The objective of the Act on Co-operation within Undertakings is to promote the relations between the employer and employees as well as the employees’ opportunities to affect their work and matters at their workplace. The objective of the law is to create prerequisites for improving the working conditions and developing the operations of an enterprise. It involves the requirement for consulting the employees and informing them about matters that affect the position of the personnel. Before making a decision the employer shall negotiate with the employees or their representatives.
The enterprise shall annually prepare a personnel and training plan which shall include the development of the structure and amount of the enterprise's and the principles of use of various forms of employment relationship. The plan shall include an assessment of the changes taking place in occupational skills requirements of the employees and training objectives based on this assessment.
The realisation of the plan and objectives shall be followed in co-operation. The employer shall quarterly provide the representatives of the personnel groups a report on the number of employees in fixed term and part-time employment relationships in the undertaking. The employer shall annually present the representatives of the personnel groups with a report on the use of external labour, if subcontracted work is performed in the premises or object of the undertaking. If the use of external labour affects the personnel of the undertaking, the matter shall be handled in a co-operation procedure.
According to the law, the employer shall also inform the employees about the financial statements, the financial standing of the undertaking, and the salaries of different personnel groups. If that information is not given to the employees, the personnel representatives may require from a court of law a decision by which the employer is required to give the information under the threat of a fine.
The employer shall take initiative in the negotiations in accordance with the Act on Co-operation within Undertakings and give the information concerning the matter at hand in good time to enable the employees to prepare for the said negotiations.
The law shall apply to undertakings normally employing at least 20 persons as parties to an employment relationship. All provisions of the law shall not be applied to undertakings employing less than 30 persons. These include:
- principles and practices applied in recruitment (section 15)
- continued negotiation procedure of the use of temporary agency (section 17, subsections 3 and 4)
- co-operation procedure concerning internal communication in the undertaking (section 18)
- handling plans, principles and practices based on other legislation (section 19)
- working rules and rules for suggestion schemes, and allocation of accommodation (section 27, subsection 1, items 2–4)
The Act on Co-operation within Finnish and Community-scale Groups of Undertakings provides for Finnish groups of undertakings with at least 500 employees and groups of undertakings operating in the European Economic Area with at least 1,000 employees in at least two member states.
If the matters concern one employee, the negotiations shall be held between the employee and his/her supervisor. If the matter concerns more than one employees, the employees shall be represented by a representative of the personnel group. If the matter at hand concerns more than one personnel groups, the handling of the matter shall take place in a joint meeting in which the parties are the representatives of the employer and the representatives of the relevant personnel groups. The employer and the representatives of the personnel groups are entitled to agree on setting up a committee, in which case they shall agree on the composition and term of office of the committee and the matters to be handled by it.
The personnel of an undertaking comprises of workers, clerical employees and higher clerical employees. Those three groups generally form the personnel groups referred to in the Act on Co-operation within Undertakings. Employees, in whose terms of employment the collective agreement made by a member union is applied, shall form one personnel group. Clerical employees form a personnel group which includes employees within the scope of application of the collective agreement made on the terms of employment of clerical employees in the relevant industry, regardless of whether some clerical employees are members of another union than the one that has made the agreement or are unorganised. Employees that are not included in collective agreements due to their position or demands of their job are higher clerical employees.
Belonging to a personnel group or forming one is not bound to organisation in the Act on Co-operation within Undertakings. An unorganised employee belongs to the personnel group the terms of employment of which are applied to his/her work.
Such personnel representatives whose position is not based on the provisions of a collective agreement (e.g. elected representative, liaison) are:
Elected representative; can be elected if the employees do not have a shop steward referred to in a collective agreement binding by virtue of the Collective Agreements Act.
Occupational safety delegate; can only be the representative if the matter dealt with in the co-operation negotiations also concerns the safety and health of the employees and the matter has not been and will not be considered in accordance with the Act on Occupational Safety and Health Enforcement and Co-operation on Occupational Safety and Health at Workplaces.
Co-operation representative of unorganised employees; can be elected if a majority of any personnel group within the undertaking are not entitled to participate in the election of a shop steward, because they belong to another trade union or are unorganised. The co-operation representative of unorganised employees acts alongside the representative of organised employees in matters concerning the personnel group.
Co-operation representative; can be elected if employees have not elected a shop steward or elected representative even though they are entitled to do so.
If the personnel elects no representative, the employer may fulfil his co-operation obligation together with all the employees belonging to the said personnel group. Such a situation may be realised in small companies in particular. If the employees have no representative, they can elect a representative to an individual negotiations session. Such a representative shall not, however, be in the position of a co-operation representative (special protection against termination of employment).
The employer shall start the co-operation procedure, if it plans
- the closure of the undertaking or any part thereof, its transfer to another place or expansion or reduction of its operations, and it may affect the personnel
- acquisitions of machinery and equipment that affect the personnel
- changes in the production of services or product range that may cause changes in the position of the personnel
- other similar changes in the business operations, and they may affect the personnel
- re-arrangement of work (duties, content, organisation) that would affect the personnel
- use of external labour (hired labour or subcontracting) that would affect the personnel
Co-operation procedure when the measure may result in termination of employment
The employer shall issue a written proposal for negotiations in order to commence the co-operation negotiations and employment measures at the latest five days prior to commencement of the negotiations if the employer is considering to serve notice of termination, lay-off or reduce a contract of employment into a part-time contract of at least one employee. The proposal for negotiations shall include at least the commencement time and place of the negotiations and an outline of the suggested agenda to be handled in the negotiations.
Furthermore, if the employer is considering to serve notice of termination, lay-off for over 90 days or reduce a contract of employment into a part-time contract of at least ten employees he is to provide the representatives of the employees concerned with information, in writing, available to him:
- on the grounds for the intended measures
- initial estimate of the amount of terminations
- report of the principles used to determine which employees shall be served notice of termination
- time estimate for implementation of the said terminations
If the employer is considering to serve notice of termination, lay-off or reduce a contract of employment into a part-time contract of under ten employees or lay-off for a period of a maximum of 90 days of over ten employees, the co-operation negotiations shall be conducted for at least 14 days, unless otherwise agreed. If the measures concern at least ten employees, the co-operation negotiations shall be conducted for at least six weeks, unless otherwise agreed. However, the negotiation period is 14 days in an undertaking normally employing 20–29 employees in an employment relationship.