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New means to improve interaction between employers and employees – Amendments to the Act on Co-operation within Undertakings out for comments now

Ministry of Economic Affairs and Employment 19.11.2020 10.02
Press release
Employer and employee discuss at a metal factory

The purpose of the reform of the Act on Co-operation within Undertakings is to improve the interaction between employers and personnel and to create a framework for developing the company and the work community. The reform would improve employees’ access to information and their opportunity to exercise influence. The report of the tripartite working group on the Government proposal will be circulated for comments between 19 November 2020 and 15 January 2021.

The new Act on Co-operation within Undertakings would consist of three entities:

  1. Continuous dialogue between employer and employees
  2. Negotiations in changing circumstances (change negotiations)
  3. Personnel representation in company administration

The Act on Co-operation within Undertakings would continue to apply to companies and organisations employing at least 20 persons. The provisions on employee representation in company administration would apply to companies with at least 150 employees in Finland.

Continuous dialogue to develop the company and work community

The working group proposes a new practice for developing the relationship between the employer and employees in the long term. The employer and the employee representative should have regular interaction at least quarterly, unless they have agreed otherwise. The practical ways of implementing the dialogue would be agreed at workplaces.

The continuous dialogue could address, among other things, the financial situation of the company or organisation, rules and practices of the workplace, structure of personnel, and needed skills and well-being of employees.

As part of the dialogue, the employer would create, in cooperation with the employee representative, a work community development plan, based on which the personnel’s skills and well-being would be developed and improved.

A larger role for employee representatives in change negotiations

Before the employer makes a decision on matters that have a significant effect on the employees, such as reductions in workforce, the employer must consult the employees or employee representatives. In the amended Act, this negotiation process would be called change negotiations.

The right of the employee representative to make proposals and propose alternative solutions would improve. In addition, the Act would specify the time when the negotiations must start.

The continuous dialogue and change negotiations would form an interrelated continuum. Possible developments could be discussed during the continuous dialogue even before the change negotiations, which would improve the flow of information and the premise of the negotiations. Similarly, the continuous dialogue would play an important role in the further processing of changes after the change negotiations had ended.

Specifications to employee representation in company administration

The representation of employees in the company administration promotes the flow of information and allows the personnel’s expertise to contribute to the decision-making in the company.

Provisions on employee representation would be transferred to the Act on Co-operation within Undertakings. Employees should be represented in the body of the company or organisation, which effectively deals with important business matters, finances and personnel issues. Employee representatives would have the right to receive training in order to perform their duties as an employee representative in the body.

Government aims to increase trust in the labour market

The purpose of the Act on Co-operation within Undertakings is to improve the company’s operations and the employees’ ability to influence decisions made in the company concerning their work, working conditions and position. The current act has been in force for more than ten years, and its functionality has been evaluated numerous times. Many in working life feel that the act no longer fulfils its objectives.

According to the Government Programme of Prime Minister Sanna Marin’s government, the legislation on cooperation will be amended in structure and in substance in order to improve the trust between employers and employees.

The task of the tripartite working group was to examine whether the current Act on Co-operation within Undertakings meets the present and expected needs of working life and to submit proposals for legislative amendments. The working group prepared a report drawn up in the form of a government proposal, which will be circulated for comments between 19 November 2020 and 15 January 2021. The report includes a dissenting opinion from the Confederation of Finnish Industries (EK) and the Federation of Finnish Enterprises, a supplementary statement from the Finnish Confederation of Professionals (STTK) and a supplementary statement from the Central Organisation of Finnish Trade Unions (SAK) and the Confederation of Unions for Professional and Managerial Staff in Finland (Akava).

Inquiries:

Nico Steiner, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 295 049 001 

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