ten employees on production and financial grounds. In this case, the employment contract of any dismissed employee may not be terminated before 30 days have passed since the negotiation proposal was submitted to the employment authority.
The purpose of the deadline is to reserve sufficient time for the employment authority to investigate employment services that support employment together with the employer. Failure to comply with the provision may result in compensation being awarded to the employer. It is therefore important for the employer to ensure that the negotiation proposal is submitted to the employment authority when negotiations begin.
Employer's report on negotiations
After negotiations on changes to the dismissal, layoff, part-time work or unilateral amendment of an essential term of an employment contract, the employer must, within a reasonable period of time, present an assessment of the following matters to the parties to the negotiations:
- the content of the decision considered by the employer;
- the number of employees subject to dismissal, layoff, part-time work or unilateral change of an essential term of the employment contract by personnel group or function;
- the duration of any layoffs;
- the time within which the employer intends to implement its decision.
At the request of the personnel representative, the employer must present the matters described above jointly to all employees belonging to the personnel group in the parts that concern them.
After other change negotiations concerning matters referred to in section 16, subsection 2 of the Act, a report on the decision and the estimated date of the change must be provided within a reasonable period of time to the negotiating party or, depending on the scope of the matter, to all employees affected by the change.
If the employer has dismissed, laid off, put an employee on part-time work or changed the essential terms of the employment contract unilaterally on a production and financial ground for dismissal, leaving intentionally or negligently disregarding obligations related to negotiations on reducing the use of labor, he is obliged to pay compensation to the employee.
- The maximum amount of compensation is 35,000 euros.The maximum amount of compensation may be revised by Government decree.
After negotiations on changes to the dismissal, layoff, part-time work or unilateral amendment of an essential term of an employment contract referred to in section 16, subsection 1 of the Co-operation Act, the employer must, within a reasonable period of time, present an assessment of the following matters to the parties to the negotiations:
- the content of the decision considered by the employer;
- the number of employees subject to dismissal, layoff, part-time work or unilateral change of an essential term of the employment contract by personnel group or function;
- the duration of any layoffs;
- the time within which the employer intends to implement its decision.
At the request of a personnel representative, the employer must present the matters referred to in subsection 1, paragraphs 1–4, jointly to all employees belonging to the personnel group in the parts that concern them.
When determining the amount of compensation, the nature and extent of the breach of obligation and its reprehensibility must be taken into account, the employer's efforts to correct its conduct, the nature of the measure taken against the employee, the employer's general circumstances and other comparable factors. If the employer's negligence can be considered minor, taking into account all relevant factors, compensation may not be awarded.
It is important to note that compensation does not require that the employee has suffered any damage. Compensation can also be awarded in a situation where the employer has had grounds for dismissal, layoff or part-time work. The compensation is tax-free income for the employee.
During the employment relationship, an action for compensation must be brought in court within two years of the end of the calendar year during which the right to compensation arose. After the employment relationship ends, the right to compensation lapses unless the action is brought within two years of the end of the employment relationship.
Frequently asked questions about change negotiations and collaboration
Collaboration means dialogue and information flow between the employer and the staff. Through collaboration, the employer regularly provides information about the company's situation, such as the financial situation, rules of the game, development of competence needs and well-being at work, and the staff has the opportunity to influence their own work, working conditions and position.
In addition, if the employer plans measures that affect the personnel and the company's workforce needs, the Cooperative Employment Act obliges the employer to hold co-operative negotiations.
Such measures may include, for example:
- layoff
- part-time work
- layoffs.
The cooperation is based on the Cooperation Act. The Cooperation Act obliges companies to apply the law in practice in different ways depending on the number of employees in the company.
Co-ordination negotiations, now called change negotiations, are discussions between employees and their employers when the employer is considering changes that will significantly affect the employees. Negotiations should take place, for example, when considering layoffs, layoffs, or changes to employment conditions.
During negotiations, solutions are evaluated and justified to the personnel before any action is taken.
Dismissal without collective bargaining is possible if your company regularly employs fewer than 50 people, and the exceptions under the Cooperatives Act for companies employing 20-49 employees do not apply, or the dismissal concerns an individual employee for personal reasons.
