The Act on Co-operation within Undertakings applies to companies that employ at least 20 people on a regular basis. The Act on Co-operation within Undertakings covers a variety of situations at the workplace in which employers must discuss the matter in question with employees before making a conclusive decision on it. Such matters include a company’s general plans, such as personnel and training plans, as well as the principles and goals of using temporary agency workers, personnel effects arising from changes in business operations, and the reorganization of work. This also applies to any transfers of business. Cooperation negotiations must also include a review of the purpose and adoption of any camera surveillance, access control and other supervision of the personnel through technical means and the methods used in them.
Cooperation negotiations when reducing workforce
The Act on Co-operation within Undertakings is best known for the cooperation negotiations that must be conducted when an employer is considering reducing its workforce – i.e. the termination of employment contracts, layoffs, or changing full-time contracts into part-time ones. Such measures may be considered when the employer has grounds pursuant to the Employment Contracts Act for one of these measures.
The purpose of cooperation negotiations is to negotiate on measures planned by the employer with the employees. The aim is for the decisions to be made after the negotiations. If the workplace has a shop steward, employee representative, or cooperation representative, this person conducts the negotiations with the employer. You can ask the negotiator what the negotiations concern. If your employer proposes negotiations that pertain to you alone, you should still ask your workplace’s shop steward to join you. Find out which collective agreement applies to your employment relationship beforehand and check the content of your own employment contract as well, in respect of the period of notice, for example.
Do not make any commitments or agreements in the middle of the negotiations without contacting the Union of Professional Engineers in Finland or your shop steward first.
Cooperation negotiations begin with the employer’s written proposal on the commencement of cooperation negotiations and employment measures. The proposal must be given no later than five (5) days before the negotiations begin. The proposal must indicate at least the time and place of the negotiations and an outline of the suggested agenda to be handled in the negotiations.
When considering terminating the employment contracts of at least ten people, or changing their contracts to part-time contracts, or laying them off for more than 90 days, the employer must provide the representatives of the employees in question with the following information in writing:
- the grounds for the intended measures,
- an initial estimate on the amount of terminations, layoffs and reduction of employment contracts into part-time contracts,
- a report on the principles used to determine which employees will be served notice of termination, laid off, or have their, employment contract changed to a part-time contract, and
- a time estimate for implementation of the said terminations and/or layoffs and introduction of the said part-time contracts.
The employer must also draw up an “action plan promoting employment”, provided that the need to reduce the workforce concerns at least ten people. While preparing the plan, the employer must, among other things, clarify the public employment services supporting employment together with the authorities responsible for economic affairs and employment.
Cooperation negotiations must also be held even if they pertain only to a single person. The cooperation negotiations must always concern all employees working in the same unit or all people otherwise performing the threatened work, even if the intention is for the measures to pertain to a single person alone.
If the cooperation negotiations pertain to you alone, you should still ask your shop steward to join you. Find out which collective agreement applies to your employment relationship beforehand and check the content of your own employment contract as well, in respect of the period of notice, for example.
The cooperation negotiations must cover the following:
- the grounds for and impact of the measures planned by the employer,
- the principles for action or action plan,
- the alternatives to reducing workforce to limit the number of people concerned, and
- measures to lessen the reduction’s consequences on the employees.
During the negotiations, the employer must very carefully investigate particularly any opportunities for relocating or training employees for some other work offered by the employer. Any dereliction of this obligation is usually considered fairly serious.
When planning the schedule for the negotiations, you must be prepared to discuss all matters covered by the negotiation obligation, i.e. the grounds for, impact of, and alternatives to the reduction measures. If the negotiations concern more than one personnel group, it is advisable to hold separate discussions with the other shop stewards.
Ask the employer to keep minutes of the negotiations. Check the minutes carefully to ensure that they correspond with the course of the negotiations and do not record matters that the employer has unilaterally announced as matters that have been agreed upon. If you disagree on something, have it recorded in the minutes. If the minutes do not correspond with the course of the negotiations and the disagreement is not recorded, the minutes should not be signed.
Inform the people you represent of the course of the negotiations and try to come up with alternatives to the termination of employment relationships together.
In cooperation negotiations where the terminations of employment or changing full-time contracts to part-time ones considered by the employer concern less than ten people, the employer has fulfilled its duty to negotiate when the negotiations have been conducted in the aforementioned manner for a period of 14 days as of their commencement. If the cooperation negotiation where the terminations of employment or changing full-time contracts to part-time ones considered by the employer concern at least ten people, the employer is considered to have fulfilled its duty to negotiate when the negotiations have been conducted for a period of at least six weeks as of their commencement.
The negotiation period is always 14 days in companies with 20–29 employees. The same 14-day rule also applies to situations involving reorganization.
Some other agreement on the negotiation schedule may also be made, but usually a proposal of this kind made by the employer should not be agreed to.
Once the employer has fulfilled its duty to hold cooperation negotiations, it must, within a reasonable period of time, present the representatives of the personnel groups with a general account of the decisions to be considered on the basis of the cooperation negotiations. The account must indicate at least the following:
- the number of people whose employment will be terminated, who will be laid off or whose contract will be changed to a part-time contract per personnel group,
- the duration of layoffs, and
- the time during which the employer intends to carry out its decision on reducing the workforce.
The outcome of the cooperation negotiations held may remain valid for as long as the employer’s circumstances remain unchanged, so the period of time may even be quite long. What are referred to as “continuous cooperation negotiations” are possible if the company’s factual situation is such that its circumstances change continuously. In other cases, the cooperation negotiations must always be held situation-specifically. Cooperation negotiations may not be held “just to be sure”; rather, they do require at least the initial stages of some kind of a financial and production-related risk.