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Government proposal
New Co-operation Act to improve dialogue between employers and employees

Ministry of Economic Affairs and Employment
Publication date 30.9.2021 13.36
Press release
An employer and an employee discussing at a workplace

The Government proposes a new practice of continuous dialogue to develop the long-term relationship between the employer and employees at work. Another objective of the revised Act on Co-operation within Undertakings is to improve the employees’ ability to exert influence and to access information.

“The Co-operation Act is often considered just an act on terminating employment even though, as its name suggests, it relates to cooperation at work. That is why, it is time to carry out a reform that improves dialogue and trust between the employer and employees,” says Minister of Employment Tuula Haatainen.

The Government submitted its proposal on a new Act on Co-operation within Undertakings to Parliament on 30 September 2021. The Act is due to enter into force on 1 January 2022.

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. Employee representative in company administration (administrative representative)

The Act would apply to companies and organisations employing at least 20 persons. The provisions on administrative representatives would apply to companies that employ at least 150 people in Finland. The Act would not apply to central or local government agencies or public bodies.

Continuous dialogue helps develop the company and work community

As a result of the reform, the employer and employees (or their representatives) should engage in a regular dialogue. The dialogue could address, for example: 

  • financial situation of the company or organisation
  • workplace rules and practices
  • personnel structure and competence needs
  • wellbeing at work. 

The ways to carry out the dialogue in practice would be agreed at workplaces. As a rule, the dialogue should take place on a quarterly basis. In small companies with 20–29 employees, the dialogue should be held twice a year. If the company has not elected an employee representative, one dialogue per year would be sufficient.

A plan for developing the work community would be formulated as part of the dialogue.

Stronger 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 revised Act, this process would be called change negotiations. 

The procedures of change negotiations would remain largely the same as in the current Act. However, the employee representative would have more rights than before to make proposals and propose alternative solutions. In addition, the Act would specify the time when negotiations must start.

Employee representation in administration to be specified

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 new Act, the employee representative in the administration of a company will be called an administrative representative. 

The provisions on administrative representation would largely correspond with the current Act, but they would be transferred from the Act on Personnel Representation to the Act on Co-operation within Undertakings. Employees should be represented in the body of the company or organisation, which deals with important business matters, finances and personnel issues.

Nico Steiner, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 295 049001

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