The obligations of the Cooperatives Act mainly relate to financial and production changes in larger companies, but you can always check the situation of your own company regarding the obligations of the Cooperatives Act at the Entrepreneurs' Advice Service if you are a member of Entrepreneurs.
If the employer originally intended to lay off fewer than 20 employees Within 90 days, but if the situation changes, further reductions must be negotiated.
However, implementing the first reductions without negotiations does not retroactively become unlawful, and there is no need to conduct retroactive negotiations for changes regarding these reductions.
If, after the first reductions, the number of employees in the company falls below 50, the first reductions must also be taken into account when calculating whether the limit of 20 employees is met in 90 days.
Some collective agreements may contain provisions regarding co-operation negotiations. The provisions may differ from the new provisions of the Co-operation Act explained in this guide.
However, for unorganized companies, i.e. companies not affiliated with an employers' association, it should be noted that such collective agreements concerning cooperation and possibly deviating from the Cooperation Act are not subject to general binding force. Accordingly, unorganized entrepreneurs always comply only with the provisions of the Cooperation Act in relation to cooperation.
The Entrepreneurs' Advisory Service helps
If your company is undergoing collective bargaining negotiations and you are a member of Yrittäjäti, we can provide free advice on your situation. The advisory service helps its member entrepreneurs with questions and problems related to collective bargaining negotiations.
Counselling service
Cooperation procedure in the transfer of a business
Transfer of a business means the transfer of a company, business, association or foundation or an operational part thereof to another employer. These provisions also apply to companies employing 20–49 employees.
In the case of a transfer of a business, the employees' employment relationship does not end, but the employees transfer to the transferee as old employees and the terms of their employment relationship remain unchanged. The transferee may also not terminate an employee's employment contract solely because of the transfer of the business.
An employee may terminate his employment contract with effect from the date of transfer if he has been informed of the transfer no later than one month before the date of transfer. If the employee has been informed of the transfer later, the employee may terminate his employment contract with effect from either the date of transfer or no later than one month after the transfer.
The same provisions also apply to mergers and divisions of companies. A merger or division of a company has no effect on the employment relationship of employees.
According to Section 26 of the Cooperatives Act, both the transferor and the transferee of the business must explain to the representatives of the personnel groups affected by the transfer:
- date or planned date of delivery
- reasons for surrender
- the legal, economic and social consequences of the transfer for employees
- planned measures concerning employees
Donor must provide the information in its possession described above to the representatives of the personnel groups well in advance of the transfer. The information must be provided to the representatives of the personnel groups affected by the transfer.
Transferee The above information must be provided to the representatives of the personnel groups in good time and no later than one week after the transfer is completed.
If the transfer, merger or division of a business has other personnel effects as referred to in the Cooperative Act – such as layoffs, for example – these changes must be discussed separately in co-operative negotiations. Informing does not therefore remove the obligation to negotiate in a situation of reduced work.
After explaining the above information to the representatives of the personnel groups, the transferee must reserve the opportunity for them to ask clarifying questions and provide answers to the questions raised. If the representatives of the personnel groups request it, the employer must present the information to the entire personnel of the company.
If an employer neglects the obligation to provide information pursuant to Section 26 of the Cooperation Act, the employer or its representative may be sentenced to a fine for violating the cooperation obligation.
Other provisions of the Cooperation Act
Traditionally, a company's personnel is mainly divided into three personnel groups: to employees, white-collar workers and senior white-collar workers.
In some situations, personnel groups cannot be identified according to the above-mentioned division. In practice, in these situations, companies or organizations have established a division of personnel into different groups that is appropriate for the operations of the companies or organizations in question. In these situations, the division into different personnel groups can be based, for example, on work tasks and/or collective agreements applicable to employees.
Employees who act as employer representatives in the application of collective agreements are excluded from personnel groups. Similarly, representatives of company management are excluded from personnel groups.
The representatives of personnel groups are primarily either the shop steward or the shop steward in accordance with the collective agreement.
If the employees have not elected a shop steward/delegate from among themselves, or if the majority of a personnel group does not have the right to participate in the election of a shop steward, the employees may elect a cooperation representative from among themselves for a maximum of two years at a time.
