The number of employees is calculated according to the headcount. Indefinitely valid and fixed-term employment relationships as well as full-time and part-time employment relationships are all treated equally when calculating the number of employees. The number of working hours does not matter when assessing the compliance with the limit of application of the Act on Co-operation within Undertakings. The calculation of employees must therefore also include employees who carry out regular activities of the company only occasionally or for a short period of time.
In temporary agency work, the worker’s employer is the agency, not the company. Temporary agency workers are therefore not included in the number of employees of the company.
For example, if a company employs 40 workers, including 30 temporary workers, the Act on Co-operation within Undertakings does not apply to it.
Change negotiations must already take place at the stage when the employer is considering measures that may result in the dismissal, lay-off or shifting to part-time work of one or more employees or in a unilateral change to an essential condition of the employment contract on financial and produc-tion-related grounds.
The negotiations must not only be opened but must also be concluded before a real decision is taken on the subject to be negotiated.
An employee representative refers to either a shop steward elected on the basis of a collective agreement or an elected representative within the meaning of the Employment Contracts Act. In matters related to the safety and health of employees, ‘employee representative’ also refers to an industrial safety representative.
The employee representative may also be a cooperation representative. The Cooperation Ombudsman has issued separate guidelines on cooperation representatives and their election.
If a personnel group does not have a representative and they do not choose one from among their number, even in an individual case, the employer must conduct a dialogue or negotiations with all employees in the personnel group.
The Act on Co-operation within undertakings does not contain any provisions that would oblige or require the persons selected for the measures to be handled at the individual or name level in the change negotiations, and in the opinion of the Cooperation Ombudsman this is often not possible either. However, the negotiations must be held – and completed – before the employer makes the decisions on the matter.
The issues covered by the Act on Co-operation within undertakings do not include socio-economic reasons or the investigation or assessment of any age or other discrimination.
The employee has the right to resign from the service of the undertaking or to agree on terminating the employment relationship with the employer regardless of whether or not the undertaking is in the process of amending the contract. Agreement on terminating an employment relationship is not covered by the Act on Co-operation within undertakings.
In the opinion of the Cooperation Ombudsman, the fact that an agreement on terminating an employment relationship is made during the change negotiations has no effect on the matter. Hence, the Act on Co-operation within undertakings does not oblige the company to inform which employees have agreed to terminate their employment relationship.
On the other hand, considering the provisions of the Act on Co-operation within undertakings on the content of the obligation to negotiate, especially on the handling of grounds, impacts and alternatives, it may be necessary to report the number of those who have given notice and accepted a so-called departure package.
After change negotiations, the employer must inform the parties to the negotiations of the decisions the employer is considering.
As a general rule, a decision has not yet been taken at this stage, and it is therefore neither possible nor necessary to identify the employees to be affected by the measures.
Instead, the report should indicate the number of employees to be affected by the measures by activity or category of personnel, the duration of lay-offs and the time frame within which the employer intends to implement its decision. The purpose of communication is to alleviate uncertainty among personnel about the progress of the matter and to determine, as far as possible, the time frame within which decisions on the basis of the change negotiations will be taken at the latest.
As the decisions are being considered by the employer, the information provided may not be final, and predictions may differ from the measures to be taken.
Making decisions without prior change negotiations is an emergency provision that should be interpreted restrictively. The application of this provision is subject to particularly cogent and unforeseeable reasons damaging the company’s productive or service activity or to its finances.
Even in exceptional circumstances, this provision does not justify a total failure to comply with the obligation to negotiate; even in such cases, change negotiations must be initiated without delay when there are no longer grounds for derogation from the obligation to negotiate.
The COVID-19 pandemic started in 2019, so COVID-19 can hardly be a particularly cogent and unforeseeable reason that would justify derogation from the obligation to conduct change negotiations.
With regard to both dialogue and the recording of change negotiations, the law stipulates that the employer must, upon request, ensure that minutes are drawn up. In other words, the law does not require the keeping of minutes unless someone requests it during the negotiations.
Dialogue and the obligation to negotiate are obligations imposed on the employer, and the employer has the ultimate obligation to prove that the matters have been dealt with in the manner prescribed by law. It is therefore in the employer’s interest to draw up the minutes, even if no one asks for them.
If the planned terminations, lay-offs in force until further notice, part-time contracts or changes to the essential terms of employment contracts concern fewer than ten employees, the negotiation period shall be 14 days. The length of the negotiation period is not affected by the fact that fixed-term lay-offs are also planned in the same negotiations for a maximum of 90 days, even if they concern more than one employee and the planned measures would thus target a total of ten or more employees. In such a situation, the 14-day negotiation period is sufficient.