The new Act on Co-operation within Undertakings has entered into force on 1 January 2022

The new regulation aims to promote interaction between employers and staff as well as to maintain a better framework for the development of enterprises and working communities.

Following the legislative reform, in principle a continuous dialogue will be held between the employer and the staff representative on the undertaking or community situation and on issues relating to the working community on a quarterly basis. A similar provision is not included in the previous law. The themes of the dialogue and practical implementation will be agreed on the workplace level. The dialogue can, among other things, concern the financial situation of the company, the rules and practices of the workplace, the structure and competence of staff, and well-being at work.

As a part of the dialogue, a work community development plan must be drafted, the content of which is less restricted than the content of the personnel and training plan under the previous law. Employers should therefore prepare a new development plan and consider which previous plans could be included in it. Failure to conduct a dialogue could lead to a written improvement notice by the Cooperation Ombudsman and furthermore to criminal fine penalty insofar as the improvement notice is not followed.

In addition, the Co-operation Act includes only one chapter on negotiations in changing circumstances, which concerns negotiations on both workforce reductions and other changes based on the employer’s right to direct and supervise work. These negotiations are called change negotiations, and previous duties to negotiate in chapters 6 and 8 have been combined under the change negotiations. As a new duty, the change negotiations include the right of a staff representative to submit written proposals and alternative solutions to which the employer must provide answers in writing. Likewise, changes in the terms of employment have been brought more clearly under the change negotiations. In addition, the new act includes some refinements regarding the proposal for negotiations and the plan of action so companies should update their documents at least in these respects.