03.05.2022 | Articles, SAVALnews
The new Act on Co-operation within Undertakings entered into force on 1.1.2022. The burden of the old law was that it had become generally perceived only as a law of dismissal. Employees were perceived to have less influence than was intended when the law was enacted. It remains to be seen how much the situation will improve now.
There are actually no major changes. The law continues to apply to companies and entities with at least 20 employees. Some of the provisions of the law only apply to companies with at least 30 employees.
The minor changes to the provision on employee representation are not intended to change the principles of employee representation. Although there is no longer any provision for an advisory board, the employer and employee representatives can still agree on an advisory board.
The reform of the Act on Co-operation within Undertakings brings the practice of continuous dialogue to the workplace. The aim is to improve the interaction between employer and employees and to increase employees' influence and access to information.
The provisions on the employee administrative representative apply to companies with at least 150 employees in Finland. This regulation was now transferred to the Co-operation Act. Under the new law, the employee representative in company administration is called the administrative representative.
The most visible change is a change in the structure of the law, making it easier to assimilate and use. The new Co-operation Act consists of three entities:
Chapter 4 concerning the transfer, merger and division of a business can be regarded as a fourth entity.
The new law introduces an obligation for workplaces to have an ongoing dialogue between employers and employees. The employer must maintain a regular dialogue with the employee representative in order to develop the activities of the company or organisation and the work community. The dialogue may address issues such as
As part of the dialogue, a plan for developing the work community is drawn up.
Workplaces can agree on how to put the dialogue into practice. Unless otherwise agreed between the employer and the employee representative:
The employer must provide the employee representative with all relevant and necessary information that is reasonably available and that the employer is entitled to provide. Unless otherwise agreed, the information must be provided at least one week before the dialogue takes place. The staff representative has the right to receive further information on request.
Chapter 3 of the new Act provides for change negotiations. This part largely corresponds to the negotiations under Chapter 8 of the old law. According to the new law, the obligation to negotiate changes includes the dismissal, lay-off, part-time work and unilateral modification of an essential term of an employment contract of one or more employees considered by the employer for economic or production reasons.
The unilateral modification of an essential term of an employment contract was not mentioned in the old law, but case law has previously held that a change in the terms and conditions of an employment relationship based on dismissal must be dealt with in a co-operation procedure in the same way as the termination of an employment relationship.
An employer who had unilaterally changed the essential terms and conditions of the employees' employment relationships in a manner requiring grounds for termination of the employment relationship without negotiating an amendment in the order provided for in Chapter 8 of the Act on Co-operation within Undertakings (Act on Co-operation within Undertakings) was obliged to pay compensation to the employees under the Act on Co-operation, even though their employment relationships had not ended as a result of the change.
Change negotiations must also take place when the employer, in situations involving changes to its business activities, is considering substantial changes in the work duties, working methods, organisation of work, work premises or regular working hours that fall within the scope of the employer's authority and affect the employee's position.
The change negotiations remained largely unchanged in terms of procedure. However, the right of staff to make suggestions and propose alternative solutions was strengthened. The employees' representative or the employee has the right to submit alternative solutions in writing for consideration in the change negotiations. If the employer does not consider the proposed solutions to be feasible, the employer shall, to the extent necessary during the negotiations, explain in writing the reasons behind its position.
If the negotiations concern the dismissal, lay-off, part-time work or unilateral modification of an essential term of the employment contract of one or more employees, the proposal for negotiations must be submitted at least five days before the start of the negotiations. Change negotiations last at least 14 days or six weeks.
Change negotiations are conducted between the employer and the employee representative who represents the employees who are the subject of the negotiations. If the employees do not have a representative, the change negotiations are conducted jointly with the employees who are the subject of the negotiations. If the measure considered by the employer concerns an individual worker or workers, negotiations can continue as before between the employer and the worker or workers concerned. In such cases, however, the worker or workers have the right to request that the matter be discussed in the presence of the employee representative or between the employer and the employee representative. It is advisable to invite the employee representative to attend the meeting.
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Jaana Liimatainen, YTY Labour Market Lawyer