Change negotiations

Last updated 23.7.2024

Change negotiations

The purpose of the Act on Co-operation within Undertakings (YTL) is to promote relations between employers and employees and employees’ opportunities to influence their work and workplace matters. As a rule, the Act applies to companies and corporations engaged in economic activities that regularly employ at least 20 employees. State and municipal agencies and institutions are subject to their own acts on co-operation within undertakings, i.e. the general Act on Co-operation within Undertakings does not apply to them.

Reduction of the workforce

When considering measures that may lead to the dismissal, temporary lay-off, part-time work or unilateral change of an essential term of an employment contract on financial or production-related grounds, the employer must submit a written negotiation proposal for the change negotiations (formerly co-operation negotiations) no later than five days before the start of the negotiations so that the parties to the negotiations have an opportunity to prepare for the negotiations.

Development plan

The employer must draw up a development plan in cooperation with the personnel representative, which is maintained for the systematic and long-term development of the work community. If an employer dismisses employees on financial or production-related grounds, the necessary changes must be made to the plan after the change negotiations have ended.

The development plan shall record the current state and foreseeable developments that may have an impact on the personnel’s competence needs or well-being at work; goals and measures to develop and maintain the competence of the personnel and to promote the well-being of the personnel at work; the allocation of responsibilities and the timetable for the measures; and monitoring procedures. The principles for the use of external labour must also be recorded in the work community development plan.

The employer shall provide the representative of the personnel groups with all relevant necessary information which can reasonably be given and which the employer is entitled to provide. 

Parties to the change negotiations

As a rule, representatives are the parties to change negotiations if the matter concerns a reduction in the workforce or a substantial change in the terms and conditions of employment. Both parties may elect their own representatives, but as a rule, the employees’ representatives are shop stewards or elected representatives. If the majority of the personnel group does not participate in the election of the shop steward, the employees belonging to the majority have the right to elect a co-operation representative from among themselves. If the employees do not have a representative, they will be held together with the targeted employees.

If the change negotiations concern only individual employees, the employer and employee may negotiate between themselves. However, the employee has the right to demand that negotiations take place in the presence of a shop steward or elected representative or between the employer and the personnel.