If the employees of a personnel group have not elected a representative, the employer may fulfill its obligations together with all employees belonging to the personnel group.
The parties to the collaboration are the employer and the company's personnel, i.e. the employee or representatives of the personnel group or groups, depending on the matter and the situation. The participants in the collaboration negotiations are the employee who is affected by the matter being discussed in the collaboration negotiations, his or her supervisor or, alternatively, a representative of the personnel group and a representative of the employer.
The law does not specify who represents the employer, but the employer's task is to appoint a person to the dialogue or negotiations who has the authority to act as the employer's representative in these matters. In practice, the person acting as the employer's representative could vary depending on the matter being discussed.
The representative of the personnel group in a company belonging to an employers' association may be a shop steward in accordance with the collective agreement, in another company (or when a shop steward has not been elected) a shop steward in accordance with the Employment Contracts Act, or a cooperation representative separately elected by the personnel for cooperation matters only.
In a non-unionized company, all employees have the right to participate in the election of a staff representative, including those who do not belong to a trade union or belong to a union other than the one that has concluded a collective agreement. If the issue to be discussed in the collective bargaining negotiations concerns the safety and health of employees, the staff group is also represented by an occupational safety and health representative.
The Act on Cooperation does not require the election of a personnel representative. If the personnel have not elected a representative, the employer may, according to the law, fulfil its cooperation obligations with all members of the personnel group in question.
The general rule is that issues concerning one or a few employees are handled between the employer and these employees.
If the matter to be discussed in the collective bargaining negotiations concerns employees belonging to more than one personnel group, it will be discussed in a joint meeting between the employer and representatives of the relevant personnel groups.
The Co-operation Act no longer provides for a so-called advisory board. However, the employer and the personnel representatives may, within the scope of freedom of contract, freely agree to establish an advisory board or equivalent institutions within which the obligations arising from the Act are implemented. If the employer and the personnel group representatives have agreed that matters falling within the scope of co-operation in the company or its various parts will be discussed in a joint advisory board of the employer and personnel group representatives, such a procedure may still be continued in order to implement the obligation of continuous dialogue.
Upon request, the employer must ensure that minutes are drawn up of the collective bargaining negotiations, both in terms of ongoing dialogue and change negotiations. All representatives of the employer and personnel groups present at the negotiations shall check the minutes and certify them with their signatures, unless otherwise agreed upon in the collective bargaining negotiations regarding the checking and certification of the minutes. It is often appropriate for the employer to draw up minutes even if they are not specifically requested.
Representatives of personnel groups have the right to hear and receive information from experts in the relevant unit and, if possible, from other experts in the company when preparing for the cooperation procedure. The same right applies in the actual cooperation negotiations, when it is necessary for the matter being discussed. For example, the company's financial manager can act as an expert when providing an explanation of the company's financial situation.
The provision does not apply to experts from outside the company, although this can be agreed upon between the parties. Directly under the law, an external trade union lawyer, for example, cannot be brought into the negotiations, but the employer can give its consent if it wishes.
The representative of the personnel group has the right to receive sufficient time off from work to perform the tasks referred to in the Cooperatives Act and for cooperation training. The employer must compensate for the loss of earnings resulting from the time off from work.
The employee, personnel group representative and expert must keep confidential any information received in connection with the cooperation procedure.
- Information concerning business and professional secrets
- information concerning the employer's financial position that is not public under other legislation and the dissemination of which would be likely to harm the employer or its business or contractual partner
- information concerning corporate security and similar security arrangements, the dissemination of which would be likely to harm the employer or its business and contractual partners
- information about a private individual's health, financial status and other information that concerns them personally, unless the person in question has given their consent to the disclosure of the information.
However, the employee or representative of the personnel group has the right to disclose this information to other employees or their representatives to the extent necessary for the purpose of the cooperation in view of the position of these employees. These employees are also obliged to maintain confidentiality regarding the information they receive.
The employer must explicitly inform personnel representatives which information is to be kept confidential.
The obligation of confidentiality continues throughout the entire period of employment.