Change negotiation obligation in the company

When will change negotiations take place?

The Act on Co-operation within Undertakings, which provides for e.g. on change negotiations, applies when the regular number of personnel is at least 20. The scope of the obligation to negotiate changes includes the termination, layoff, part-time employment of one or more employees considered by the employer on economic or production grounds, and unilateral changes to an essential condition of the employment contract. Negotiations are started and conducted while the employer is considering plans that he estimates will have personnel effects within the scope of the obligation to negotiate changes.

Parties to change negotiations

If the matter concerns more than one employee, the employees are represented by a representative of the personnel group. If the matter in question concerns more than one personnel group, the matter will be dealt with in a joint meeting, where the parties are the employer’s representatives and representatives of personnel groups.

Negotiation proposal

The negotiation proposal is given no later than 5 days before the start of the negotiations. The negotiation proposal serves as a meeting invitation, on the basis of which the personnel also get an idea of what is to be negotiated. It should be clear from the negotiation proposal at least
• the start time and place of negotiations, and
• a focused proposal on the issues to be discussed in the negotiations.
In negotiations regarding the reduction of employees, the negotiation proposal must also state:
• planned measures and their basis;
• a preliminary estimate of the number of employees subject to measures, broken down by personnel group and by measure;
• explanation of the principles according to which the employees subject to the measure are determined;
• an estimate of the time during which the measures will be implemented.
The negotiation proposal must also be submitted to the Employment and Economic Affairs Office no later than when the change negotiations begin.

Content of change negotiations

In the change negotiations, at least the grounds, effects and alternatives of the measures aimed at the personnel must be discussed. If the negotiations concern the dismissal, layoff, part-time employment of one or more employees or the unilateral change of an essential condition of the employment contract, the negotiations must also deal with:
• alternatives to limit the circle of people targeted by the measure and to mitigate the negative consequences of the measure for employees;
• suggestions and alternative solutions made by a staff representative or employee. Negotiations are held for at least 14 days if it is about the dismissal, layoff or part-time employment of fewer than ten employees or layoffs of less than 90 days. In other cases, the minimum negotiation period is six weeks. The employer can only make decisions after the negotiations have ended.

Minutes of negotiations

Upon request, the employer must ensure that minutes are drawn up on the matters discussed in the change negotiations, which shows at least the time of the negotiations, the persons who participated in them, the results of the negotiations and any differing opinions.

Action plan and operating principles supporting employment

If the planned layoffs concern at least 10 employees, the employer must submit a proposal as an action plan for the planned implementation of change negotiations and for mitigating the consequences of possible layoffs. Operating principles supporting employment are drawn up when possible layoffs affect fewer than 10 employees. The operating principles describe how employees’ self-initiated applications for other jobs or training and participation in employment-promoting services are supported.

Reimbursement for the employee

If the provisions of the Act on Co-operation within Undertakings, are violated, a compensation penalty of 35,000 euros may follow per employee who has been subject to the measures.