Co-operation procedure when the use of personnel is reduced

Under the Act on Co-operation within Undertakings, the co-operation procedure must be initiated when the employer is considering measures that may lead to a reduction in the number of personnel (termination, lay-off or reduction of an employment contract to a part-time contract) for financial or production-related reasons.

  • The employer must issue a written proposal for co-operation negotiations in order to commence such negotiations
  • A written proposal for negotiations, in order to commence co-operation negotiations and employment measures, must be submitted at least five days prior to commencing the negotiations.
  • The proposal for negotiations must include the commencement time and place of the negotiations, and an outline of the suggested agenda to be considered during the negotiations.

Reductions in workforce are discussed between the employer and the representatives of the personnel group or groups or in a joint meeting. Serving notice of terminations, lay-offs or the reduction of an employment contract to a part-time contract of a single employee or specific employees, may be handled between the employee/employees and the employer. The employee has the right to request that the matter concerning him or her be also negotiated between the employee representative and the employer.

If the employer is considering serving notice of termination, lay-offs for over 90 days, or the reduction of an employment contract to a part-time contract for over ten employees, it must provide the employee representatives, in writing, with any information available to it as follows:

  1. on the grounds for the intended measures;
  2. initial estimate of the number of terminations, lay-offs and reductions of employment contracts to part-time contracts;
  3. a report on the principles applied to determine which employees must be served with a notice of termination, laid off or whose employment contract will be reduced to a part-time contract; and
  4. a time estimate on the implementation of such terminations, lay-offs or on the introduction of the part-time contracts in question.

Information provided to representatives of personnel groups must be attached to the proposal for negotiations. At the latest, the information obtained by the employer after the proposal has been made may be provided in the meeting commencing the co-operation negotiations.

If the employer is considering serving notice of terminations, lay-offs, or reducing employment contracts to part-time contracts for fewer than ten employees, or laying off over ten employees for a period of under 90 days, the employer may provide the aforesaid information to the employees concerned, or to their representatives. The employer must provide such information in writing, upon the request of the employee or the representative of the personnel group concerned.

Informing the Employment and Economic Development Office

When the employer proposes measures which may lead to terminations, lay-offs or the reduction of employment contracts to part-time contracts, to be considered in co-operation negotiations, the proposal for negotiations, or its material contents, must also be delivered, in writing, to the Employment and Economic Development Office no later than upon the commencement of the co-operation negotiations.

Plan and principles of action

After having made the proposal for negotiations concerning the intention to serve notice of termination to at least ten employees, due to financial or production-related reasons, upon the commencement of the co-operation negotiations the employer must provide the personnel group representatives with a report on a plan of action to promote employment. In preparing such a plan of action, together with the employment and economic development authorities the employer must, without delay, examine the available public employment services supporting employment.

This plan of action must include:

  • The intended timetable for the co-operation negotiations
  • The procedures to be followed in the negotiations
  • The planned principles of action to be applied during the notice period, when using the services referred to in the Act on the Public Employment Service and for assisting the affected employees in applying for other work or education

If the intended terminations affect under ten employees, upon the commencement of the co-operation negotiations the employer must present the principles of action according to which, during the period of notice, the employer will support the employees’ independent efforts to apply for other work or education and their alternative employment, using the services referred to in the Act on the Public Employment Service.


Chapter 7, section 12 of the Employment Contracts Act contains provisions on an employee’s right to employment leave during the notice period.

The co-operation negotiations must cover

  • The grounds and effects
  • Principles or plans of action for promoting alternative employment
  • Ways of limiting the number of people affected by the reductions
  • Alleviation of the consequences of the reductions on employees.

If the employer serves notice of termination due to financial or production-related reasons, the relevant changes to the plan regarding personnel and training objectives must be made during the co-operation negotiations.

Time of negotiations

If the employer is considering serving a notice of terminations, lay-offs or reduction of employment contracts to part-time contracts to under ten employees, or lay-offs for a period of a maximum of 90 days to at least ten employees, the employer will be considered to have fulfilled its duty to negotiate when 14 days have elapsed since the commencement of the negotiations, unless otherwise provided in the co-operation negotiations.

If the employer is considering serving notices of termination, lay-offs for a period of more than 90 days or reducing employment contracts to part-time contracts for at least ten employees, the employer will be considered to have fulfilled its duty to negotiate when six weeks have elapsed since the commencement of the negotiations, unless otherwise provided in the co-operation negotiations. However, the negotiation period is 14 days in an undertaking normally employing at least 20 but fewer than 30 employees in an employment relationship.

If the undertaking is under the restructuring procedure referred to in the Restructuring of Enterprises Act, the negotiation period must be 14 days from the commencement of the negotiations.

Employer’s report

After having fulfilled its duty to negotiate, the employer must, within a reasonable time, provide the representatives of personnel groups with a general report on the decisions considered on the basis of the co-operation negotiations. Depending on the matters considered, this report must provide information on the number of employees whose contracts will be terminated, the number of those who will be laid off, or the number of those whose employment contracts will be reduced to part-time contracts, within each personnel group, the duration of the lay-offs and an estimate of the time during which the employer intends to carry out the planned reductions.

Upon the request of a personnel group representative, the employer must present the report referred to above jointly to the employees of the personnel group concerned, insofar as the report relates to them.

Registering the outcome of the co-operation negotiations

Upon request, the employer must ensure that the dates of and participants in the negotiations, the outcome of the negotiations or the dissenting opinions of the parties are entered in the minutes prepared on the co-operation negotiations.

All representatives of the employer and the personnel groups present at the negotiations must inspect and confirm the minutes with their signature, unless otherwise agreed, with respect to the inspection and confirmation of the minutes, in the co-operation negotiations.

Further information: cooperation ombudsman